Economist offers a glimmer of hope to business leaders

Former Bank of England agent Kevin Butler this evening gave business leaders a glimmer of hope when he addressed an audience at Exeter Golf and Country Club.

Mr Butler, who is now a consultant economist, said he believed there was some good news on the horizon.

However, he claimed we "we're still some way off" and there would be a "muddling through process" before the economy begins to pick up.

Mr Butler said that one positive that could be drawn from the past 12 months was private sector employment growth, although this was proving to be a "long and traumatic process".

However, productivity has been falling, possibly as a result of the reluctance of the banks to lend and the inability for businesses to invest.

Mr Butler said food and fuel prices would continue to drive inflation and that fit would remain above the target two per cent for longer than expected.

In reference to tomorrow's budget, Mr Butler said there would be shift from revenue to capital expenditure with a focus more on output.