The Public Trust Partnership

When will the UK economy start to recover ?

The economy is on its knees. This is not a BBC Peston doom and gloom statement but a fact. Companies are looking to shed staff and the public sector cannot sustain public expenditure therefore job losses are in the air. Friends of mine are losing jobs.Good people with families.

Banks are still not lending.The property market is not receiving confidence from the banks and building societies. Banks are themselves shedding staff and are sitting on fences-doing nothing.

The crisis will end with a dose of inflation and when property/home prices in the UK stabilise.Same is true for the USA who started all of this. Such prices largely determine the amount of equity in homes/commercial property - the ultimate collateral is key.

Inflation will be the next phase -  with no confidence in the market it just takes over like poison.

House and property prices are currently being suppressed by a large overhang of vacant properties for sale .Some are not even on the market. The thought to sell at a price is there. But at what price?

In the UK the 12 month sharp drop in house completions, is a major issue. What is the solution? Banks/Building societies need to lend at 90% of values again.This needs to be sorted out. If so prices could start to equal out in the next several months.

But what will probably happen is a good dose of inflation after the UK election in May 2010.

Inflation is a special concern over the 12-15 months given the pending amount of government debt about to be launched on world financial markets.

The  2010 UK Election will hold back confidence in the financial markets.Politicians will be blamed.Currently most are hiding issues for the sake of votes. Politicans from all parties cannot hide forever.The more courageous will succeed in 2010.The public know what is right.

It will be start time again for "better" organisations who will need to draw up new business plans.

The public sector workers will strike in 2010 after shedding thousands of jobs.Strike because pay will not keep up with inflation.Unions will be angry.

In the private sector the banks will continue to merge and business will seek mergers and acquisitions to keep active. This is not wealth creation.

The future is in the digi age and with technical communication corporations who will build networks to get us out of the mess.We will be out of it in 2012 - if the problems are shared and not hidden.

For the best chance of economic growth we must continue to back smart and talented companies who know how to plan and for private market forces to allocate capital and other resources to them.No Option.

Imagining India - Ideas for the New Century

Imagining India - Ideas for the New Century By Nandan Nilekani

A handful of Indian companies have taken their businesses global. Some have done it quickly, in a flash of entrepreneurial brilliance and technological advance; others have built strength over generations through family-owned businesses.

The tier of global companies includes ArcelorMittal, the steelmaker, Mahindra & Mahindra, the tractor maker, Bharat Forge, the foundry business, and Tata Group, the industrial conglomerate.Such issues are  outlined in Nilekani's Imagining India , an expansive new book that makes a sweeping examination of India's challenges past and present.

Nandan Nilekani is co-chairman of Infosys. I like him. He is a family man. He is a thinker . A figure to listen to and his book has much to commend it to Europeans.

Recently he gave advice to Europe because Europe needs to embrace either immigration or outsourcing to overcome the huge challenges of its ageing population – and it is currently doing neither, according to one of Asia’s leading businessmen.

Nandan Nilekani of Infosys, the Indian outsourcing company, said that Europe was currently ducking the ways of solving its demographic problem, perhaps its main long-term test.

“Europe has a very difficult quandary: when you have an ageing population, either you import your workers or you export your work. It is immigration or outsourcing. If you do neither, you have a challenge,” he recently told the Financial Times.

The comments by Mr Nilekani, the inspiration behind “The World Is Flat” book title used by Thomas Friedman, play into a rising fear in Europe about the implications of its ageing population.Mr Nilekani underlines the growing confidence of Asian companies to speak about issues outside their borders. Very Nehruvian, the First Indian Prime Minister, who is a personal hero of mine.

A report  by the European Commission showed how the continent’s working-age population would peak next year before starting a decline that would have big budgetary and economic impacts.

By 2060 the ratio of working people to those aged over 65 will be two to one, against four to one currently.