Sunday Times and Croissants - CEO's update 23rd October

There is something special about Sunday morning, the Sunday Times, hot croissants with honey and butter, excellent. Headlines, university entries are in record fall as prospect of fee hikes bite. A possible ten per cent drop in entrants across the board will challenge HEI business models significantly. Oh for the days when education was state funded as a key ingredient for economic growth and development.

David Smith, suggests we can learn lessons from the Irish in managing inflation and growth. Critical of monetary policy and the benign neglect of sterling, UK retail spending is exhausted, he explains, by price inflation exacerbated by low interest rates and QE.  On this, he is right. Unfortunately, with Irish unemployment almost twice the levels of UK, this is a comparison one would not wish to pursue with QE zealots and Adam Posen in particular.  More later.

Economics news this week, despite low growth, the borrowing figures suggest the deficit targets will be met this year. Just another five years of austerity and we can put the heating back on. The retail sales figures are out, volumes are flat but values are up by over 5%. No surprise as inflation CPI basis hits 5.2%. The headline rate is expected to peak in Q4 then fall rapidly in 2012 as the VAT increase and energy costs unwind.

Back to the day job, Monday, internal meetings in the morning, then out in the afternoon to look at property options should we decide to move next year.

Tuesday, Chris Melia and Rebecca Firth from Colliers, are in the office to discuss a research project. In the afternoon I record a piece for Radio 5, challenging the second round QE asset purchase programme. Sir Alan Budd is on air supporting the MPC move and challenging my views. Shock.

In the evening, it is the IOD - Bank of England dinner in Liverpool, the Governor delivers a keynote speech. I am a guest of the MPC but as QE sceptic, I am placed next to Adam Posen for assimilation into the QE collective. Posen has been calling for more asset purchases since October last year. He is a formidable character, an intellectual bulldozer when it comes to QE. I receive a one on one tutorial which develops into stern lecture, to disagree - to be dismissed as a Patrick Minford acolyte. Ouch! It is a great evening, I return home head spinning, I have been Posened but am unmoved!

Wednesday, I am before the Manchester City Council scrutiny committee (economy, employment and skills) together with Rob Pailin from RBS and Paul Breen from Business Finance Solutions. The discussion is about access to finance and funding for SMEs. An interesting exchange, Rob coping well with some light flak.

Thursday morning, Charlie Bean the deputy governor of the Bank of England is with us for breakfast at the Lowry hotel. Charlie is on the MPC, the FPC, the G7 and the G20 finance ministers group. He speaks well, giving his off the record views on the economy and QE. It is a good pro.manchester event, thanks to John Young and Simon Caunt for arranging this (and the seating plan on Tuesday!).

Later, Tom Glass from the e-word is in to hand over my new blog and web site. It looks really cool, we will make the switch next week.

Friday, a good session with Martin Turner, excellent macro economist at MBS. Together with Brian Sloan, Chief Economist at the Chamber of Commerce, we discuss the preliminary numbers for the pro.manchester Q4 Economics Review, out in two weeks. NIESR will also provide some forecast input into the Q4 review. Interesting.

Saturday, working in the morning, then off to play tennis with Mary in the afternoon. I lose 6-8. Mary has a new racquet, my strings are too old.

As an MPC twitcher, it has been a great week, the MPC have been out en masse in the North West, dinner with the Governor, an evening with Adam Posen and breakfast with Charlie Bean. Excellent.

Hope all is well with all, more news next week,
John
John Ashcroft
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Check out the pro.manchester blog post for regular updates, moving soon to a new site, johnashcroft.co.uk thanks to Tom Glass and the eword.