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Category Archives: Economy
Last week I attended a briefing on the new regulation for the financial services which included a review of the Lehman Brothers story. The review of the Lehman Brothers story was extraordinary. What I found particularly mind blowing, is that there are still 250 people employed full time by PricewaterhouseCoopers (PWC) sorting out Lehmann Brothers obligations from their collapse back in September 2008. Imagine the cost. Another interesting point that came out of the review was that due to the complexity of the financial world being so great, those involved in it, almost feel that no-one will ever be able … Read More »
When an eminent economist suggested in 2007 that there was a ‘vanishingly small probability’ of any countries leaving the Euro in the next ten years, he obviously wasn’t expecting first Greece, then Ireland, and this morning Portugal, to request multi-billion pound bail-outs to prop-up their ailing economies. With the foundations of the single currency looking increasingly shaky, it seems unlikely the Euro will survive long in its current form.
From our perspective this was a decent Budget for business. We’d set out our ‘wish list’ – see the blog post I wrote yesterday called ‘What budget should Osborne deliver on Wednesday’ – and George Osborne did a lot to meet our expectations on Corporation Tax. We very much welcome his proposal to accelerate the reduction in Corporation Tax to 26 per cent. There is more work to be done on, but this measure begins to kill the growing perception that the UK is a high tax country.
The Government’s coffers are pretty bare certainly, and this seems to be encouraging many people to assume there’s not much he can do in the Budget to kick-start economic activity and strengthen the recovery. With little money he can’t spend much. With little money, his scope for immediate tax cuts is limited. However, the Chancellor still has some good options.
The student protests which have been taking place across the country in the last few weeks are only the beginning of what may well be a long, cold winter of discontent. George Osborne will need to show a lot of backbone if he is to stick to the course set out in the Spending Review. But no amount of opposition from the public sector unions, or pressure from within Parliament, should make him back down on the vital project of deficit reduction, as IoD Chief Economist, Graeme Leach, explains in a new report.
Today the Institute of Directors (IoD) publishes its economic forecast for 2011 in the November edition of IoD Pulse. The key points are as follows: The IoD forecasts GDP growth of just 1.2 per cent in 2011 – the forces for economic deceleration reining back those for acceleration. The recovery cycle appears to be taking the shape of a square root sign, with a temporary spurt in growth in 2010 set to level off in 2011. There is too much doom and gloom surrounding the Spending Review but there also needs to be greater realism about weakness elsewhere in the … Read More »