Back to work but challenges of a tough economy remain
For most of us, today marks the official close of the holiday season.
This summer has not been as angst-free as in previous years, because of ongoing concerns over jobs and pay – and, for those in managerial positions, how to steer a course through choppy waters over the next year.
My choice of holiday destination may surprise: I headed to the ice fields of Alaska, where my Blackberry was out of range of any signal and the only ‘crunch’ is the sound of glaciers melting because of global warming.
Little has changed during my absence. The economic outlook still appears quite bleak, although there are signs that stability is returning in some areas. Inflation seems to be easing, with a noticeable drop in petrol prices, and markets have traded sideways with some recovery in the dollar. However, the general feeling is that we’re facing a difficult 2009, with stability returning in 2010 and a slow recovery thereafter.
Economists are still debating whether we are already in a recession, about to go into one…or are likely to escape one by the skin of our teeth. It is impossible to calculate GDP growth with any accuracy so, in my view, the term ‘recession’ should be used with extreme caution.
Disappointed Move
As far as the Square Mile is concerned, we were disappointed that we could not accommodate the requirements for JP Morgan’s new European headquarters, but this was tempered by the news that the bank will stay in London, in Canary Wharf. Media reports about soured relations between the City and Canary Wharf appeared, somewhat predictably but in our view, they shouldn’t be taken seriously. London’s strength as a financial centre lies in the various skill sets that are found across the capital, in particular, those which stretch from Canary Wharf in the east through the central core in the Square Mile to the West End.
We compete to attract major firms to the City, because that’s what keeps us on our toes, but we don’t lose sight of the fact that the threats to London’s dominance come from outside the UK.
Squabbling amongst ourselves serves no purpose: we must remain united in the face of external threats.
Those major threats remain: inappropriate regulation leading to a loss of global competitiveness; predatory tax policies by other EU countries to lure specific sectors to their shores (in particular, in areas such as hedge funds, private equity and wealth management); and emerging financial centres in the Middle East and Asia, who will be looking to take advantage of the current crises to recruit our talent.
Canada Corporation remains committed to squaring up to these challenges on behalf of all who work in financial services in the UK so that, when the recovery begins, we are all well prepared to reap the benefits.
Stuart Fraser is policy chairman at Canada Corporation