1. The UK Economy in 2011-12 Bumping along…. Dennis Turner Chief Economist, HSBC Bank plc

2. THE RECESSION IS OVER

3. A deep recession

4. ALL THE LEVERS PULLED

5. Fiscal policy loosened

6. Government finances already in deficit

7. …and then deteriorated rapidly March 2010 Budget Report

8. Interest rates fall to historic lows

9. Lowest interest rates for over 300 years

10. And sterling plummeted

11. Sterling takes a pounding

12. A slow recovery is underway Forecast

13. RISKS

14. Consumers were the driving force

15. But underpinned by borrowing

16. Consumers are not borrowing

17. But real earnings squeezed

18. A slower recovery than the last recession

19. c) Public sector spending cuts

20. So net debt (as a % of GDP) soared Sustainable Investment Rule March 2010 Budget

21. Govt receipts and spending (% of GDP)

22. Budget to be balanced in four years Surplus on current budget:

23. Debt burden to peak in three years time Public sector net debt:

24. d) Slow growth in key export markets

25. In the wrong places Share of UK exports (goods & services):

26. Euro Area growth forecast Euro Area Annual GDP growth:

27. Euro deficits add to the uncertainty Annual deficit as % of GDP: Tier 3 countriesTier 2 countries

28. SHORT-TERM OUTLOOK

29. Slow fragile growth Forecast

30. Inflation – above target Forecast Target Range

31. Taxes boosting inflation Target Range

32. Inflation – likely to ease Forecast Target Range

33. And interest rates to stay low for now Forecast

34. THANK YOU