Autumn

It's the job of the Chancellor to be bullish about the economy, especially in the run up to a general election, but problems for the UK still remain, according to Chief investment Officer Haig Bathgate.

The main issue is still in relation to our country's finances. Even while there's talk of the deficit halving since 2010, the fact that we still have a deficit at all means there's more debt being taken on every year. We still have a debt-to-gross-domestic-product ratio that's far too high and comparable to some countries in Europe that have been punished for their profligacy.

George Osborne is now predicting that the UK will end up in surplus by 2018/19, but those projections are dependent not only the health of our own economy, but also those of the countries where we trade. The Chancellor has rightly pointed out that Europe's economy remains moribund, and while the downward spiral on the continent seems to have slowed, we are still very dependent on fortunes across the channel. His intention of increasing trade with the emerging economies of Africa, Asia and Latin America assumes a level of economic activity in those regions that might not be achievable – in fact, we don't think the outlook for emerging regions is quite as rosy as some are predicting. And, while the chancellor has pointed out how inflation remains low, yet again the ability to manipulate that figure is mostly beyond the power of our government, having more to do with falling oil and commodity prices. In other words, it could reverse quite easily if external factors were to change.

As regards our domestic economic performance, the lower tax take than had been predicted shows again that things aren't quite back to the position they were prior to the financial crisis. While on the surface unemployment figures look good, we still have too many people in self-employment or in part-time work, meaning wage growth and productivity are both subdued. We are, as a nation, not yet earning enough to increase the tax take that would help us lower the budget deficit highlighted earlier.

In short, there's no doubt that the UK economy is healthy relative to some others, but that doesn't mean that everything is fantastic. We remain cautious about being overly positive on the UK's fortunes and prospects.

This content was generated prior to Turcan Connell Asset Management Limited operating as Tcam.