Economic Update for CFOs

We were pleased to host an Economic Update at our recent CFO Dinner in London, in partnership with Mills & Reeve and CFGI.   

Thanks to our guest speaker, Chris Hare, Senior Economist at HSBC, for his insights into the global economy, UK economy and the US election. Key points from Chris's talk included:  

• Global economy: Notwithstanding obvious geopolitical risks, we’re fairly sanguine about the prospect of decent economic growth, stable inflation and further (in some places significant) interest rate cuts. On growth, there are differing stories across regions, although the US is the standout among developed markets; India among emerging markets. Continental Europe (and, to an extent, the UK) has been held back by the aftermath of the energy crisis, weak world trade and ongoing consumer caution. But even there, we see a gentle improvement in growth, but the prospect of lower interest rates.
   
• The UK economy: Our outlook is broadly consistent with the view of continental Europe. But we have recently lifted our growth forecast on account of the fiscal loosening in the Budget (growth above 1.5% in 2025 and 2026). We have also seen very positive (dis-)inflation developments – the CPI rate stood at 1.7% in September and wage gains are softening. In turn, we think that can help deliver significant further Bank Rate reductions, down to 3% by early 2026. That’s around 100bps below market expectations, which may be placing an undue ‘inflation stickiness’ premium to the UK. That said, NIC and NLW increases do pose upside risks to our forecast for inflation and Bank Rate.
   
• US election: Things remain very uncertain as Donald Trump’s policy agenda becomes clearer. Risks include (i) US tax cuts; (ii) tighter US immigration policy; (iii) significant tariff increases (60% for China, 10-20% for the rest of the world; (iv) geopolitical uncertainties with respect to Ukraine and the Middle East. Overall these risks might lean in a somewhat inflation direction for a number of economies.

Our thanks to Chris, and to Zickie Lim at Mills & Reeve and Paul Cooper at CFGI for partnering with us to host the event. Attendance at the CFO Dinner is by invitation for CFOs of growth technology and life sciences businesses. If you are interested in finding out more about future events, please contact Tamsin Waller at Bailey Fisher.