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09 July 2003 Stockbroking firm Collins Stewart has issued a bleak assessment of the economic future for Jersey, suggesting that the island risks falling into a 'vicious downward spiral' of decline in the years ahead, according to a Jersey Evening Post report this week. |
The stockbroker argued that increasing pressures on costs from both outside the jurisdiction and from within, as the result of a depressed market place and increasing levels of regulation, are taking their toll on the island's economy, leading major institutions to scale down their operations- a situation that the firm believes will worsen.
This is a view hotly disputed by Policy and Resources president, Frank Walker who contends that the current economic climate is affecting the financial services industry globally and not just in Jersey. Mr Walker stated recently that overseas investors have "colossal confidence" in the island's financial sector, and argued that most of the pessimistic views are originating from inside Jersey itself rather than from elsewhere.
"Most job losses have resulted from decisions made at head offices in London, Frankfurt, New York and elsewhere. It is understandable that businesses will want to cut costs when there is a downturn but the Jersey industry is holding up well in comparison to other places," Senator Walker was quoted by the JEP as observing.
However, Collins Stewart points to other evidence, such as the island's worsening public finances. "This year's budget forecasts States expenditure rising at five per cent per annum while income only increases at two per cent per annum for the next three years," the firm stated in an article in the quarterly Channel Islands News and Views bulletin.
