Looking East For New Optimism

Carl Richardson, Joint Managing Partner – Richardson Capital LLP
 
As we debate how best to boost economic growth into the UK, spare a thought for the Japanese who have been grappling with similar challenges for much, much longer.
For most of the last 30 years, Japan’s economy has been characterised by low growth and deflationary pressures. Despite the best efforts of successive governments, the economy has remained stubbornly stalled.
These “lost decades” contrast starkly with the “economic miracle” of the 1950s and 1960s that saw Japan recover from the devastation of the Second World War and lead the world in key manufacturing sectors, like cars and electronics. But there is cause for some optimism beyond the economic gloom in both countries, not least because of the blossoming trading relationship between the UK and Japan.
Since 2000, bilateral trade has continued to grow but has changed significantly in character. For the UK, what was a goods-based deficit has switched to a se...