Stuart Ayers introduced our guest speaker, Grant Spencer who has spent his career working in the financial markets and systems with ANZ and was the Deputy Governor of the Reserve Bank. Grant currently lectures at Victoria University.
Grant talked about the current financial market covering 3 main issues;
High inflation and the looming recession,
The easing of monetary policy as a result of Covid in 2020 were probably left to continue for too long, enabling the unprecedented house price increase. This needed to be addressed and this has seen interest rates increase from 2 % to 6.5 -7% in recent months. Grant described it as the recession we need to have to curb inflation and indicated it will occur mid to late 2023.
This will impact on people with too much debt,mortgages that purchased during the boom and will have loans coming off fixed rates.
The war in Ukraine and the effects of that on the global market.
First and foremost a humanitarian crisis but also will have a drag on the global economy, higher energy prices and disruptions to food supply. European economies working to reduce the reliance on energy, countries moving to self sufficiency.
Climate change and its economic effect.
All know that climate change is gradual but is happening. What is changing is Governments' intervention from fossil fuels to sustainable energy. Big effect on structure of industry, affecting volatility of share prices of utilities. Moving more and more towards green products.
Emergence of:
ESG- Environmentally friendly, Socially acceptable and increased Governance.
Any excellent and illuminating speaker. Grant's thoughts were well received by the Club and there were some interesting questions at the end.
Grant spoke clearly and knowledgeably on the current market and was a pleasure to have as our guest.
-