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Join me this coming Thursday, 23 November, from 08:30-09:45 GMT, for a webinar discussion on the intellectual legacy of the great Scottish economist, Adam Smith, widely seen as the founding father of modern economics. 2023 is the 300th anniversary of Smith’s birth, and to mark the occasion I will be joined by the Rt Hon Liam Fox MP, Dr. Linda Yueh, the Oxford University economist and author of “The Great Economists” and Professor Charles Nolan, from Smith’s alma mater Glasgow University, to explore how Smith’s ideas can illuminate our thinking on economics and business today. To register for this webinar please visit:
Next Wednesday the UK chancellor of the exchequer, Jeremy Hunt, will present his Autumn Statement, which covers taxation, public expenditure and public debt. In some ways things have improved since Mr Hunt’s budget statement in March. Growth has outperformed the Office for Budget Responsibility’s (OBR) March GDP forecasts, government revenues have come in well ahead of expectations and public debt is on a lower than planned trajectory.
Last week’s Bletchley summit on artificial intelligence (AI) concluded with a prediction from Elon Musk that AI will eventually replace all forms of human labour. As Mr Musk put it, “You can have a job if you want a job… but AI will be able to do everything”.
Last month the Office for National Statistics (ONS), the UK’s official statistics authority, published sizeable upward revisions to its GDP numbers for the last few years. The new numbers show that the UK’s recovery from the pandemic was stronger than previously thought. The original numbers indicated that the UK economy had still not recovered to its pre-pandemic size; the new estimates show the UK exceeded that threshold in late 2021.
We have released the latest Deloitte survey of UK chief financial officers this morning. The full report is available at:
Borrowing is becoming more expensive for western governments. Last Friday the interest rate, or yield, on US 30-year government bonds reached 4.96%, the highest level in 16 years. German bond yields at close to 3.0% are back to levels last seen during the euro crisis in 2011. UK 10-year bond yields are higher now than they were at the height of the sell-off in the wake of the mini-budget a year ago.
Interest rates seem to be at or near their peak for this cycle in the US and Europe. With inflation falling and growth likely to remain weak for some time, the focus is shifting to when central banks will cut interest rates.
All the major economies of Europe and North America have slowed in the last year, but none as fast as Germany. It saw a mild recession at the end of last year and in the first quarter of this year. Output stagnated in the second quarter and seems likely to remain flat at best until spring of 2024.
Just over a year ago Europe was on the verge of a looming energy crisis. Natural gas prices had spiked at more than 15 times the levels seen before the invasion of Ukraine. The risk of power cuts and recession were all too real.
Please join me for our annual ‘Back to School’ webinar this Wednesday, 13 September, at 13:00 BST, as I examine prospects for the UK and global economies.