The outlook for the UK economy is positive, Sunday Times economics editor David Smith told this morning’s BCO conference in Geneva.
“We shouldn’t be excessively gloomy about things,” Smith told delegates. “There are plenty of green shoots of recovery.
“The first is what is happening to the global economy. Having declined in 2009, the world economy grew by something like 5% in 2010. It may not be quite as strong this year, but 4% global growth is still pretty good.
“And despite what you hear, Britain is recovering. The strong recovery in the stock market we have seen over the last couple of years is consistent with the global and UK recovery story.”
But he warned it would not all be plain sailing: “It would be a lot more comfortable if oil prices were somewhat lower and if other inflationary pressures were less intense. This is the unexpected squeeze on incomes. That makes life somewhat more difficult. And there are, of course, the unknown unknowns – earthquakes in Spain overnight and in Japan previously.”
But he played down other threats. “The eurozone debt crisis I regard as an aftershock of the main crisis. And central banks will have to raise interest rate at some point but it will happen softly and slowly. Central banks will continue to offer a stimulus.”
damian.wild@estatesgazette.com
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