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Season 2 Episode 1:
The state of the economy with Natalie Brain

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And we are back for season 2! On this episode, show hosts Dan Mikulskis and Mary Spencer catch up with Natalie Brain to explore the role of forecasting – and how things have changed over the last 6 months.

Key takeaways:

  • Scenarios – the good, the bad and the central
  • Broadening out bands of uncertainty
  • The shapes of the recession, V, U or square-root recovery
  • Risk of permanent scarring to the economy - behavioural / demand led shifts and uncertainty over employment
  • Why we’re approaching a key couple of months economically in the UK with Brexit trade talks and the end of Furlough
  • Is there a greater spread to economic forecasts in today’s environment – but does this reflect real uncertainty or does it reflect the false certainty in normal times... was the uncertainty always there? And why we currently “have permission to be less certain”
  • Scenario testing with clients
    • Some of the more extreme scenarios eg inflation, stagflation
    • Alternative scenarios
    • Is there a realistic pathway to higher inflation
  • What hasn’t changed since the start of the year – surprisingly a few things:
    • Role of monetary policy- continues to be the dominant paradigm
    • US election – potential market implications of a Biden win (tax, curbs on tech giants, green energy investment)
    • New Fed strategy – interest rates lower for (even) longer, supportive policy here to stay for a very long time, a key factor in markets
  • Are we entering a new monetary policy paradigm / tipping point? It is hard to imagine how monetary policy gets back to a “normal” world
  • EU recovery fund
  • Any positive news among all the gloom? A push toward change on climate policy, and building back better
  • Key main take away: the role of monetary and fiscal policy, and role of government in how economies and markets are functioning

Recommendations:

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Each LCP investment uncut podcast is for information and marketing purposes only and does not constitute any form of investment or financial advice or a financial promotion (under the Financial Services and Markets Act 2000). All views expressed by the podcast hosts and guests are purely their own opinions and do not represent those of LCP, its clients or affiliates. Our podcast listeners should always seek independent financial or legal advice before making any financial or investment decisions. Please refer to the Legal Notices section on the LCP website for further information.​

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