A City analyst has opined that the UK economy has a good chance of recovery from the Covid hit.
A positive outlook on the currently-bleak UK economic situation was the message from an online interview conducted yesterday (Thurs Nov 26) by Axiom Stone Chairman Jonathan Metliss following the Chancellor’s Spending Review.
Jeffrey Sacks, experienced City analyst and currently Head of EMEA Investment Strategy at Citi Private Bank, was responding to a series of questions from Jonathan in a Zoom conference organised by the Asian-Jewish Business Network and attended by over 50 members .
A significant amount of ground was covered with the following topics addressed, amongst others: Government borrowing, taxation, Brexit arrangements, “green” and sustainable investment, UK-US relations, efficacy of the new COVID-19 vaccines and the Chancellor’s infrastructure investment programme.
Risk factors for the economy included a COVID-19 virus mutation, rising unemployment levels and trade tensions. Nevertheless, Mr Sacks was generally bullish about the UK’s economic prospects over the next 12 months.
On the colossal levels of Government spending to support companies and individuals through the pandemic, he thought it could be repaid by both growth, although more limited in the short term, and higher taxes phased in from next autumn.
There would be challenges with vaccines, such as production, distribution and public take-up. But, he added: “We believe with the confirmation of a vaccine that the Government will be committed to maintaining the strength of the financial bridge it has built to get us through to the other side of the pandemic and so not raising taxes too soon.”
Other positive aspects were undervalued markets (including the London Stock Exchange and real estate sector), UK and US’s mutual interest in “green energy” co-operation with the likelihood of a transatlantic trade deal following a “bare bones” trade deal with the EU.
Mr Sacks felt that the Government, working closely with the Bank of England, had done a “fantastic job” in the pandemic by recognising early on that aggressive support for the economy was needed.
Finally, he advised the entrepreneurs attending not to withdraw in these darker times, but to focus on the UK economy fundamentals which will see a far stronger performance in 2021.
Axiom Stone Solicitors is a highly-diverse business law firm and a headline sponsor and original member of the Asian-Jewish Business Network.