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"We're on the verge of some gigantic changes"

Steen Jakobsen.
Steen Jakobsen. / SUR
  • Steen Jakobsen | Chief Economist at SaxoBank

  • The regular guest host on CNBC and Bloomberg News speaks to SUR in English on the global economy and Brexit, among other issues, prior to his talk next week in Marbella

Much recent speculation has centred on the prospect of another global recession, a theme that economist Steen Jakobsen will be discussing at a talk during his visit to Marbella next week and afterwards over cocktails and canapes.

Speaking to SUR in English prior to his visit, the regular guest host on CNBC and Bloomberg News offered his view on the current outlook for the global economy: "I'm as optimistic as I've been in years," he said, adding, "because it can't get any worse!"

While global growth is slowing "dramatically", the default response is to continue cutting interest rates, he explained, even though historically low rates currently leave little room for manoeuvre.

"Monetary policy is dead," Jakobsen said, but policy-makers don't seem to have realised.

The Chief Economist at SaxoBank sees recession, as well as "riots and big swings to the left", as real causes for concern in 2020, but also believes "we are very close to some gigantic changes" which may be painful, but will wean us off over-reliance on monetary policy and move us towards the "return of the productive society, and all that that means".

As SUR reported recently, Andalusian producers are concerned by new tariffs introduced by Donald Trump. "There is good reason for them to be nervous, as they have been targeted," said Jakobsen.

Nevertheless, he believes the US President is beginning to realise the limited political usefulness of escalating trade wars, and thinks that Andalucía will likely have little to worry about in the long term.

On the subject of Brexit, Jakobsen agreed that the UK's exit from the EU can be seen as a sideshow overall on the global stage, but argues that we should not underestimate its importance, as it distracts Europe from its task of common policy-making in an "increasingly bipolar" US-China world economic system.

He said that he was confident, however, that a Brexit deal would be reached: "Europe without the UK doesn't make sense; neither does the UK without Europe," he added.

Steen Jakobsen will be talking at the Investment Academy, Marbella, on 24 October, at 3.30pm. Register online at www.binckbank.com/seminars or on Facebook