Masterclass Special: Peston’s views
It’s always an interesting debate when Political Editor Robert Peston visits our studios. With so much volatility and uncertainty in UK markets, everyone has an opinion. With years of experience working in some of the UK’s broadcasting giants, what does Robert Peston have to say about the factors sending ripples through markets?
Since 2009, the economic recovery has been slow by historical standards. With inflation forecasts remaining low and interest rates frozen at 0.5% for the last seven years, Robert Peston discusses the outlook for the UK economy.
'My goodness, there’s a lot to discuss. For me, it feels more uncertain than any time since 2008, the time of The Great Crash; why is that? We’ve got the great Brexit debate; should we stay in or leave the EU and what impact may that already be having on the British economy? Then, there are tremendously big things happening all over the world; my particular fascination is with China. China appears to be undergoing a modest resurgence of growth but is that at the price of an acceleration of its debt burden, which it and the rest of the world will regret before too long?'
Cost of Capital:
The UK's current account deficit increased to £32.7 billion in the fourth quarter of 2015. With a Brexit on the cards that could impact not only the cost of capital but the income per household, Peston talks about what’s in store for capital, the asset that many UK households are dependent on.
‘We’ve got the record current account deficit - an equivalent of 7% of GDP - wider than it’s ever been since records began in the early 1950s. We are massively dependent on credit and capital from abroad. The Bank of England worries that in the circumstances of a Brexit, the price of credit in the UK would go up because investors would take a pretty dim view of us leaving.’
China and oil:
‘One of the reasons the global economy remains weak is we've seen a significant slowdown in China over the past couple of years. On the other hand, there are certain benefits to consuming countries, such as falls in commodity and oil prices and we’ve seen a very asymmetric impact of these. Every economist was saying it’s great for a country like Britain because our spending power goes up. Actually, in practice it’s done very little to boost the growth of the consuming countries, the money hasn’t been spent.’
Click here to watch the full video – for not only Peston’s views but the esteemed panel, featuring experts from; Cavendish Asset Management, Prudential Portfolio Management Group, Sarasin & Partners and Jupiter Asset Management.