As part of our first Networking Breakfast of 2010 held at the Chatsworth Hotel on the 22nd January, Adrian Wood of HSBC gave us an overview of the current economic climate.

We reproduce a summary of this below in case you did not manage to attend the event.

• Events of 2009 were unprecedented
• First global recession since the 1930s.
• Near collapse of the western banking system, stock market crashes & acute foreign exchange volatility.

• MPC acted sufficiently aggressively, with record low interest rates and QE helping firms gain access to credit.
• Evidence accumulates that the UK is emerging from recession - now technically over.
• Unemployment has not risen as much as the consensus expected & property prices have stabilised.
• Concerns remain, including the level of government debt, home and abroad, & rising inflation.

• Inflation likely to remain above MPC’s target of one per cent to three per cent throughout 2010
• Base rate to rise in June & reach two per cent by end 2010 and 3.5 per cent the year after
• Exchange rates – 12-month forecast for sterling/US dollar 1.61 and sterling/Euro 1.12
• GDP – forecast growth for 2010 at 2.2 per cent

Overview remains one of cautious optimism although there are still a number of obstacles to overcome in order to avoid the double dip recession.