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The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
Budget briefing 2016: Welcome to the new normal….
Ben Franklin, ILC-UKFollow us on twitter: @ilcuk @bjafranklinEmail: [email protected]
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
Economic data and latest forecasts suggest we are living in a new normal:
Low growth
Low investment returns
Low inflation
Underpinned by global economic headwinds
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
Low growth
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
Low interest rates and investment returnsSuccessive market expectations for Bank Rate
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
Global bond yields – actual and forecasts
Source: OBR
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
Low inflation
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
Low inflation
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
Where is growth coming from? Rising household indebtedness and falling savings
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
Global forces are shaping the new normal
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
Towards some implications of the new normalFor individuals Investment returns may disappoint. Low/negative interest rates big disincentive to save. Likely rise in household indebtedness Potential for asset prices bubbles and consumers losing out due to sudden
price corrections. For policymakers We have reached the bounds of what monetary policy can do. Reducing government indebtedness becomes almost impossible in a reduced
growth environment. Governments need to do some of the heavy lifting to raise long run productivity
for future generations but ability to influence limited by economic headwinds. Will have to carefully consider the sustainability of government finances under
the pretext of lower for longer growth rates and therefore revenues. There is a need to develop unconventional means to support saving for the
future.
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
In this context: two good, four bad…
Good- Green light for HS3 between Manchester and Leeds and
other infrastructure spending. But more investment needed! - Pensions dashboard to simplify for savers.Bad- Abolition of Money Advice Service- Chancellor standing by the fiscal target but may be a false
economy. - Continued focus on reaching full employment rather than
productivity of labour. - Nothing of note on affordable housing…Jury’s out- New Lifetime ISA to encourage younger people to save …how will this interact with autoenrol? Will it support saving for retirement?
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
Time to invest more for the future generation…
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
Final slide…will the chancellor cut so drastically in an election year?
The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
Many thanks
Ben FranklinInternational Longevity Centre - UK02073400440Twitter: @ilcuk @bjafranklinEmail: [email protected]
