UK: Deloitte Monday Briefing: The Not So Global Recession

Last Updated: 21 July 2014
Article by Ian Stewart

Most Read Contributor in UK, August 2017

A personal take on economics from Ian Stewart, Deloitte's Chief Economist in the UK.

  • Like most economists we describe the financial chaos of 2008-09 as the Global Financial Crisis. The financial crisis was truly global, but we estimate that about 80% of the world's population escaped the ensuing recession.
  • The rich countries of the US, Japan and most European countries fell into recession. Most emerging market economies saw only a brief slowdown in growth in 2009. While growth rates in the last six years in the rich world have been miserable, growth in emerging economies has been running above its trend rate.
  • This year the International Monetary Fund (IMF) expects the global economy to grow by 3.6%, up from 3.0% last year, with activity expected to accelerate in 2015. This average hides widely varying prospects around the world.
  • Better prospects for Europe and the US means that global growth is rather less dependent on emerging markets than in recent years.
  • Nonetheless, the IMF expects emerging market economies, in aggregate, to grow at twice the rate of developed economies over the next 5 years – an even faster rate than before the crisis.
  • Sentiment about emerging economies has, however, taken a knock in the last year. Weaker commodity prices, geopolitics, structural weakness and the prospect of higher US interest rates have played a part in downgrades to Chinese, Brazilian, Russian and Indian growth forecasts for next year.
  • The term "emerging economies" lumps together a group of disparate nations. Russia, which is bracketed with China and India under the BRICs acronym, is forecast by the IMF to grow more slowly than the US or the UK over the next five years. The IMF expects Brazil, another BRIC member, to grow only slightly faster than the US.
  • Neighbouring countries often have quite different growth prospects. Argentina's growth rate over the next five years is forecast to be one third of neighbouring Bolivia and Paraguay and about the same as Germany's.
  • The world's growth hotspot, as it has been in the last 30 years, is expected to be developing Asia – including China, India, Malaysia, Philippines, Thailand, Vietnam and Cambodia.
  • With growth forecast to average 7.0% over each of the next five years China should easily retain its crown as the world's fastest growing major economy. But, in an important development, China's trend growth rate is slowing. A 7.0% growth rate compares with an average of 10.2% seen over the last 32 years.
  • Confidence about the economies of sub-Saharan Africa has grown in recent years. These economies are expected to grow well above their pre-crisis trend rates although South Africa, long Africa's dominant and most developed economy, is expected to post one of the lowest rates of growth on the Continent.
  • The financial crisis has cast an especially long shadow over the euro area. The IMF expects the big three of Germany, France and Italy to grow, on average, by 1.4% a year over the next five years, half the rate of the US. Much slower post crisis rates of growth in Spain, Portugal and Ireland will add as a further drag on overall growth in the region.
  • Over the next five years the IMF expects the world's slowest growing economies to be Japan and a cluster of mainly European nations. The fastest growing economies are in Africa and Asia, some of them, like Libya, South Sudan and Iraq, with a recent war torn past.
  • High growth tends to come with risks. The IMF notes that fastest growing countries are at the greatest risk of suffering from shocks, such as deflation, geo-political tensions, slowdowns in major emerging economies and the failure of structural reform.
  • On this basis the US economy, with growth forecast to average 2.9% in the next five years, looks relatively attractive. Its long term growth rate has not been significantly dented by the financial crisis. Indeed, a 2.9% growth rate puts it in the same league as a number of emerging economies, including Brazil, South Africa, Turkey and Argentina - and well above Russia.
  • The IMF expects the UK to post growth of 2.5% over the next five years – a slower rate than before the crisis, but enough to put the UK towards the top of the European growth league table with the likes of Sweden.
  • The global economy is recovering. Yet such generalisations conceal widely varying prospects across economies. The world economy may be more integrated than ever, but country-specific factors continue to be a dominant influence on economic performance.


UK's FTSE 100 ended the week up 1.4%.

Here are some recent news stories that caught our eye as reflecting key economic themes:


  • Japanese machine orders fell by 19.5% in May, their largest monthly fall in almost 3 decades of available data
  • Data from a REC/KPMG report on jobs showed the highest monthly reading for salary rises since the survey launched 1997; with 38% of companies in June having to increase pay to hire new staff
  • The British Chambers of Commerce warned the Bank of England against "any hasty decisions on raising interest rates in the very short-term"
  • British retailers saw a 1.8% monthly fall in prices in June, the biggest annual fall in prices since at least 2006 according to data from the British Retail Consortium (BRC)
  • The proportion of shares earmarked for short-selling by hedge funds is now at its lowest level since the financial crisis, despite warnings of renewed market exuberance
  • Luxury carmaker Rolls-Royce reported record sales in the first half of the year, with Asia Pacific sales up nearly 40% in the 12 months to June
  • The so-called 'magic circle' of elite law firms with headquarters in London and a large international client base, reported record revenue growth for 2013-14, benefitting in part from the return of high-value M&A deals
  • Thousands of accounts at the Vatican bank have been shut down – with total assets of around €200m – after investigators discovered that they did not have the right to bank with the Holy See
  • The Financial Conduct Authority said that five times as many businesses are currently applying for banking licences as were granted them last year, following the relaxation of financial requirements for small banks
  • Senegal is planning its return to international debt markets, likely launching a bond next week after the Ivory Coast does the same
  • A Chinese state media broadcaster warned about the ability of Apple's iPhone's to track users, quoting a researcher who claimed this "sensitive" data could even reveal "state secrets"
  • Popular TV series Game of Thrones is to film part of its next series in unemployment-hit Spain, where more than 10,000 Spaniards have applied to work as extras in the show
  • The boss of Airbus's passenger jet business urged the European Central Bank (ECB) to tackle the "crazy" strength of the euro
  • WiFi provider Let's Gowex was forced to declare bankruptcy and leave the Madrid stock market after its chief executive admitted to falsifying the company's accounts
  • The Guardian reports that a post-Scottish independence 'suspense thriller' called White Settlers is to premier this autumn, in which a relocated English couple get terrorised by their new Scottish neighbours
  • Under Mark Carney's new regime, the Bank of England is replacing its annual summer cricket match with the less "exclusive" sports of rounders and football – that's not cricket

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.