Every year or two, the macro structuring team at Royal Bank of Scotland (RBS) briefs clients on the expected themes over the medium term. In 2007, recession was on the cards. In 2009, it was clear that recession could prove persistent after the severe financial dislocation.
But for 2011, says Huy Nguyen Trieu, head of macro structuring at RBS, the theme is one of uncertainty. Commodity prices and gross domestic product (GDP) growth are both picking up. Yet core inflation is still low, and the sovereign debt crises of 2010 served as a warning that external or financial market shocks could still derail the recovery.
