While speaking at the MELCC (Midlothian and East Lothian Chamber of Commerce) Annual Awards Event, Thorsten Fischer (Senior Economist at Royal Bank of Scotland) expressed his personal views on the current economic climate and also answered a few questions posed by local businesses. One would assume that the representative of a failed bank would try to provide optimistic views and gain the trust of the crowd, instead Dr. Fischer was painting a dark and gloomy picture of the current and future economic condition of UK.
Thorsten Fischer joined RBS in October 2005 as a Senior Economic Adviser. An applied micro-economist, who has published in peer-reviewed economic journals, his areas of specialisation include natural resources, environmental issues and transportation. Thorsten is also interested in risk management (he is a certified Financial Risk Manager), public policy and regulation. He regularly presents to internal and external audiences. After gaining a first diploma in business administration and economics from Osnabrück University in Germany, Thorsten left his home country to earn a Ph.D. in economics from the University of Georgia’s Terry College of Business, where he also worked as an instructor of economics and international business. After graduation, he spent five years at an independent economic consultancy in Pennsylvania.
Source RBS website
Though Dr. Fischer wasn’t giving exciting news such as UK coming out of the recession, the crowd welcomed his honest opinions. That’s what the businesses were wanting to hear, and not just words of empty hope that is propagated by the ruling party. Highlights of Thorsten Fischer’s speech were
- It is going to take 3 to 4 years before our economy returns back to boom time.
- Can’t really forecast exchange rates, but Sterling might take about 6 years to recover against Euro.
- Most traders are optimistic and believe that there will be a V-shaped recovery. Sadly, it will not happen. There are various other market and economic forces that will prevent the steep climb.
- There will be high inflation in 3 years when liquidity gets back to normal.
- Climate Change Targets? Banks and the government are aware of the need, but difficult to account for in the current tough economic scenario.
- Opportunity for export will increase as Euro zone can afford to pay for products from the UK.
Yes, the speech wasn’t an upbeat one, but Dr. Fischer wanted local businesses to be aware of the reality of the economic forecast. He was asking businesses to plan their future and current developments based on hard facts.
Later while networking over dinner, Thorsten Fischer was asked if the return of the 17.5% VAT would affect buyer behaviour once again. Dr. Fischer said it might not affect FMCG retailers but might affect service providers and retailers of big-ticket items.
For a recent economic insight guide published by RBS, follow the link.
Photo by Rafael Matsunaga