A cautious New Year to you all!

We enter the New Year with a cautious tone running through many economic predictions. Figures released in the US last week showed a downturn in fortunes in the US. One thing that 2007 taught us was that changes in the economic conditions in faraway places can impact a lot closer to home; I’m sure we’re all more familiar with the US sub-prime mortgage market than we were this time last year.

Yet despite this cautious outlook, according to new research from Oxford Economics, people in the UK are now wealthier than their American counterparts for the first time since the 19th century. During the last 15 years, the UK has overtaken many of its competitors and now boasts a GDP per head of £23,500 per year. This, coupled with the much-heralded sixty quarters of uninterrupted economic growth, paints a far more positive picture.

Looking forward, though, our average GDP per head will only ever tell part of the story. The nature of an average is that some people will fall above that line and some people will fall below it. The way wealth is distributed in the UK is something that concerns some more than others, but reflecting on what has caused our economic growth over the last few years – and importantly the undesirable consequences that have materialised – will help us in the future. We’re not alone in having this debate now; Germany is currently reflecting on the impact strong economic performance has had on residents there.