‘It’s not all bad news’ says economist Sentance
ECONOMIST Andrew Sentance says there are a number of reasons for businesses to be positive looking into 2012 as he chided Bank of England supremo Sir Mervyn King for being too down-beat.
Dr Sentance, a former member of the Bank of England’s Monetary Policy, and now senior economic adviser at PwC, told pro.manchester’s Christmas lunch that the BoE governor Sir Mervyn King had been “”almost egging it up” when he described the economic outlook as being as bad as the 1930s.
Stressing later that he does not have an axe to grind with Sir Mervyn – despite disagreeing with some of his policies on interest rates and quantitative easing – he said: “We need to find a balance between the reality of the situation – and yes it’s difficult – and the fact that we have come through some quite challenging times in 2008 and 2009.
“Policy makers need to show that they too have confidence that we can withstand these issues. There needs too to be an understanding of the impact such comments have on consumers and businesses.”
He said he expects an answer to the Eurozone crisis to be found, and that the UK economy will avoid a double-dip recession.
The economy and the business community is more balanced and resilient than previously, he said, as he urged all sectors to look for growth in powerhouse economies such as China and India.
He endorsed the deficit reduction plan adopted by Chancellor George Osborne- and said Britain should not borrow more from the bond markets – a policy advanced by Shadow Chancellor Ed Balls – to stimulate growth, lest sentiment change and a situation similar to that facing Greece and Spain arises.
“I think the focus has to be on supply-side policies which won’t cost a lot of money, but will make Britain a better place to do business,” he said.
Dr Sentance while there was a focus on growing manufacturing exports – the service sector has much to offer in too, particularly financial and professional advisers, universities and creative media.
He said he had noticed a much more positive vibe and ‘feel’ around Greater Manchester and the North West.
“There are many positive things going on in the local economy such as MediaCityUK and Manchester’s bid to be the home for the Green Investment Bank, ” he added.
