The economy is moving in the right direction, says commentatorOct 05, 2012
The national debt is falling, personal debt is being repaid and UK government bonds are seen as a safe haven by international investors. The UK remains a leading exporter and manufacturer, financial expert Justin Urquhart Stewart told directors and financial executives in Milton Keynes.
“Expect gradual growth with more economic volatility to come,” he said. “This is the ‘normal’ that you would expect after a boom.”
Mr Urquhart Stewart (pictured), a regular commentator on the BBC, business and financial TV channel Bloomberg and the American news channel CNN, was speaking at a forum hosted by business advisers Mazars and the Buckinghamshire branch of the Institute of Directors at Mazars’ office in Central Milton Keynes.
He said that Britain was still economically strong, with around 400,000 new businesses set up each year and around 60 per cent of smaller firms looking to recruit in the next 12 months.
“It is unfortunate that these messages rarely appear in the media, as they would lift market confidence,” Mr Urquhart Stewart said.
Taking his audience on a global economic tour, he demonstrated how the economic climate is more encouraging. Growth was returning in the USA and would continue in China, India and Brazil, albeit at a slower rate.
Mr Urquhart Stewart said: “Many corporates in America are profitable and building up cash but they are not yet investing because they lack confidence in the markets. Give companies positive belief and things will change.”
The euro crisis is a political rather than a financial problem, he added. It is an unfinished currency that does not benefit from the fiscal recycling, tax harmonisation and disciplines you would expect to find in a national currency. However businesses in the eurozone are generally sitting on cash without enough market confidence to invest.
He urged his audience to consider their personal financial future as well. Knowing when personal funds would run out in older age was vital.
“Most of us follow a business plan yet as individuals the only thing many people plan is their next holiday. You need to plan to ensure your investments span a range of asset classes to increase the long-term predictability of overall returns.
“The date your money runs out will change each year as good and bad events take place throughout your life, so you need to continuously update your plans. Your personal financial plan should not be about getting the largest possible return on individual investments: it is about managing volatility, minimising risk, reducing costs and optimising returns.”