Yorkshire playing its part in cheering up the nation

Ben Gutteridge, the head of fund research at Brewin Dolphin, said that Yorkshire’s manufacturers and financial services firms were doing their bit to help re-balance Britain’s economy.

He made the comments after a Brewin Dolphin seminar which attracted around 60 business leaders to Aspire in Leeds.

The event, which had the title ‘Reasons to be cheerful’ also included a speech about the arrival of the Tour de France in Yorkshire next year, which was delivered by Peter Dodd, the commercial director of Welcome to York- shire.

Mr Gutteridge said: “While I do think financial services in London are particularly well-placed to benefit from the global upturn, I think that it is spreading out and Yorkshire’s contribution from financial services and manufacturing is helping the UK recovery to become more sustainable, rather than just being a housing market story.

“It’s helping with that re-balancing goal that (Chancellor of the Exchequer) George Osborne and (Prime Minister) David Cameron want to achieve. The Yorkshire economy, like many regions of the UK, is still benefiting from the accommodating monetary policy which is in place.

“That will help underpin a strengthening housing market and that will put more money in the pockets of Yorkshire consumers.”

The boss of state-backed lender Lloyds recently warned that the Government’s Help to Buy scheme risks creating a dangerous house price bubble unless it is matched with more housebuilding.

In the latest warning over the scheme, Antonio Horta-Osorio called for relaxed planning and building rules and more social housing projects so that rising mortgage approvals do not drive up house prices.

Mr Gutteridge said yesterday: “There’s a lot of concern the housing market may trigger early interest rate hikes while the economy is still in a nascent (early stage) recovery.

“Our hope is that the clash of Help to Buy with the Bank of England’s own macro-prudential tools will allow the central bank to leave interest rates at a lower level for longer.

“Perhaps the Bank of England will ask banks to park more capital to one side, if they’re doing too much mortgage activity, to make sure the housing market doesn’t spur any unnecessary early tightening of interest rates.”

During his presentation, Mr Gutteridge said that one possible “fly in the ointment” was the threat that the US could make a policy mistake and tighten interest rates too early.

After his presentation, he said: “If job numbers do start coming through and unemployment falls fast, and the US tightens, that could spell a troubled period for markets in the US and UK.

“As it is, we’re of the view that as jobs start coming through, the disenfranchised population will return to the labour force and start seeking work.

“Unemployment should stay pretty sticky which means the US doesn’t necessarily have to tighten rates particularly aggressively.”

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