The Monday Briefing
A succinct and eclectic weekly take on economics and finance from Ian Stewart, Deloitte's Chief Economist in the UK
What happened over the summer
A personal view from Ian Stewart, Deloitte's Chief Economist in the UK. To subscribe google 'Deloitte Monday Briefing'.
Please join me for our “Back to School” webinar this Tuesday, 10 September, at 13:00 BST, as I examine prospects for the UK and global economies. Register for this 60-minute webinar at: https://deloitte.zoom.us/webinar/register/WN_gzoaw2roR2WEatxglgOSuQ
With the holidays drawing to a close we have been taking stock of economic developments this summer.
Fed signals rate cut
For an update on UK and global economic prospects, join me for our annual Back to School webinar on Tuesday, 10 September, at 13:00 BST.
The new, sober British consumer
One of the long-running criticisms of the UK economy is that it is too dependent on consumer spending. Britons, so the argument goes, are too eager to borrow and spend and don’t save enough. For most of the last half century or so, consumer spending has indeed outpaced wider growth in the economy. No longer.
A quick, low-cost productivity booster
The UK economic outlook has brightened in recent months. Growth has come back more quickly than expected, inflation is running at a third the levels of a year ago and last month the Bank of England cut interest rates for the first time in more than four years. Agreed, the UK has plenty of problems, above all a low rate of productivity growth. Even on this troubled front we’ve had positive news.
Market gyrations stoke recession worries
After a good first half of the year equity markets hit the buffers last Monday. Global markets fell, volatility surged, and investors stampeded into safe assets, including US treasuries. At one point, global equities were down 8% from their July peak. The sell-off was most acute in Japan, where the main index suffered the sharpest one-day decline for 37 years last Monday. Investors also focused on the US, with the S&P 500 having its worst day since 2022.
In pursuit of happiness
GDP is the universal yardstick of economic activity and standards of living. Invaluable though GDP is, it is not a measure of the quality of life or human welfare. In recent decades economists and statisticians have sought to fill this gap, developing measures of happiness, life satisfaction and quality of life. With the summer holiday season underway, this week’s Monday Briefing examines what these surveys can tell us about where to live and the determinants of happiness.
UK corporates in buoyant mood
The latest Deloitte survey of UK Chief Financial Officers shows a sharp rise in corporate confidence following the UK general election. For the full survey visit:
In search of cheap, clean energy
Of all the barriers to the energy transition the greatest is cost. High costs help explain why, despite a broad international consensus on the need to arrest carbon emissions, oil, coal and gas still account for about 80% of global energy consumption. Fossil fuels have dominated because they were cheap.
Our summer reading list
This year’s reading list is actually a reading and listening list. The six articles and two podcasts aim to provide an engaging distraction however you spend your summer break. The articles and podcasts are available free online, although some websites restrict the number of articles that can be accessed without charge each month.
UK - new government, new policies, old problems
Britain’s new government has big ambitions for the UK economy. It wants to make the UK the fastest-growing economy in the group of seven industrialised economies by the end of the parliament. This would involve raising UK growth from an average of 1.3% a year to more than 2.0%, the rate that is seen as the norm for the US. Faster growth would help unlock the UK’s core problems of stagnating real incomes and deteriorating public services. Labour also wants to ensure greater economic stability, what Rachel Reeves, the new chancellor, calls “securonomics”.
Equities power ahead
The rally in global equities that started in late 2022 has gathered pace this year. A brighter economic outlook and the expectation of rate cuts to come have boosted equities around the world.