Friday, 11 July 2008
Elite Ayrshire Business Circle gets the brutal truth about the economy
By: Murdoch MacDonald
THE Elite Ayrshire Business Circle held its latest breakfast meeting at 8am on Thursday 10 July 2008 at the Clydesdale Bank Financial Solutions Centre in Alloway Street, Ayr.
Eminent financial commentator Nick Parsons (pictured above) delivered a brilliant, comprehensive and brutally frank presentation about the present and future state of the UK economy in a global context, in which he told it as it is and pulled no punches.
Nick Parsons joined nabCapital (like Clydesdale Bank, part of the National Australia Bank Group) in 2007 as Head of Markets Strategy, based in London.
He has 24 years experience in Foreign Exchange and Money Markets, having previously held posts as Global Head FX Research, Head of Macro Research and Group Economist.
He is a regular contributor to CNBC, BBC, Sky, and Bloomberg News, and is frequently quoted by major newspapers and news agencies.
[Pictured at the Elite Ayrshire Business Circle’s latest breakfast meeting, left to right: South Ayrshire Council Provost Winifred Sloan and deputy leader Margaret Toner; Lorna Alexander of the Ayrshire Association of Business Women; and Gloria Lambert of MacKay Corporate Insurance Brokers.]
Starting his presentation to the Elite Ayrshire Business Circle, Nick Parsons warned that he was no ray of sunshine, and kicked off by stating quite unequivocally that we are entering a new era, and that economically speaking, the good times are definitely over.
Addressing the question as to whether the UK is facing a recession, Nick pointed out that the answer depends upon how you define recession.
However, using the generally accepted definition of two consecutive quarters of negative growth, then the answer is probably no, but the question is largely academic, as it is going to feel like a recession.
Money is scarce - it is harder to get finance, and if you can get it, the cost of it has gone up. Although the official UK interest rates have fallen, the actual rates that people and businesses have to pay have risen, due to the difficulties being experienced in the money markets at the present time.
House prices are falling, and will continue to fall. Retail sales - which follow house prices - will collapse, and inflation and unemployment will increase. Inflation will probably peak towards the end of the year at around 4.2%, and then fall sharply back to, or below the 2% target during next year.
But Nick Parsons welcomes what is happening. Because recovery - when it does come - will herald a new situation in which we as a nation are no longer spending beyond our means in a debt bubble fuelled and dependent upon unrealistic house price rises.
Neil Wilson, partner at Clydesdale Bank Treasury Solutions in Glasgow added: “As Nick Parsons conveyed, we are indeed heading towards difficult times.
“The important aspect here is that we at the Clydesdale Bank are honest with our clients and contacts about the depth of the problems and deliver these messages, good or bad, to allow them to make informed decisions about their own businesses and their position in the marketplace.”
[Pictured left to right: Clydesdale Bank Financial Solutions Centre managing partner Willie Mackie; Elite Ayrshire Business Circle guest speaker Nick Parsons; and Clydesdale Bank Treasury Solutions partner Neil Wilson.]
Clydesdale Bank Financial Solutions Centre managing partner Willie Mackie commented: “I was delighted to welcome Nick Parsons on his first visit to Ayrshire. Nick is a regular contributor to Sky TV, CNBC, BBC and Bloomberg and to hear his thoughts and views so clearly articulated in person was an illuminating experience.
“The response from the audience was so positive that we will be inviting Nick back to Ayrshire to provide a further update towards the end of the year.”
South Ayrshire Council Provost Winifred Sloan added: “It was a privilege to listen to Nick Parsons’ presentation on the present and future state of the national and world economies.
“He certainly laid it on the line straight and to the point, and all in attendance were left in no doubt that the next 18 months are going to be hard going.
“He managed to put across the realities of the credit crunch with humour, honesty and in a straightforward manner which to those of us not in the financial world made perfect sense. There are many who could learn from him!”
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