Gloomy headlines about Trump and Brexit may be giving advisers cause for concern about the future of the economy, but the future may not be as bleak as some predict.
Economist Sam Wilkin (pictured) told the New Model Adviser® Retreat that some signs pointed towards a move away from 'populism' politics that defined the US president's election campaign and the EU referendum result.
'If you want optimism here it is. There is a really cyclical element to populism. We have the recovery now and populism is still with us but it takes a long time for that economic crash impact to feed through to politics,' Wilkin said.
'In the near-term you could have a recovery away from populism because the economy is now recovering.’
Wilkin, who is senior adviser to research group Oxford Economics, said the next elections in the US and the UK would reveal whether the current political environment was a 'fundamentally cyclical phenomenon' or whether it would last for longer.
However, he warned 'further polarisation' could emerge in the US, particularly if Trump is impeach and moves towards ‘harder’ populist policies as a result.
'The risk from Trump is that the polarisation [within the electorate] leads to some kind of impeachment. Most populists, generally speaking, once they are elected try to follow a fairly centrist policy, aside from a lot of posturing.
'But when populists are under threat that is when they tend to go for the harder stuff,' he said.