Extract
Economic Review - After The Storm.
Foreward
In this Review, Roger Bootle, Economic Adviser to Deloitte, turns his attention away from the gloom of our immediate economic prospects to consider what the postrecovery economy might look like. Once this recession is finally a memory, if not a distant one, the landscape will have changed dramatically. Roger believes that, in sharp contrast to the performance of the last ten years, neither the consumer nor government sector will play much of a role in driving economic growth over the next decade. In contrast, the star of the show will be the exporting sector, boosted by the drop in the pound. He dismisses fears that the manufacturing sector has shrunk too far, instead arguing that the UK's manufacturing base can undergo a mini revival – helping to fill the hole left by the financial services sector's shrinking share of the economy. UK exporters can clearly play to their traditional strengths such as aerospace and pharmaceuticals. The lower exchange rate will also boost services exports, from tourism to consultancy services. Roger thinks that the implications of these sectoral changes will be wide-ranging. The renewed emphasis on manufacturing could raise trend productivity in the economy, as well as boosting the Northern regions of the UK. But there is no reason why London's share of the economy must shrink. Its reliance on financial services is smaller than is commonly thought and London will benefit from becoming a cheap pla...See the full content of this document
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