Transcript Slide 1
Stephen Blackman, RBS Group Economics March 2013 Slide 1 Slide 2 It was the best of times, it was the worst of times Slide 3 rarely has borrowing to invest been cheaper and this is unlikely to change soon yet rarely have households been so constrained Slide 4 Size of the economy relative to eve of recession (%) 14 12 10 10% 8 6 4 13% 2% 2 0 -2 -4 -3% Typical recession Source: BoE; ONS Great Depression Current Recovery Difference from typical recovery Slide 5 Equivalent of c.£137 billion a year for UK households 13% 18 million UK families Or £7,500 per family Equivalent of typical UK household’s annual tax bill Source: BoE; ONS Slide 6 Monthly household disposable income by decile £7,000 £6,000 £5,000 Income of just £1,700 a month Income of over £2,000 on IoM (UK) £4,000 £3,000 £2,000 £1,000 £0 1 2 Source: ONS; Isle of Man Government 3 4 5 6 7 8 9 10 Slide 7 30% 11% 5.4% Supermarket Sweep 1.8% 0.9 2.5% Slide 8 Source: Company Results (How) can the IoM (and the UK) achieve strong long term growth? Both are already rich & successful countries Look for options within the existing constitutional settlement Take the welfare system as given What makes economies grow? – More people in work (and other inputs) – Higher productivity So, critical question: what will most effectively boost the UK’s and IoM’s productivity? Humility Slide 9 IoM has more in common with London than the rest of the UK GVA per head in 2011 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - Source: ONS Slide 10 But the demographic challenges are the same Change in key demographic ratios 2010-2015 Source: UN; Isle of Man Government; State of Jersey Slide 11 Migration will play role, but cannot fill the demographic gap Source: UN Slide 12 Stylised evidence on the rate of return to ‘education’ at different ages Source: Heckman Slide 13 Smaller projects generally offer better ‘returns’ than larger ones Slide 14 ‘Planning’ means fewer, more expensive houses In England, ‘planning’ restrictions increase house prices and, hence, living costs Relaxing planning constraints would reduce real house prices in England by 35% & boost the size of the housing stock by up to 17% Slide 15 Inventions of the 1870s The prototype telephone was invented by Alexander Graham BellThank in 1876you and questions A version of the light bulb was invented by Thomas Edison The phonograph is invented in 1877 by Thomas Edison Slide 16 Thank you and keep in touch! Internet www.rbs.com/economics E-mail www.rbs.com/economics/registration Social media @rbs_economics Slide 17 A word from our lawyers This material is published by The Royal Bank of Scotland plc (“RBS”) which is authorised and regulated by the Financial Services Authority for the conduct of regulated activities in the UK. It has been prepared for information purposes only and does not constitute a solicitation or an offer to buy or sell any securities, related investments, other financial instruments or related derivatives (“Securities”). It should not be reproduced or disclosed to any other person, without our prior consent. This material is not intended for distribution in any jurisdiction in which its distribution would be prohibited. 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