Schroders head of UK equities Richard Buxton says he is confident the UK economy can survive both spending cuts and the threat of a double dip recession.
Speaking at the Joint Investment Forum yesterday, Buxton addressed concerns regarding the coalition government’s proposed cutting of 490,000 public sector jobs.
Buxton drew parallels with 1992 when Ken Clarke axed 600,000 public sector jobs only for the private sector to create about 1.8m. Buxton admits this recovery will probably not be as successful but should still be able to absorb the job cuts.
Buxton dismissed the possibility of a double dip recession, pointing out Hewlett Packard’s increased spending in December as an example of economic recovery, one that was overshadowed by media coverage of the Irish economic crisis.
In regards to concerns that Britain does not export enough to sustain a recovery, Buxton indicated the growth of Burberry, joking that as long as a UK company can charge £10,000 for a handbag, the signs were encouraging.