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The UK economy in a global context Philip Shaw Chief Economist, Investec WMEF ‘Entrepreneurship, Innovation & Growth’ Conference 21 June 2013. Global economic trends…. Global growth: Actual & projections……. Forecasts. Annual GDP Growth. Source: IMF World Economic Outlook April 2013.
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The UK economy in a global contextPhilip ShawChief Economist, InvestecWMEF ‘Entrepreneurship, Innovation & Growth’ Conference21 June 2013
Global growth: Actual & projections…… Forecasts Annual GDP Growth Source: IMF World Economic Outlook April 2013
Shares of global growth have shifted Contributions to global growth (percentage points) Source: IMF World Economic Outlook April 2013
Key economies - GDP growth recent and forecast… Annual GDP growth Source: IMF World Economic Outlook April 2013
A few points on global growth This is a super cycle – it is not the world ‘New Normal’
Sterling depreciation Trade weighted sterling -24% Source: Bank of England
Euro crisis hits EU17 growth outturns… Annual GDP growth Source: Datastream, Investec forecasts
UK trade export volumes weakened by Euro area crisis.. Export volumes (% change 3m yoy), trade balance (£bn) Source: ONS
Global GDP growth – weighted by UK trade shares Annual GDP growth Forecasts Source: IMF World Economic Outlook April 2013, Bank of England, Investec calculations
UK export growth to selected countries Change between 2009 and 2012 (£ values) Source: ONS
Quarterly UK growth- contributions by sector Unwinding of Jubilee effect and Olympic boost Royal Wedding Diamond Jubilee Collapse of Lehman Brothers Source:
Various factors to watch for…. • New Euro area upturn?? • Is the eurozone financially more robust? • Are individual countries less systemic? (Probably!) • Attitudes to and UK relationship with the rest of ‘Europe’. • Referendum on the EU in the next parliament?? • New Bank of England Governor on 1 July. • More stimulus? QE? Interest rate guidance? • An upturn in the housing market? • Bank of England Funding for Lending Scheme helped mortgage market. • Chancellor’s Help to Buy scheme to raise demand? • Government help to SME sector?
EU referendum opinion polls Voting to stay in the EU (net balances) Source: YouGov
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