Economic Perspectives
By Ruth Lea, Economic Adviser to Arbuthnot Banking Group
The latest GDP should be taken with a pinch of salt: but buoyant growth is worryingly elusive
30 April 2012
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the latest GDP figures and whether the current recession really is "worse than the 1930s".
Britain will need austerity programmes for the foreseeable future; and turmoil returns to the Eurozone
16 April 2012
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the renewed turmoil in the Eurozone and the UK's public spending data in the light of the latest OECD report on fiscal consolidation.
The March 2012 Budget was helpful to business: but growth remains the key challenge
2 April 2012
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses aspects of March Budget.
The March 2012 Budget: the Chancellor will be cautious
19 March 2012
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the forthcoming Budget, due on 21 March.
The economic background to the Budget: slow growth domestically, worse in the Eurozone, better in the US
5 March 2012
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the economic background, both domestically and in our main export markets, to the Budget (21 March).
Moody's credit warning and rising unemployment mean radical growth policies are needed
20 February 2012
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the last week's economic developments and their implications for policy.
The Monetary Policy Committee will probably vote for more Quantitative Easing this week
6 February 2012
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the latest UK economic evidence and the case for more Quantitative Easing.
The Eurozone: better markets but a worsening economy
23 January 2012
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses some recent developments in the Eurozone, commenting on the lack of growth policies.
The New Year: time for a long-term look
9 January 2012
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, does some medium-term analysis, using the IMF’s forecasts to 2016, and long-term crystal ball gazing to 2050.
The EU's leaders need to plan for an orderly break-up of the euro
19 December 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the latest developments in the Eurozone after the recent Summit (8-9 December).
The Autumn Statement: the economic outlook darkens
5 December 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the Autumn Statement (29 November).
The Autumn Statement: weaker growth calls for radical growth policies
21 November 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the upcoming Autumn Statement (29 November), Britain’s deteriorating growth prospects and measures for stimulating growth.
Britain will struggle to avoid a "double dip" recession, as Eurozone growth prospects sour
7 November 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses Britain's growth prospects in the light of the deteriorating expectations in the Eurozone.
Britain’s high energy prices: the folly of wind-power
17 October 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses Britain’s energy policy and the implications for business.
More Quantitative Easing: a calculated gamble
10 October 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group,discusses the Bank of England’s decision to implement a further £75bn of quantitative easing (QE).
Another attempt to "save" the Eurozone, but history reminds us currency unions have collapsed before
26 September 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the “rescue plan” for the Eurozone, announced on 24 September, and discusses monetary unions that became disunited and fixed exchange rate systems that became unfixed.
Britain's sluggish economy needs a buoyant financial sector
12 September 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses recent economic developments and the need for policies that stimulate economic growth and encourage business, including the financial sector.
The City of London is still the top financial centre: for now
5 September 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the economic importance of and the challenges to the City of London.
The global economy in transition: a two‐tier world
15 August 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the longer-term trends in the global economy, as well as the short to medium-term prospects, of the slow-growing developed economies, on the one hand, and the fast growing developing economies (especially China), on the other.
Options for the Eurozone: fiscal union or reconfiguration
1 August 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the developments and long-term options for the Eurozone in the wake of the recent meeting of Eurozone leaders on 21 July.
The Eurozone debt crisis deepens
18 July 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the recent worsening of the European debt crisis.
America’s economic "soft patch" should worry us all
4 July 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the recent "soft patch" in the US economy and its implications.
A second Greek bailout: nearly there
20 June 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the pressures on the EU and IMF to avoid a disorderly Greek default, which could trigger a a Lehman-like shock to the global financial system.
GDP may only regain the pre‐recession 2008 peak in 2013, even with steady growth
6 June 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, analyses Britain’s four post-war recessions and their subsequent recoveries: the mid-1970s, the early 1980s, the early 1990s and the current cycle.
Diverging economies continue to pull the Eurozone apart
16 May 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the diverging Eurozone economies in the light of the recently released estimates for GDP for 2011Q1 and the European Commission’s Spring (May) forecasts.
Disappointing GDP growth: all the more need for radical growth policies
3 May 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, comments on the weakness of the recovery as evidenced by the disappointing GDP figure for 2011Q1.
The public finances are forcing the Chancellor to shrink the public sector: it needs to shrink
18 April 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the talk of the Chancellor’s public spending "cuts" in order to correct the appalling public sector deficits.
The MPC and the Budget: marking time
4 April 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, reviews the upcoming meeting of the Monetary Policy Committee and discusses aspects of the March Budget.
Budget preview: a Budget for Growth
22 March 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, provides a preview for the Budget, due on 23 March.
The economic background to the Budget: weaker growth, higher inflation
8 March 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, assesses the economic situation ahead of the next MPC interest rate announcement (10 March) and the Budget (23 March).
The Coalition Government's approach to reducing the regulatory burden
22 February 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the Coalition Government’s approach to reducing the rising regulatory burden on business.
Britain needs a radical pro‐growth strategy
8 February 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the early speculation about the Budget on 23 March.
The continuing Eurozone crisis: implications for Britain
25 January 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the exposure of UK banks to Eurozone countries.
Memo to the MPC: it is too soon to raise interest rates
11 January 2011
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses Britain’s inflation performance.
Commonwealth countries are the growth markets of the future
21 December 2010
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, looks at why now is an opportune moment to readdress and reevaluate the economic potential of the Commonwealth.
The OBR’s November forecast: so far, so good
7 December 2010
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the OBR’s latest forecasts, as released in their Economic and fiscal outlook (29 November 2010).
The Irish bailout and options for the Eurozone
23 November 2010
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, considers the imminent IMF‐EU bailout for Ireland
Keep Britain’s cuts in perspective: it’s far worse in some eurozone countries
8 November 2010
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, compares the UK’s forthcoming spending‐cutting exercise with other
fiscal reform programmes in recent history
2010 Spending Review: the Chancellor did stick to his plans
25 October 2010
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, assesses the 2010 Spending Review, released on 20 October. As expected the Chancellor changed his overall plans very little.
2010 Spending Review: the Chancellor is likely to stick to his plans
18 October 2010
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, offers a preview to the 2010 Spending Review, due on Wednesday 20 October.
Eurozone pain will continue: a lesson from Black Wednesday
4 October 2010
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, looks back at the lessons learned from Black Wednesday.
As the Treasury’s purse strings are tightened, London and the South East are well placed to handle the cuts
20 September 2010
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses how to handle the cuts.
The second quarter GDP figure was erratically good: slower growth ahead
6 September 2010
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the UK 2nd quarter GDP figure, concluding that the 1.2% quarterly increase was an erratically well-above trend increase. A return to more normal growth rates can only be expected.
The labour market: better than expected so far but hard challenges ahead
23 August 2010
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, analyses severity of the 2008‐09 recession
Weak bank lending: constrained by demand factors not just supply
09 August 2010
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, analyses recent developments in bank lending
EU bank stress tests not a whitewash - but too timid
26 July 2010
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, analyses the report on the EU’s bank stress tests, the overall objective of which was “to provide policy information for assessing the resilience of the EU banking system to possible adverse economic developments and to assess the ability of banks in the exercise to absorb possible shocks on credit and market risk, including sovereign risk.”
The OBR’s economic forecasts are “challenging”: but there’ll be no “double dip”
12 July 2010
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, analyses the Office for Budget Responsibility’s post-Budget economic forecasts and assesses the prospects of a “double dip”.
A tough, necessary Budget: a true “gamechanger”
28 June 2010
We recently speculated that June’s Emergency Budget would be a “game‐changer”.
It was. It was a tough, hard Budget but, as we have argued on previous occasions, necessary after the years of profligacy.
A “game-changing” Budget: the most important for a generation
22 June 2010
As in 1981 this week’s Budget will surely also prove to be a "game-changing" Budget. It will be the most important for a generation.
Tackling the deficit: an excellent start but there’s much to be done
7 June 2010
The Coalition Government’s first Budget will be announced on 22 June. It will be the most politically and economically significant Budget since the early 2000s, when Chancellor Gordon Brown turned on the spending taps and, in doing so, profoundly contributed to the dire state of the country’s public finances. The contents and tone of the Budget will shape much of what the new Government will be able to achieve for the rest of the Parliament. The Government has already made it quite clear that the need for deficit reduction, much discussed in previous Perspectives,1,2,3 will be their first priority.
The eurozone's rescue package: buying time and postponing the day of reckoning
24 May 2010
In the first week of May the eurozone came extremely close to breakdown, totally eclipsing the markets' interest in the British General Election. A reluctant German Chancellor, torn between a hostile domestic electorate and eurozone meltdown, finally agreed, firstly, to a €110bn bailout for Greece which effectively covers Greek credit needs for the next 3 years at rates of 5% or less and, secondly, a "shock and awe" stabilisation package amounting to €750bn for other weaker eurozone countries faced with funding problems. The €750bn consisted of a €440bn (up to) loan facility backed by the more creditworthy eurozone members operational for the next 3 years, €60bn of EU27 bonds and up to €250bn of support from the IMF.
A new government's priority will be to tackle its lamentable fiscal legacy
10 May 2010
At the time of writing Gordon Brown remains Prime Minister and discussions are in progress between the Conservatives and the LibDems with a view to forming a power‐sharing government. If these discussions break down the Labour party has offered talks with the LibDems. The most likely options for a new government are, however, a Conservative‐LibDem power‐sharing arrangement or a Conservative minority government. A Lab‐LibDem arrangement (possibly including other parties to reach an overall majority) looks less likely. These inter‐party negotiations are, of course, necessary because the hung parliament outcome of the 6 May General Election.
The markets are calm now: but a hung parliament would surely increase economic uncertainty
26 april 2010
With less than a fortnight to go before the General Election on 6 May, the polls point to a hung parliament, where no one party has an overall majority. It is of course by no means certain and we are not suggesting a hung parliament is a foregone conclusion. Polls have been spectacularly wrong before, for example in 1970 and 1992, and the polls suggest that party support is especially volatile. This Perspective does not assume a hung parliament, we make no predictions, but merely seeks to discuss some of the issues if there is one.
The statistical background to the forthcoming General Election
12 april 2010
In something of a departure from the usual economic subject matter of our Perspectives, this Perspective discusses the statistical background to the forthcoming General Election on 6 May 2010...
A "do little" Budget: pain yet to come
29 MARCH 2010
Last week's Budget, released on 24 March, was a "do little" Budget - more of a holding or "treading water" exercise before the General Election. The projections for the public finances for both borrowing and indebtedness were marginally better than in December's Pre-Budget Report. But the numbers remain shockingly bad...
The Budget: the beginning of the election campaign
15 MARCH 2010
Next week's Budget will almost certainly be the last major political exercise before the calling of the general election, which is expected to be on 6 April, a month before the expected election date of 6 May. Economically it will surely be a holding exercise, with no major announcements...
Adverse demographic trends in Europe: ageing
populations and relative economic decline
1 MARCH 2010
In the current debate about a possible German bail-out for Greece, one factor is increasingly clear. And that is the extreme electoral unpopularity in Germany of such a generous show of EU solidarity to ameliorate Greece's problems...
Uncertainty in the EU: no bailout for Greece (yet) and faltering economic growth
15 February 2010
There was, perhaps surprisingly, no confirmation of a specific Greek bailout at last week's summit meeting of the Council of the European Union. There was however an "Agreement to support Greece" which included the following...
Greece's possible bailout: a painful precedent
1 February 2010
In the last Perspective we discussed how the eurozone economies were diverging. Specifically we discussed the divergence between the peripheral "Club Med" countries - Greece, Spain, Portugal, and possibly Ireland and Italy - and the core economies centring on Germany, France and the Benelux countries...
The divergent eurozone: no easy solutions in sight
18 JANUARY 2010
The current debate on Greece’s fiscal difficulties, possible bailout or default or, even, possible withdrawal from the eurozone is but one aspect of the seemingly intractable economic problems facing certain members of the eurozone...
Do not rule out more Quantitative Easing
4 JANUARY 2010
The Bank of England’s Monetary Policy Committee will meet this week and the usual announcement will be made on Thursday, 7 January, on their decisions. It is almost universally expected that the Bank Rate will remain at 0.5% and there will be no announcement concerning any further Quantitative Easing...
The Pre-Budget Report: primarily a political exercise?
7 December 2009
This week’s Pre-Budget Report (PBR) could have more political than fiscal or economic significance. Whilst there is room in the electoral timetable for a March (or even April) 2010 Budget, such an event would be before a rapidly approaching a general election (assuming this occurs in May or June 2010 and not before)...
EU economy "on the road to a gradual recovery" - we hope
16 November 2009
Last week Eurostat, the Statistical Office of the European Communities, released the third quarter flash estimates for the EU27’s GDP. It showed a 0.2% increase in the quarter. For the euro area (EA16) in general, and for Germany in particular...
Risks to global recovery risk a British recovery
02 November 2009
There was much consternation when the third quarter GDP data for the UK were released recently. They showed a quarterly fall of 0.4%. This was well short of City expectations of a rise of 0.1%, or even 0.2%, and the 'end of recession'...
The public finances are shocking - but an ageing population means there is worse to come
19 October 2009
Several recent Perspectives have been devoted to the unfolding fiscal crisis. But an issue we have been barely touched on is the implications for the public finances of the ageing population over the next 40‐50 years...
The changing global landscape: G20 comes of age
05 October 2009
The relative shift in economic power from the developed economies to the emerging economies is indisputable. The rise of China and India and the relative decline of European countries have been commented on many times...
Spending cuts: a necessary and painful debate begins
21 September 2009
There is little doubt that one of the greatest economic problems facing the country, if not the greatest, is the state of the public finances. Last week the August figures for public sector borrowing were released and showed a shortfall of some £16bn, compared with borrowing of less than £10bn the year before...
Ruth Lea has been a Non Executive Director of Arbuthnot Banking Group since 2005, and is currently also a Director of Global Vision.
Ruth was previously Director of the Centre for Policy Studies between 2004 and 2007 and Head of the Policy Unit at the Institute of Directors between 1995 and 2003. She has also worked for ITN, Mitsubishi Bank, Lehman Brothers and was 16 years in the Civil Service, including the Treasury and the Department of Trade and Industry.
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