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Stefano Silvestrin of Nationwide

Economist delivers upbeat message on the economy

A snapshot of the local and national economy was given to Swindon Business leaders by a senior economist from Swindon-based Nationwide on Friday.

Stefano Silvestrin was the guest speaker at Friday’s meeting of Swindon Chamber of Commerce, returning to the forum a year after he had made his first set of predictions.

In January 2014 he had told networkers that the economy would grow by between 2.5 percent and 2.7 percent – and it turned out the prediction was on the nail.

“2014 has been a very good year for the economy – we’ve averaged about 0.6 to 0.7 percent growth per quarter, which is higher than most of our European neighbours. Year on year growth is around 2.5 percent,”
he said.

“Businesses are now more profitable than they were in 2008, and there are fewer businesses struggling.”

“The local economy has benefited from the rebound. South West unemployment is at 4.7 percent, one percent below the national average, and Swindon has a very high rate of people working or in employment.”

Mr Silvestrin warned that there were still risks to the economy, posed by unbalanced growth led by consumer spending rather than business investment.

The imbalance in trade needs to be addressed, as do the high levels of household debt, he said.

But generally there are plenty of reasons to be optimistic: unemployment stands at 5.8 percent, down from eight percent in 2013, and wages now increasing above level on inflation.

Monetary policy remains supportive. Even if interest rates do increase, it will be gradual. And sterling is very competitive.

The falling oil prices also gave Swindon business owners reasons to be cheerful.

“Oil price is major driver in the fall in inflation,” said Mr Silvestrin. “Sectors that benefit most include agriculture, manufacturing, which accounts for 17 percent of the local economy, and transportation , which is more than 20 percent.”

Offering his outlook for 2015, he said: “Growth should remain strong over the next couple of years, with 2.5 percent to three percent growth in 2015/16 and maybe 2017 too.”