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Central bank actions key to UK economic prospects

Central bank actions key to UK economic prospects

The policy response from central banks and governments means the UK’s exit from the pandemic-induced recession has been faster than usual, but the direction of the UK economy will continue to be dominated by these policy responses, according to the guests on the latest FTAdviser podcast.

Stephen Snowden, bond fund manager at Artemis, said: “I don’t think asset prices have ever recovered [from a recession] in the same way twice.

"We get a different reaction every time we put the same ingredients together. We have had a deep economic shock in the UK and globally, but the actions of central banks and governments mean the recovery has been more rapid than in the past.

"But the policy actions, including the government spending, will have to be dealt with in future, and that could determine the outlook for the economy." 

Gerard Lyons, chief economic strategist at Netwealth, said: “Markets right now are being driven by health, geopolitics and by monetary and fiscal policy.

"But while there is capacity for health issues and for geopolitics to cause extreme economic outcomes, it is more likely that it is the direction of monetary and fiscal policy which will determine the fate of the economy.”

Job Curtis, who runs the City of London investment trust, said a tangible example of the improved economic outlook can be seen in the improved level of dividend payouts among FTSE 100 companies, particularly in the mining and bank sectors. 

To listen to the full podcast, click on the link above. FTAdviser's podcasts are also available on Apple Podcasts, Spotify, Stitcher and Acast.