Mha Plc · LSE:MHA
Mha — Conference Presentation (September 2022)
27 slides from Mha's conference presentation, September 2022
Slide 1: UK and Global Economic Update
UK and Global Economic Update Professor Joe Nellis Professor of Global Economy www.cranfield.ac.uk
Slide 2: IMF Growth Projections (July 2022)
IMF GROWTH PROJECTIONS (July 2022)
Slide 3: Growth Projections by Region (July 2022)
GROWTH PROJECTIONS BY REGION (July 2022)
Slide 4: 'Spheres of Influence' Continue to Change
‘Spheres of Influence’ Continue to Change China USA EU & Russia Implications for: Balance of power? Trade relationships?
Slide 5: Update on the UK Economy
Update on the UK Economy • 2021 saw a V-shaped rebound after the 2020 fall • GDP growth of 7.5% – fastest growth rate since WWII • Economy is now just above pre-pandemic situation • 2 years of lost growth • But ‘bleak’ economic outlook for the next few years Impact of Ukraine Crisis? How long will t
Slide 6: UK GDP Growth (annual, %)
UK GDP Growth (annual, %) Slowdown in trend growth rate – IMPLICATIONS? Source: Office for National Statistics, Office for Budget Responsibility
Slide 7: Update on the UK Economy
Update on the UK Economy • Unemployment is now at a record low 3.6% - below pre-pandemic level • But labour shortages in many sectors creating challenges: • Job vacancies (almost) at record high • Employment rate at 75.5% is still below pre-pandemic levels • Limited capacity to satisfy recovery in d
Slide 8: UK Unemployment Rate
UK Unemployment Rate (Percentage of economically active people aged 16+) Source: Office for National Statistics
Slide 9: UK Unemployment v Vacancies
UK Unemployment v Vacancies (aged 16+) May - July 2022 3.6% June - August 2022 1.27 million Source: Office for National Statistics
Slide 10: But….Real Wage Stagnation
But….Real Wage Stagnation (figures to June 2022) Increasing Wage Demands - Public v Private Sector Source: Office for National Statistics
Slide 11: UK Productivity Gap – 'Levelling Up' Agenda
UK Productivity Gap – ‘Levelling Up’ Agenda
Slide 12: Business Investment and Brexit
Business Investment and Brexit British firms would be investing £31 billion more had pre-Brexit trends continued
Slide 13: Government Finances
Government Finances 10-year Government Bond Yields at 14/9/2022 – Highest since 2011 Reflecting inflation expectations and risk Implications for: • Debt financing • Corporate borrowing • Fixed-rate mortgages
Slide 14: Monetary Policy
Monetary Policy • Monetary policy supported post-COVID recovery with: • QE (pushing down bond yields) and record low interest rates • But… interest rates are now rising • Six rises in 8 months – and more to come • Up from 0.5% to 1.75% on 4 August – highest since December 2008 • Fine balance between
Slide 15: Causes of Inflation Today
Causes of Inflation Today 1. Global supply chain bottlenecks • Consequence of the pandemic, both during and after 2. Shift in demand towards goods v services • For example, boom in second-hand car sales! 3. Aggregate stimulus and post-pandemic recovery • Overhang of fiscal support packages during th
Slide 16: UK Inflation - Consumer Prices Index
UK Inflation - Consumer Prices Index August 9.9% Source: Office for National Statistics
Slide 17: Inflation – Poorest Being Hit Hardest
Inflation – Poorest Being Hit Hardest Source: Institute of Fiscal Studies
Slide 18: UK House Prices – Still Going Strong!
UK House Prices – Still Going Strong! Is a ‘correction’ to house prices likely? Source: Nationwide Building Society, August 2022
Slide 19: The Consumer is King….But Facing Crises!
The Consumer is King….But Facing Crises! • An uplift in consumer spending helped post-COVID recovery – • More than £200bn in extra household savings during the pandemic • Some spent as economy tries to return to normal – a ‘multiplier effect’ • BUT…many households are now facing a ’cost-of-living cr
Slide 20: Energy Price Crisis - Before Govt's Energy Price Guarantee
Energy Price Crisis - Before Govt’s Energy Price Guarantee (based on energy price cap increase & energy rating of properties) Least Efficient Properties Source: ONS, Nationwide Building Society
Slide 21: GfK Consumer Confidence Barometer
GfK Consumer Confidence Barometer Britons are more pessimistic than at any time in at least half a century Source: Growth for Knowledge (GfK), 27 June 2022
Slide 22: GfK Consumer Confidence Barometer - UK Index August 2022
GfK Consumer Confidence Barometer - UK Index August 2022 Source: Growth for Knowledge (GfK), August 2022
Slide 23: State of the UK Economy – A Summary
State of the UK Economy – A Summary…. • Slower trend growth ahead • Low business investment – Brexit impact? • Mild recession expected – and to last for • Rising inflation – international & domestic more than a year • Rising national debt (100%+ of GDP) & • Historically low unemployment – but labour
Slide 24: Major Challenges Ahead….
Major Challenges Ahead…. NHS & Normalising Improving Social Care relationships productivity Costs with the EU Forging Dealing with international ‘Levelling up’ the cost-of- trade & agenda living crisis investment deals
Slide 25: And Major Opportunities….
And Major Opportunities…. Sterling is at Inward 37-year low Property Corporate against the Investment Investment US$.... Acceleration of Exports from UK Tourist Digital Skills the UK Industry and Businesses
Slide 26: In Conclusion….
In Conclusion…. ‘Adjustment to a post-COVID, post-BREXIT (and post-Ukraine war) new normal will have economic costs that last into the long term’ Institute for Fiscal Studies
Slide 27: Q&A
Q&A