A colleagure of mine spent yesterday evening listening to a presentation by Adam Posen, who is a member of the Bank of England Monetary Policy Committee.
His presentation was a look at the trends apparent in the UK economy over the past few decades and present, as well as comparing the similarity and differences between our most recent recession and previous ones.
The key points he made were:
- No sustained inflation moving forward, he expects to see a rapid drop in inflation in 2012.
- Continued increase in exported goods.
- Productivity growth hasn't returned to it's normal growth trend, as happened after previous recessions, but expectation is that it will return to its normal pattern of behaviour in the long-term.
- The ability of SME's to secure financing is seen as a greater issue to productivity within the economy than unemployment.
- No one sector is much worse, or better, than any other.
- The slowest moving sectors to recover are; Finance & Insurance, Professional & Technology and Transport & Storage. In these sectors his expectation are for a greater loss of headcount in the short term.
Over the coming 2 years he is expecting inflation to come down, unemployment to rise further and did not rule out further QE being used by the MPC.
