What experts say without the media present

This week I attended a presentation to a group of investment professionals in London about the world economic outlook by a leading strategy house with a U.S. Economist. This was a private event.

They examined at some length the possibility of a world recession before concluding there would not be one soon. Amidst all the possible threats that could cause one there was no mention of Brexit, nor did any of  the expert guests ask about it though there were lots of questions. It seems the wilder thoughts of the Bank of England do not even warrant discussion as people do not think it plausible.

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23 Comments

  1. Lifelogic
    Posted June 4, 2016 at 8:47 am | Permalink

    Indeed. The problem is there is a vast number of vested interests & state funded propaganda, lies, group think and BBC/Media bias around. All trying to keep the disaster that is the EU project on the road. You pay your taxes and the governments use them to tell you what to think. Do any taxpayers want taxes used in this way?

    Similar propaganda & group think keeps the ever more bloated state, ever higher tax rates, magic money tree economics and climate alarmism religions on the road. This despite the abundant real science, the actual measurements, the logic and the reality.

  2. brian
    Posted June 4, 2016 at 8:49 am | Permalink

    Investment professionals will be reluctant to talk about recession. They hope that their customers will believe that economies will grow, encouraging purchases in the investment vehicles resulting in commissions or fees.

    Reply They spent the whole meeting talking about recession, but never once thought Brexit might cause it!

  3. Bert Young
    Posted June 4, 2016 at 9:18 am | Permalink

    Whatever happens to our economy can only be the result of what happens in the rest of the world rather than how we might restrict ourselves . Our products and services are the outcome of our own developments and achievements ; as things stand they are demanded and unlikely to be pushed aside by “Brexit”.

  4. stred
    Posted June 4, 2016 at 9:35 am | Permalink

    When these economic experts meet, do they always take into account the very different growth figures for GDP growth and GDP/head? The Bankers, Treasury and BoE seem to be warning of lower growth but is this because if we got population growth under control, then the usual GDP would fall. I read that Osborne himself once said that GDP/head was more important, but now he seems to be going along with the bankers and prefers to see his higher figure outstripping EU countries which are losing population.

    On QT, Neil Hamilton finally pushed the argument that population growth, planning stopping building on the countryside and QE have made housing unaffordable. Of course boshie boy next to him accused him of blaming immigrants for everything. Over the last years we have managed to build c 140k dwellings but official net migration is twice this and NI records twice again. Where do they think the 630k workers and dependents are going to live while they are here for 11.99 months and then all go home?

    Possibly a few of generation rent may finally be realising why they can’t afford to do what their parents did.

    • Denis Cooper
      Posted June 5, 2016 at 10:08 am | Permalink

      As I see it successive governments in the past have over-promised, often for electoral reasons they made promises to the population which future governments will find it difficult to keep unless total UK GDP, and therefore UK government tax revenues, are increased by mass immigration. That might work if the migrants were only here temporarily, and they worked hard and paid taxes while they were still young and fit and childless, and then left the country before they or their children became a significant burden on the state. However of course that is not the case for many of the migrants, they come and they stay beyond their most productive years and then expect pensions and increasingly need the NHS and social care, and meanwhile they have children who contribute nothing but need education and healthcare, and so then it becomes necessary to draft in more young fit childless workers to provide increased tax revenues. In effect the government is just running a kind of demographic Ponzi scheme to try to get itself out a financial hole created by earlier over-promising.

  5. Vanessa
    Posted June 4, 2016 at 10:01 am | Permalink

    This is slightly stretching the topic – but Cameron said in an interview on Sky that the trading market of 500 million in the EU was the largest market in the world. I would think that with a population of some 7.5 billion in the rest of the world he has got his sums severely wrong.
    Surely, India, USA, China, Russia, Canada, etc. are larger markets than this puny EU? I am wondering whether he learnt anything at that super school of his or is he lying – again?

    • alan jutson
      Posted June 4, 2016 at 1:42 pm | Permalink

      Vanessa

      Eu Market is 500 Million people.

      It will be 60 million less when we leave. !

      So the EU will have less bargaining power with the rest of the World after we have left.

      Perhaps Turkey will take our place that will keep the numbers up, although their population are not as wealthy as ours so will not purchase as much goods.

      • bluedog
        Posted June 4, 2016 at 9:43 pm | Permalink

        The real problem faced by the EU is the Eurozone and the startling exposure of the German banks to Club Med sovereign debt and derivatives. Our blog host has recently posted on the EU’s coercive plans for tax harmonisation. This measure is clearly designed to incorporate the UK tax-base into the Euro-zone and thus reinforce the implied guarantee of aggregate EU taxable income as backing for the Eurozone. If Brexit happens, and for the sake of the UK economy it must, the EU tax-base contracts threatening the stability of the Euro from the perspective of taxable income. The German economy is arguably an accident waiting to happen.

        This is why the claims by Remain about the possible collapse of Sterling and a subsequent rise in interest rates are simply incomprehensible to this writer. Despite the public statements by executives of the leading investment banks supporting the Remain line, their trading positions may well reflect a very different and contrary assessment. This practice is not unknown and was last seen in 2007-08. After all, if you are building a comprehensive short position in the Euro, the Remainians are providing a valuable service in making statements that serve to weaken Sterling, which the banks may want to buy.

        In terms of currency trading, team Remain are very useful idiots.

      • A different Simon
        Posted June 5, 2016 at 3:36 pm | Permalink

        Alan ,

        At least 60 million less , possibly as many as 72 million less .

    • Denis Cooper
      Posted June 5, 2016 at 10:16 am | Permalink

      An interesting claim here from Hague’s successor in Richmond:

      http://www.telegraph.co.uk/news/2016/06/01/one-glance-at-the-eus-dismal-trade-policy-simply-destroys-the-ec/

      “Simply put, Britain is currently shelling out a £10 billion a year membership fee that gives our businesses tariff free access to a customer base only half the size of that enjoyed by Australian firms, where taxpayers don’t have to pay a penny for the privilege.”

  6. bluedog
    Posted June 4, 2016 at 10:13 am | Permalink

    Once again, Dr JR, no surprise. Life goes on and the markets will adjust, very quickly given that the UK has an open economy and a floating currency. Brexit is scarcely what they call a Black Swan event. That’s more appropriate as a description of the systemic risk inherent in the debt taken on by the German banks in their efforts to keep the PIGS solvent and to finance demand for German exports. No wonder the ECB is resorting to ever greater exercises in QE.

  7. a-tracy
    Posted June 4, 2016 at 10:34 am | Permalink

    John, can you answer the question posed to Michael Gove about all these expert economists predicting disaster on exit?

    Who pays them? What have they predicted correctly? What have they got wrong in the past? How many of them predicted the Bust of 2008 and warned Gordon Brown about it and the sub-prime markets, these experts must have been aware of the over-borrowing to insecure people? How many of them predicted Iceland and warned our heavily invested local Councils, who it appears were unaware and lost loads of our money and their pension investments that rate payers without secure pensions had to top up!

    Did they warn us about Greece, Spain, Portugal and Ireland and what action was taken about it. Italy seems to be facing problems but I’m no expert economist what are they saying about it and how it could affect the UK if we stay in?

    Reply I think you will find they all derive from the same forecast – I don’t recall the IMF and World Bank building a new model and having their own forecast of Brexit’s impact. Yes they did get the ERM and the banking crash comprehensively wrong in the past.

    • Chris
      Posted June 4, 2016 at 2:10 pm | Permalink

      Also it should be remembered that the 600+ top economists quoted recently who were against Brexit came from a poll where the response rate was only 17%. Definitely NOT a majority endorsement of Remaining in the EU. All the poll indicated was out of the 17% of “top economists” who replied, 600 thought Brexit would be harmful. Not a ringing endorsement, but the Leave campaign let them get away with this dubious use of stats. (It would be interesting to know what the actual number of economists who replied was, to put that in context).

    • Vanessa
      Posted June 4, 2016 at 3:08 pm | Permalink

      Follow the money – as the saying goes. I should think most, if not all, these “experts” and corporations receive a humungous amount of money from the EU (as does the BBC). It really is not rocket science to see which side these people are one. They rely on this corrupt organisation to feed them.

  8. Dennis
    Posted June 4, 2016 at 11:54 am | Permalink

    Did you have time to brief Mr Gove before his appearance on Sky News Channel?

    Also no one in the Leave campaign seems to know of this to scotch ‘the fact’ that UK beef is currently banned to the USA.:- (note the date)

    Lifting of US export ban on beef boosts Welsh farmers, says union – BBC
    http://www.bbc.co.uk/news/uk-wales-24813550
    4 Nov 2013 – The lifting of a 15-year export ban on beef to the United States is “fantastic news”, said a farming union in Wales. The US authorities banned European beef imports in the 1990s when concerns were raised over BSE infecting the human food chain.

    • matthu
      Posted June 4, 2016 at 6:49 pm | Permalink

      So … how much beef are the UK exporting to the US?

      And if the answer is very minimal, where do we lay the blame?

      • A different Simon
        Posted June 5, 2016 at 3:42 pm | Permalink

        Immigration .

        The UK cannot provide all of any of the basic foodstuffs to it’s current population of 66-72 million .

        Every person added is another person whose food has to be more or less entirely imported from overseas .

        At the same time there is nothing which can be done here which can’t be done cheaper elsewhere .

        We don’t have a comparative advantage in anything .

  9. CHRISTOPHER HOUSTON
    Posted June 4, 2016 at 11:58 am | Permalink

    I can well believe what you say JR.
    In truth, it hurts quite a bit even looking at the words: Bank of England. The visual of England being in the name. More painful when one listens and views Business programmes in that part of America from where the present Governor of the BoE hails. Painful by the absence of his title, name, and title of the Bank.

    The ECB and Mario Draghi are certainly mentioned frequently as one might expect. Also Deutsche Bank and various British financial institutions with perhaps a video interview sometimes of those individuals the City which quite frankly we never see on our British TV. But “our” Bank of England, no. Even seen interviews with Farage. But not in front of the Bank of England
    Nothing for anyone in the world, it seems, to crow about with the “Experts” of the BoE. Sad.

  10. PaulRivers
    Posted June 4, 2016 at 12:03 pm | Permalink

    Concerning the future success of the city outside the EU, the first thing the UK could do is withdraw from the EU bonus regulations which the Governor of the Bank of England has acknowledged are counter productive as it reduces Bank’s cost flexibility. This would clearly be a very attractive reason for institutions retaining London as their key centre. On issues such as the clearing centre for transactions Bank’s such as Citi are already relocating back offices to cheaper locations ( Poland in the case of Citi ) and so the future of London is likely to be more driven by its leading position in financial technology. In Fin Tech using blockchain technology may make central clearing redundant further reducing the threat of business being moved.

  11. CHRISTOPHER HOUSTON
    Posted June 4, 2016 at 1:01 pm | Permalink

    I am not au fait why a British equivalent of Canada’s Business News Network ( BNN ) and the American Consumer News and Business Channel ( CNBC ) does not exist in what The Rt Hon Mr Osborne calls “The Business Capital of the World ” ( he means London, UK )

    Judging by the analyses of the “experts” in the Bank of England and their “independent “contributors, I would say it is because no sensible company or mature investors of any nationality are going to risk good money promoting an enterprise that because of the BoE would not have international credence in the financial community. A loser.

  12. ferdinand
    Posted June 4, 2016 at 1:24 pm | Permalink

    Well knowing them as you do and as many of us have in the past, that fact is unsurprising.

  13. Androcles
    Posted June 4, 2016 at 10:40 pm | Permalink

    Faisal Islam seemed much taken with the fact that the leaders of our friends and allies had supported the PMs remain call but is there any example in history of a leader advising the citizens of a friendly state to vote against the recommendation of that countries PM in a referendum?

    • Denis Cooper
      Posted June 5, 2016 at 10:30 am | Permalink

      An opposition politician might do it – I recall that in 2008 Hague wrote an opinion piece in the Irish Times urging the Irish to vote against the Lisbon Treaty in their second referendum – but it’s less likely with a leader who is in power. Then it would become an official statement and could damage relations.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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