GUERNSEY is in a much better position to deal with an economic slowdown in 2008 than the UK, according to local financial figures. The Financial Times’ annual survey of leading economists claims Britain is facing the most difficult economic conditions since the dotcom bubble burst in 2001 and 2002.

The survey said confidence had tumbled from a year ago and that the scope for financial authorities to mitigate any downturn was far more limited.

Others voiced concerns about whether public finances were in good order and if as a result there would be any leeway for discretionary tax cuts or increases in public expenditure.

But Guernsey International Business Association chairman Steve Le Page said the outlook for the island in the main was still positive and that he had not heard of anyone talking about a downturn despite the global credit squeeze.

‘Obviously Northern Rock and the local subsidiary has been impacted by it, but no one else has expressed concerns.’

Mr Le Page said the actions of the Bank of England in relation to interest rates could be to the island’s detriment but that was true for areas in the UK.

What might be good for the City of London might not be good for Birmingham.

But he is remaining upbeat.

‘If you look back over the last 30 years of Guernsey’s economy, where we have had better periods and slow periods, the economy has tended to do OK regardless of what is happening in the rest of the world.

‘When the UK was struggling in the early part of this decade because of the internet bubble, Guernsey slowed down but it didn’t stop and it wasn’t nearly as badly impacted as the UK was.

‘Most of the business in the financial sector is built on longer-term relationships so any change takes a few years to unwind what was started. There’s an insulation there.

‘Financial services globally are predicted to grow rapidly over the future and Guernsey should be able to get its fair share of that.’

Guernsey Investment Funds Association chairman Mike de Haaff said most forecasters had been predicting a slowdown and it was difficult to see how the island would not be affected.

But from his sector of the industry, he said the outlook was not all doom and gloom and it would survive any problems.

‘In this particular industry as long as there is the capacity to raise funds, then there will be managers designing products to take advantage of any situation.

‘Historically, Guernsey has managed to outride any downturns. The last one was probably just over four years ago and while we started to see some effects, they were only slight in both Guernsey and Jersey.

‘And to some extent it had some good aspects because it initiated some reorganisation of business and people became available on the job market.’

Giba deputy chairman and asset manager Dawnay Day Milroy managing director Paul Meader said Guernsey would not be immune to any slowdown in the global economy, but that it would be premature to paint a bleak picture.

‘Although Guernsey’s economy is very open and government lacks two of the main policy levers available in most territories, interest rates and the exchange rate, Guernsey is better placed than many economies to withstand an economic slowdown.

‘We saw headlines only a matter of days ago stating that there are 1,000 job vacancies in the financial services sector.

‘In addition, the main growth areas in Guernsey financial services should weather any short-term global slowdown. Guernsey’s other export sectors, such as fulfilment, may be more vulnerable to a UK consumer slowdown.

‘What this does highlight for me is the importance of Guernsey’s finance sector remaining competitive internationally. We must resist the siren voices that call for changes to the zero-10 tax regime when we are only a couple of days into it.’