‘UK economy must face new world order’
Source: This Is Money – Adrian Lowery
The British economy will never be the same again and boardrooms are refusing to accept the reality: that is the stark warning that came from a panel of experts today.
The environment for business will ‘never return to pre-recession normality’ argues the hard-hitting report from a panel of academics convened by BDO LLP.
Moreover, the panel warned that the economy’s precarious condition is here to stay until 2015.
The report was published at the same time as research from accounting and business services firm BDO showing that 44% of firms believed that the economy would return to ‘business as usual’ within the next two years.
Peter Hemington of BDO said that the global economy has become ‘unnaturally skewed through the rise of India and China’.
‘Although this recession may be over – we hope – the consequences still remain. As a result, the economic environment will remain tough for some time to come.
‘Linked to this, we are going through a period of profound societal and technological change which will mean that some business models will wither away and die, while others will thrive and grow.
He added: ‘Businesses need to think carefully about how the world is changing and reinvent themselves to make sure they survive and thrive in the new environment.’
The report included forecasts by senior economists from bodies such as the CBI, the Institute of Directors and the Institute for Public Policy Research, in collaboration with think-tank the Centre for Future Studies.
It accused business leaders of being ‘blinkered’ and complacent in the face of what promises to be a new economic order.
The study pointed out that in 2009, the UK economy shrank by 4.8%, the fastest pace of decline in a single year for 88 years. Recent data from the International Monetary Fund reveals the UK’s recession to be six times more severe than the global average.
Taking the recession into account, the UK economy has grown by an average of only 1.7% during the last decade.
The study concludes: ‘We believe the next five years will be precarious for companies with high levels of uncertainty, risk and complexity. Although we will see recovery, the word will have a new meaning. We will not return to how things were.’
Read more: http://www.thisismoney.co.uk/news/article.html?in_article_id=500105#ixzz0gOUeF8pu
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