The Intelligence Squared Economic Outlook with Martin Wolf (Part 2)
Feb 14, 2025
auto_awesome
Martin Wolf, Chief Economics Commentator at the Financial Times, shares his insights on the turbulent economic landscape of 2025. He discusses the likelihood of Donald Trump’s return to power and its impact on global trade. Wolf also highlights the ongoing conflicts in Ukraine and Gaza and their potential diplomatic fallout. He analyzes successful economic models from smaller nations like Denmark and Switzerland, while addressing the complexities of tax strategies and the challenges economists face in communicating with policymakers. Expect a thought-provoking perspective on the future!
The UK faces significant economic growth challenges due to slow infrastructure development caused by structural planning issues, contrasting sharply with faster-paced nations like China.
To enhance its economic landscape, the UK could learn from the Nordic model, particularly Denmark's strong public services and Switzerland's effective decentralization practices.
Deep dives
The Urgency of Infrastructure Development
The discussion highlights that a significant barrier to economic growth in the UK is the inability to build essential infrastructure quickly. Structural issues in the planning system create delays that hinder development in housing, factories, and public infrastructure, contributing to an overall stagnated economy. For instance, comparing the UK to China, which constructed two-thirds of the world’s high-speed railway in just 12 years, underscores the urgent need for efficient building processes in the UK. Addressing these planning challenges is deemed critical for facilitating modernization and ensuring economic growth.
Low Savings Rates and Economic Impact
The episode examines the UK's notably low savings rate, which poses challenges to investment and economic growth. Despite having some of the least generous state pensions in Europe, many British households still do not save adequately, unlike their counterparts in countries with better pension systems. This phenomenon is puzzling and reflects deeper issues within the economy, such as income inequality and high housing prices, which compel individuals to prioritize spending over saving. The reliance on foreign savings for investment further complicates the fiscal sustainability of the economy.
Lessons from Nordic Economies
The conversation suggests that the UK could benefit from emulating certain aspects of Nordic economies, particularly Denmark and Switzerland. Denmark is noted for its vibrant labor market, strong public services, and innovative sectors, making it an attractive model for improving opportunities for young people. Similarly, Switzerland's successful decentralization allows for significant local decision-making and efficient resource management. By learning from these smaller, yet dynamic economies, the UK can explore innovative strategies to improve its own economic landscape and address pressing challenges.
2025 is set to be a seismic year for the global economy. Donald Trump will return to the White House with an ‘America First’ agenda that threatens to dismantle global trade. Wars in Ukraine and Gaza could continue to escalate and cause turmoil in diplomacy. And the race to develop AI will accelerate as China and the US battle it out for technological supremacy.
Who better to make sense of these unsettling and fast-changing times than Martin Wolf, Chief Economics Commentator at the Financial Times? Widely regarded as one of the world’s most influential writers on the global economy and a multi-award-winning financial journalist, Wolf has been chronicling and analysing geopolitical and economic upheaval for nearly 40 years. He has written five bestselling books. His latest, The Crisis of Democratic Capitalism, maps out the implications of globalisation, technological development and the impact of democratic decline on the global economy.
Wolf joined us onstage for the this installment of the Intelligence Squared Economic Outlook as he discussed what we can expect from 2025 and beyond in conversation with BBC News presenter and Royal Correspondent Jonny Dymond.
This recording is part of The Intelligence Squared Economic Outlook series of events made in partnership with Guinness Global Investors, an independent British fund manager that helps both individuals and institutions harness the future drivers of growth to achieve their investment goals.
To find out more visit: https://www.guinnessgi.com/