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Sentance sees poor growth lasting three years

Former Bank of England monetary policy committee member Andrew Sentance predicts that the current period of “disappointing growth and volatility” will last for another three years.

Sentance, who consistently called for interest rate rises during his time on the MPC, joined PricewaterhouseCoopers as a senior economic adviser last November. Speaking at the Association of Investment Companies annual conference for directors in London last week, Sentance noted the “significant parallels” between the economic downturn experienced in the 1970s and 1980s and the current economic environment.

He said: “There are very many echoes of the 1970s’ experience – a long expansion coming to an end, disruption to the international financial system and high and volatile energy and commodity prices and I am projecting we are probably in the middle of a similar period.” He said Western economies, including the UK, are adapting to “the new normal”. Sentance added: “The first phase of this new normal is the continuation of the current pattern of disappointing growth and volatility. That does not mean growth cannot pick up this year but the sort of rate we think is good needs to be calibrated downward.”

He said anything over a 2 per cent growth rate would be good. He said: “We can hold out hope for a more sustained growth dynamic but that will not be until the second half of this decade.”


Economic “dark clouds” are lifting, says IMF’s Lagarde

Christine Lagarde, managing director of the International Monetary Fund, has expressed greater confidence in the global economy but cautioned that it remains in the “danger zone”. When visiting China in November last year, Lagarde warned that the international economy had entered a “dangerous and uncertain phase” and predicted that the world was at risk of […]


Govt to take on £37.5bn Royal Mail pension liabilities

The assets and liabilities of Royal Mail’s pension fund will be transferred to the Government next month, according to reports. Subject to EU approval, the Government will take on £28bn of assets in the deal which would provide a quick windfall for the Government coffers. But it will also take on £37.5bn of liabilities which […]


Cheshire Mortgage Corp changes contract terms after regulator’s check

Sub-prime lender Cheshire Mortgage Corporation has changed the wording of some of its mortgage contract terms after the FSA labelled them unfair. Cheshire Mortgage Corporation is a subsidiary of the Blemain Group. The FSA says the wording in two Cheshire information booklets printed in 2004 and 2006 were unfair because it gave the firm “unrestricted […]


AIC: US govt must answer basic questions on Fatca

The Association of Investment Companies says the US government has not yet answered basic questions about how firms will implement the foreign account tax compliance act. The Fatca legislation is designed to tackle tax avoidance by US taxpayers. It requires foreign financial institutions to disclose details of US shareholders or face a penalty of up […]


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