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Will The UK Economy Stick or Twist?


Last week I was asked to speak as part of a panel at the OPP Live Property Investor Show at the Excel Centre on the subject of the UK Economy and the market as a whole. I thought I may as well share my short speech with you to get some feedback.

Granted there are alot of questions that remain unanswered and were meant to provoke some debate but anyway, here you go…

As perhaps the least auspicious member of the panel, being a mere mortgage broker rather than an economist or an eminant journalist, I can say with absolute confidence that no-one really knows what will happen next. The old adage that if you ask 10 different economists the same question you get 11 different answers has never been truer.

In reality there are just too many unknowns at present to predict with any real certainty other than good old fashioned gut instinct.

Will the Government cuts severely hold back any recovery or are they made out to be worse than they actually will be?

Have most people in the private sector at least decided that if they have not lost their jobs by now they should be fine?

Will the Monetary Policy Committee continue to ignore the sticky inflation issue for the good of the economy and keep interest rates lower for longer? Or will they bow to the pressure of fellow MPC member Andrew Sentance when he says that the MPC are risking “a loss of confidence and credibility” in dealing with the inflation issue and increase rates faster than many believed?

What will be the real effects of the hitherto untried policy of Quantitative Easing? Will this lead to higher inflation once the recovery really kicks in leading to ever higher interest rates?

Will the fact that banks need to start repaying back government aid lead to a further mortgage shortage which will drag house prices down further? Will this in turn cut off further funds for small businesses who will lead the recovery?

Or have the banks really just been “profiteering” recently and are now back in the best condition they have been in for many a year, ready to lend more at these profitable levels of interest no matter what they may say about Capital Adequacy requirements?

Whilst I do not pretend to have the answers, and whilst many economic theories have been thrown away over the past three years, I did learn 3 things in my remedial economics classes that I believe hold true and keep me positive.

1.    Supply and Demand – as far as property in the UK is concerned, with finite space and a lack of houses together with a nation obsessed with property, prices are set to recover.

2.    Everything moves in cycles – no matter how far the fall, there is always a recovery which in my mind has always been due at the beginning of 2012 and I see no reason for this to change. If this is the case it would seem that the next  “winners” in business or investment will be doing many of their deals in the coming months on the way up.

3.    Confidence is king – there is always a danger of talking ourselves into a double-dip as many in the US and in the media in the UK have been trying to do.  Whilst not appearing naive I do believe that we need to continue to keep positive.

Whilst the next 6 months may look grim, it is important for us to keep working hard, and I do believe we have passed through the hurricane and are experiencing the last of the storms.

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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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