Rosenfield was responding to a question from a delegate at the Senate who wanted to know how long it would take the UK economy to recover from the effects of the eurozone crisis.
He explained that UK recovery is more ‘stop’ than ‘start’ with weak sentiment inhibiting progress. However, he warned that weak economic forecasts and policy uncertainty could take its toll on the eurozone.
“There are downward revisions to GDP growth forecasts across the board, with the UK and eurozone in recession. Global earnings expectations remain uncertain and are weighing up the impact of macro policy responses versus weak, short-term demand.”
Rosenfield said that the main barriers preventing the eurozone from collapsing was the decisive response of policymakers, the European Central Bank, LTRO facility, low interest rates, quantitative easing and eurozone pledges of support.
Rosenfield said that if there was a disorderly break-up of the eurozone and no policy in place, the contagion would spread.
He said that compared to Portugal, Ireland, Italy, Germany and Spain, the UK and US are safe havens because they are “ahead of the curve” in terms of deleveraging and capital ratios.