Island ‘is facing spiral of decline’

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Recent events, say Collins Stewart Stockbrokers, have indicated that Jersey’s economy is in decline and likely to deteriorate further.But Policy and Resources president Senator Frank Walker disputes the gloomy forecast and argues that investors from outside the Island have ‘colossal confidence’ in the Jersey finance industry.

He said that the only ‘talking down’ he hears about the Jersey economy comes from within the Island and is not reflected by the views of overseas investors.Collins Stewart say that external and internal pressures are hitting the Island, including the downturn in the global economy.

And they believe this is leading to cost-cutting by financial institutions faced with the increased cost of regulation.Senator Walker does agree a worldwide downturn is hitting the financial services industry but says Jersey is not being affected in isolation.

‘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,’ he said.In an article compiled for the quarterly Channel Islands News and Views bulletin, Collins Stewart say: ‘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.’

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