Banking crisis, global recession and recovery

Total debt in the US and UK

Lest we forget…. In 1989 private debt to GDP in Japan was 212% Now it is 110% Government debt to GDP rose over the same time from 51% to 178% Total debt is broadly unchanged and real GDP has been essentially flat

In 1989 private debt to GDP in Japan was 212%

Now it is 110%

Government debt to GDP rose over the same time from 51% to 178%

Total debt is broadly unchanged and real GDP has been essentially flat

How have things played out so far? Collapse in manufacturing and trade De-leveraging in private sector has begun IMF talk about “ Balance sheet” recession Globally synchronised downturn Policy measures halted the collapse

Collapse in manufacturing and trade

De-leveraging in private sector has begun

IMF talk about

“ Balance sheet” recession

Globally synchronised downturn

Policy measures halted the collapse

A recession of the North, Midlands and Wales

Regional Unemployment Rates

Low skilled cities hit harder

The fiscal hole

Government finances hit hard

Debt is expected to double

Debt to remain high for a generation (official version)

But low in a broad historical context!

Public spending * IFS & own calculations Thatcher Major Blair/Brown ?

Capital spend cut dramatically. Housing, transport and regen hit hard. Chart 9: possible departmental spending allocations (2011/12 – 2013/14) Source: IFS

Public sector vulnerability 2

Public sector growth 1998-2008

Knowledge Industries in Birmingham

Knowledge-Industries in Birmingham UK=1

Employment projections (Oxford Economics)

Birmingham well placed to benefit in certain sectors Financial, business and professional services gain big benefits from locating in large cities Agglomeration economies by sector High end BPS is unlikely to locate out of London, but the city will be attractive to - Relocation of back office, shared services and public sector