The British economy has been through a bit of a trauma with the jolt from the UK-EU referendum. Considerable uncertainty prevails and some big political decisions have yet to be taken.
The Bank of England, somewhat panicked, has stepped up to the plate to reassure business it is helping, albeit we struggle to see immediate PMI data as a strong reason to act, nor cutting of historically low base rates as doing much for consumers or the food industry. What the BoE has done, though, is signal that the next macro-economic steps need to come from the UK government.
We see the opportunity for a necessary change of policy direction seeking to improve, for once, the supply-side productivity, capability and capacity of the UK. Such weighty matters are not short term in nature but become passed from pillar to post by demonstrably short-term politicians. However, with Brexit it will be more essential than ever for the UK to be more competitive.
As such, we look for the Conservative Party conference and Autumn Statement to show signs of demonstrable change, where dithering, dysfunctionality and dire decision-making (3Ds) can be replaced by something more strategic and visionary. The UK needs more capable human capital, signalling the need for a fit-for-purpose education system and university research programme. With English as our language we are blessed, but we need to give much greater thought to our digital communication infrastructure.
Speaking of infrastructure there is an imperative for across-the-board change in policymaking to ensure the UK has enough energy and transport capacity. The 4Hs are a metaphor for the 3Ds. HS2 & HS3, Heathrow and Hinkley Point characterise a chronic failure of policymaking that needs to be fundamentally addressed by clear decision-making from here on; if not these four, then what? Doing nothing is not an option and if there is one thing the referendum taught policymakers, the UK is bigger than London. It is time for those elected to run the country to take strategic initiatives to run it properly, strategically, compensating fairly the inconvenienced, but not being led by them.
Over to you, Theresa.
Clive Black is head of research at Shore Capital Stockbrokers
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