Seventy two per cent of stock market trading is done by hedge funds, high-frequency traders or investment banks trading on their own account. Perhaps the most shocking statistic is that the UK languishes 159th out of 174 countries in the international league table for investment.
I can’t actually think of any way that the UK can be 159 th on a list of investment. The idea that the world’s 7 th largest economy (or whatever it is, 10th maybe, 5th? ) has less investment than the 100th is simply absurd.
So what has Hutton (or has Kampfner misunderstood him?) cooked up to get to this?
Do note one thing though. If he’s saying something like “investment as a percentage of GDP2 or something, then that’s a good result. It means we’re generating a high income off lower amounts of investment. That is, we’re being more efficient in our investing.
Someone called Worstall wrote about it here:
http://www.adamsmith.org/blog/economics/it-must-be-difficult-being-willy-hutton/
🙂
Aha! What is politely called a “senior moment” for me there then. Or a brain fart.
Hutton’s number might come from here – tho a respectable publication would link:
http://www.economywatch.com/economic-statistics/economic-indicators/Investment_Percentage_of_GDP/
ONS data for the UK are slightly different, showing an investment share of 16.5%
I’m not sure you’re right to say that a low ratio shows our investment is highly productive: our high GDP reflects past investment, not (just) present investment.
Yes there are lots of explanations for a low investment to GDP ratio, not all of them favourable. However a stylized fact, as they say, is that rich economies should have lower ratios, not being in the capital accumulation phase