1. Barry Naisbitt Economic Analysis Trends in the Economy 30 th September 2010, London United Kingdom

2. 2 2 GDP Growth (% q/q) Source – OECD Recession has been deep Output in the World’s major economies fell sharply in late 2008 and early 2009. The economies look to have emerged from recession by late 2009.

3. 3 3 Level of output by industries (Index 2006=100) Source – ONS Output performance has shown a mixed picture UK manufacturing output fell by 14.3% from its level in Q2’08 to the low point in Q3‘09. In contrast, total service sector output fell by 4.6% over the same period.

4. 4 4 Level of employment by industries (Index 2006=100) Source – ONS Employment has fallen Services employment fell by 2% from its level in Q2’08 to the low point in Q4‘09. In contrast, manufacturing employment fell by 10% over the same period.

5. 5 5 Unemployment Rate (%) Source – ONS, BLS Unemployment has risen as a consequence The unemployment rate in the US has risen more than rates in the UK or the Euro-zone. Unemployment in the UK reached 8.0% in March ‘10, its highest since October ’96.

6. 6 6 Fiscal Tightening Source – Budget June’10, ONS Government borrowing has risen sharply Public sector borrowing and debt have risen sharply but governments have announced plans to reduce borrowing by reducing spending and increasing taxation. Public Sector Net Borrowing (as % GDP) Public Sector Net Debt (as % GDP)

7. 7 7 World Exports ($Trillion) Source – WTO The global economy is now recovering World trade has picked up from its sharp fall and low point in Q1’09. However, it will take time to regain the previous peak in activity.

8. 8 8 Average earnings growth and inflation (%) Source – ONS Relatively high inflation is reducing real earnings growth Despite the recession, inflation has been running above its target. As average earnings growth has moderated, the higher inflation has squeezed real earnings growth.

9. 9 9 Consumers and businesses Consumer Confidence & Retail Sales Volume ( index & 3m/3m annual % change) and Business Investment Growth (level, £bn) Source – ONS, GfK Consumer confidence has recovered from its lows but recent readings have shown some softening. Business investment has steadied after a substantial fall in early 2009.

10. 10 Latest economic indicators The economic outlook is far from certain UK GDP grew very strongly in Q2 (+1.2% q/q), but this rapid pace will weaken. There is speculation about a possible ‘double dip’. Source – Financial Times, 2 nd September

11. 11 Recovery is expected to continue The new Office of Budget Responsibility (OBR) expects the economy to grow by 1.2% in 2010, 2.3% in 2011 and 2.8% in 2012. Source–Budget June’10 Budget GDP Forecast (% Annual change in GDP)

12. United Kingdom