Cardiff Breakfast Club 20th January – Rhys Herbert, Lloyds Bank

Posted: January 22, 2015 in Cardiff Breakfast Club
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At our first Breakfast Club of the New Year, we were joined by Rhys Herbert, Senior Economist for Lloyds Bank. Rhys works in the Economics Research Department for Lloyds, where he is responsible for analysing and forecasting trends in a number of the major G10 economies.

Global Output ImprovingRhys began his presentation to the Club by stating his prediction that we should “see this as a year that UK interest rates will start to turn around.” Since the recession, interest rates have been incredibly low but as the economy recovers, interest rates should increase alongside it. Rhys says that a key question that needs to be asked on the topic is “Should interest rates still be at the emergency levels they were at during the recession?” He commented that this is even more relevant in the US, since interest rates there are currently even lower than the UK, although they are expected to rise again this year.

Since the recession in 2009, the UK has seen a very hesitant recovery. However, the recent fall in oil prices is a key factor in the UK’s future recovery. Oil prices are currently at slightly more than pre-recession levels but significantly less than at any other point since then which is helping to bolster the economy.

Rhys also explained that he doesn’t see disinflation as a huge concern for either the UK or the US. The US is generally similar to the UK with a slightly hesitant recovery initially but their economy is now doing quite well. By contrast, the overall level of output in the Euro area remains low and inflation there is currently so low that deflation is more of a concern.

Rhys continued by explaining that UK inflation figures have fallen sharply over the past few months which would make it difficult at present to increase interest rates. However, the current domestic situation does point to good inflation ahead and we could perhaps expect a rise in interest rates towards the end of this year.

Rhys also noted the relevance of UK politics to economic forecasting with the upcoming General Election in May.  He explained that as the political situation in the UK is currently unusually uncertain, it is Welsh Economy Undeperformingdifficult to make economic predictions for immediately post election.

Concluding his presentation with a focus on Wales, Rhys said that the Welsh economy is recovering much more slowly than the UK as a whole. He also made reference an over-reliance on the public sector and a need for more investment in the private sector.

Breakfast club meetings are held monthly at St. David’s Hotel and Spa with a range of guest speakers. For further information and booking details, please contact or phone 02920 549597.

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