Tim Price, manager of the VT Price Value Portfolio, says Yes
Not only is growth slowing, but a growing number of companies in the Anglo Saxon economies are issuing profits warnings. Recent “victims” include Adobe, Pearson, Caterpillar, William Hill, and the retailers Walmart and Home Retail Group.
The list of casualties is broad and varied by sector. The reason? It’s called deflation, and it’s entirely agnostic as to the companies it affects, or where they’re based.
We’re now seven years into an experiment in money – quantitative easing – that has created $14 trillion out of thin air but which has clearly failed to trigger inflation in anything other than asset prices. It has helped nobody other than bankers.
Driving interest rates down to zero doesn’t appear to have helped the wider economy. But it has done immense damage to savers and all on fixed incomes. This doesn’t feel like a recovery. It feels like a depression. This is what happens when we allow unaccountable central bankers absolute control of monetary policy.
Adrian Lowcock, head of investing at Axa Wealth, says No
The UK growth figure came in slightly below expectations, but not enough to cause panic. The main driver for this weakness was construction, with manufacturing also contributing to the lower figure.
The UK economy has been heavily biased towards the service sector for many decades and this area continues to grow strongly. And a strong pound has been a headwind for the UK, as it makes our exporters less competitive.
This, combined with a weaker Eurozone, has impacted on the UK. However, there are strong signals that Britain’s economy is on the right track. Consumer confidence is growing and wages have finally started to rise.
Household incomes have also benefitted from the supermarket price war. Cheaper commodity prices will help the construction industry too, and while China’s state visit was met with some protests, trade relations with foreign countries are bringing much needed investment into the UK.