brexit forecast: what does it mean for you, our industry and uk business?
TRANSCRIPT
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Brexit – what does it mean for our industry and for UK business?
Hamish McRae
• Five great medium-term global shifts and …
• … their implications for the world of finance
• Three big questions about the future
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People get consumers wrong …
There’s no chance that the iPhone is going to get any significant market share. No chance.
Steve Balmer, 2007
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… and the economy wrong
I am 100 per cent sure the US will go into hyperinflation.
Marc Faber, 2009
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The presentation's structure
• Europe’s place in the world economy …
• … its long-term trends and performance …
• … and its short-term outlook
• How far this changed by Brexit?
• What does this mean for our industry?
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Some implications so far
• Europe is a huge market – but slow-growing
• There is general shift to the emerging world
• Thanks to demography, that shift will continue
• So is Europe becoming the new Japan?
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Now the short-term outlook
• The entire developed world has suffered …
• … but much of the emerging world escaped
• But the recovery is fragile and uneven
• There would have been a downturn anyway
• How bad might it be for Europe in general?
• And how bad for us?
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Thoughts about the cycle
• There is such a thing as the business cycle!
• This one was already mature …
• … and it is artificially supported
• But there is spare capacity and little inflation
• Some dip between 2017 and 2019 was inevitable
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How does Brexit change this?
• It hits growth: say 1% off UK, 0.5% off Eurozone
• Some sectors – London property – take a beating
• But beyond 2017 everything is to play for
• What is the nature of the deal and the process?
• How quickly are other EU stresses tackled?
• Will the UK remain outward-looking?
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And the hit to our industry?
• Technology trumps politics ...
• … this is nothing like the great financial crisis
• Communications technologies are global
• Britons are technologically sophisticated …
• … and if they have money they shop
• But first, let’s go to Rome …
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Inauguration of Pope Benedict XVI2005
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Inauguration of Pope Francis2013
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What does this this mean for us?
• We need to counter the discourtesy …
• … and the segmentation of discourse
• Paradoxically, communications drive us apart
• So how do we talk across divides?
• How do we restore trust in experts?
• Will culture and identity trump physical proximity?
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What does this mean for Europe?
• Brexit need not be a long-term disaster …
• … though of course in the short-term it is
• But a multi-speed Europe is both inevitable …
• … and preferable (soft membership for Russia?)
• How do politicians adapt a 60-year-old-model?
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Europe’s future – one view …
The euro is our common fate, and Europe is our common future
Angela Merkel
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Europe’s future – another one …
The UK is not going to leave the European Union. Of course not. We are inextricably wound up with Europe.
Nick Clegg
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Europe’s future – and a third!
It's a European Union of economic failure, of mass unemployment and of low growth.
Nigel Farage
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Brexit – what does it mean for our industry and for UK business?
Hamish McRae
• Five great medium-term global shifts and …
• … their implications for the world of finance
• Three big questions about the future