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Economic Outlook: relapse or recovery?

Economic Outlook: relapse or recovery?. David Fenton, RBS Group Economics. Things are looking up for the UK economy. PMI composite index (>50 signifies expansion). Source: Market Economics. Are UK households a spent force?. Debt-to-income ratio. Source: Datastream, RBS Group Economics.

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Economic Outlook: relapse or recovery?

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  1. Economic Outlook: relapse or recovery? David Fenton, RBS Group Economics

  2. Things are looking up for the UK economy PMI composite index (>50 signifies expansion) Source: Market Economics

  3. Are UK households a spent force? Debt-to-income ratio Source: Datastream, RBS Group Economics

  4. 3 yrs 5 yrs UK economy faces a slow grind higher UK GDP, start of recession =100 110 1990s recession 105 100 95 Current recession 90 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 100 = Q2 1992 100 = Q1 2008 Source: Datastream, RBS Group Economics

  5. Policy normalisation will be a gradual process Central bank policy rate, % Source: Datastream, RBS Group Economics

  6. Winners and losers in the “new normal” “Losers” • Property & construction • Retail • Leisure • Food & drink “Winners” • Chemicals • Mining & metals • Pharmaceuticals • Industrials • Not a forecast!! • Many companies will confound these trends. • Other factors need to be taken into account – profitability, leverage and scale.

  7. What if we’re wrong?

  8. Keep in touch

  9. Legal disclaimer This material is published by The Royal Bank of Scotland plc (“RBS”) which is authorised and regulated by the Financial Services Authority for the conduct of regulated activities in the UK. It has been prepared for information purposes only and does not constitute a solicitation or an offer to buy or sell any securities, related investments, other financial instruments or related derivatives (“Securities”). It should not be reproduced or disclosed to any other person, without our prior consent. This material is not intended for distribution in any jurisdiction in which its distribution would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by RBS and RBS makes no representation, express or implied, nor does it accept any responsibility or liability of any kind, with regard to the accuracy or completeness of this information. Unless otherwise stated, any views, opinions, forecasts, valuations, or estimates contained in this material are those solely of the RBS Group’s Group Economics Department, as of the date of publication of this material and are subject to change without notice. Recipients of this material should make their own independent evaluation of this information and make such other investigations as they consider necessary (including obtaining independent financial advice), before acting in reliance on this information. This material should not be regarded as providing any specific advice. RBS accepts no obligation to provide any advice or recommendations in respect of the information contained in this material and accepts no fiduciary duties to the recipient in relation to this information.

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