Global Economic Outlook – The New World Order…

I went to a really fascinating talk at Warwick Business School last week.  Dr Gerard Lyons, Chief Economist at Standard Chartered bank and respected global economic forecaster, shared his expert knowledge, insight, and personal views on key economic issues with MBA students and Alumni.  In his talk he covered the following:-

• How the world got into the current economic crisis
• The immediate economic outlook for the short-term
• Further implications for the global economic system

In 45 minutes he was able to explain in plain English what myself and many in the audience have struggled to understand from watching hours of TV programmes and reading multiple articles in newspapers and magazines.  He was able to translate complex economic jargon, using metaphors from the  world of film to illustrate a concise picture of what has already happened, and a set out his vision of what is probably going to happen next.  He has a good track record of being able to do this as his Biography attests.

In summary, Dr Lyons explained how the state of our economy is driven by 3 key elements –  economic fundamentals;  policy responses from government and central banks; and confidence.  He described how the lessons learned from Japan’s deflationary cycle have been used to accelerate UK policy responses which have been designed to restore confidence by “throwing the kitchen sink…” at the problem. As a result Dr Lyons summarised the following for us:-

• “You can’t stop what’s coming” – the downturn will be steep, particularly in the west but less so in the east, for at least the next 12-18 months;
• There is a significant long-term shift in economic power from the western economies to the east – China, India and the Middle East; and
• The UK must face up to it’s challenges – increase added value and look to increase exports to strong and growing markets in the east.

I’ll be watching out for more comments from Dr Lyons as things develop. In the meanwhile there is a short video interview recorded on the night that can be seen here: Dr Lyons Interview