Your money-making expert. Financial journalist, TV and radio personality.
Global recession is coming. At the moment we are all inundated with petrifying news. Energy Prices, tax increases, war and a general sense of doom often feels like it is eclipsing us. None of it is reassuring and we are rarely seeing any solutions to ease our fears.
This also comes at a time that OECD report that the “trust in government” in the United Kingdom is at a record low and shows that our trust in public spending and safety is some of the poorest in the world.
We also face the fact that our government’s unemployment spending is among the lowest in the world, leaving many people losing even more faith.
There is now so much bad news happening daily that it is constantly battling for our attention.
To try and get some straight answers, we sit down with financial journalist Jasmine Birtles and ask the two biggest questions on the financial horizon.
Question: I think the most pressing fear for many of us is that with all the extra money that has been printed, how on earth is it supposed to retain value? Are we heading for a crash?
Jasmine: “I think we need to brace ourselves for a time of volatility and recession. Sorry to say it but it’s looking a lot like the 70s with rampant inflation and a stagnant economy, i.e. ‘stagflation’.
“That’s a very tough situation to be in because inflation generally demands higher interest rates to keep it in check while a stagnant economy needs looser monetary control to get business going.
“It could all have been avoided, I think, if various Western governments – including ours – were not so addicted to quantitative easing (printing money) and if they hadn’t been taken in by the idea of lockdowns. I have been a lockdown sceptic from the start and the situation we’re now in, and will be in further down the line, illustrates why the idea was so harmful.”
JB: “Actually inflation should lead to wage increases as employees demand more, although most employers won’t be able to raise salaries enough to keep up with inflation. Some employers will have to put their prices up in order to cover higher wages but that’s going to be difficult for business. Customers may not pay those prices..
“Rather than being worried about austerity, we need to be wary of interest rate hikes. Really we should have had interest rates of around 7-8% even before the Russia/Ukraine debacle,. Now we need them to be even higher. However, even a 1 per cent hike will mean that many will go bankrupt and others could lose their homes.
“That’s the big problem with inflation. Only pain gets us out of it…our pain. In the 80’s interest rates were well into double digits. That’s where we should be headed now except that no government can bear to do it as they know they will be kicked out if they do.
“I suspect our government will keep slightly raising interest rates so that we gradually feel the pain but it will mean that inflation will continue for much longer than it should.
“Interest rates have to go up and go up a LOT. This is potentially good for savers but will be very bad for borrowers, particularly mortgage holders. It could also be bad for the stock market if interest rates go up a lot (as they should) as a lot of people will move their money from equities to cash.
“I’ll be very interested to hear what Sunak has to say in the Spring Statement on 23rd March but I suspect his solutions won’t be anywhere near as tough as they need to be. He’s one who wants to be liked.”
On March 31st as 7PM; following on from Sunak’s announcement, Jasmine Birtles is going to host a live webinar to answer as many questions as possible. Recognising how worried people are and also that times are tough financially, she is also rounding up financial and economic experts to join the conversation and is also offering this service for free.
…plus friends in the audience who are specialists in digital money and investing.
They will be looking at the big financial and economic issues facing people right now, including:
…plus any of the burning questions you would like to put to our panel.
As always, Jasmine makes it very clear that “you will be able to ask any questions you like of our panel – no question too dumb – and we expect to have a lively discussion of all the subjects above…and more.”
Sign up for free now and tell your friends to come along!
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Great that there’s some good advice on here.