In a provocative piece this week (‘From Project Fear to Project Prosperity’), Professor Patrick Minford made a number of claims about the post-referendum economy. Apparently “the devaluation brought on by Brexit is acting as a powerful stimulus to the economy …”. Here’s how: … switching demand away from consumers to net exports and business investment,…
Have you ever had a ride in a light blue car? Have you ever stopped to think who’s the slave and who’s the master? Have you ever had trouble with your automobile? Have you ever had to push push push push? Car trouble oh yeah. – Adam Ant For those of a certain age, it…
Worries about excessive bank lending to households are (understandably) never far from the headlines, but there is too little concern about the very low levels of lending to firms. The point of departure is a speech by Alex Brazier of the Bank of England, who examined in some detail the household story. According to his…
With the economy showing increased signs of weakness, it is welcome that that the Monetary Policy Committee (MPC) voted today to keep interest rates on hold. More surprising perhaps has been the recent positioning of MPC members that has fostered speculation that a rate rise was more likely. At one level this is understandable. With…
“Nothing in economics is more potent than a simple idea whose time has come”, Gavyn Davies, October 21st 2012 The week before last, the Office for Budget Responsibility (OBR) published a new assessment of ‘fiscal risks’ to the UK. Reporting on threats to the public finances, they warned against new spending commitments: “… new unfunded…
Since the election, we’ve seen several proclamations of the ‘end of austerity’. As TUC post election poll (among others) has showed, there is now a clear majority in favour of ‘Maintaining decent public services even if that means my taxes go up’. This is a far cry from some of the rhetoric during the election…
Tackling the symptoms of the consumer credit boom without addressing the causes risks exacerbating the living standards crisis. Consumer credit was prominent in the yesterday’s assessment of financial stability by the Bank of England. Up front a chart shows the accelerating growth in various measures of credit (red yellow green) against slowing growth in nominal…
Philip Hammond has been out and about this week looking for praise for deficit reduction. At his Mansion House speech he claimed: “the deficit is down by three-quarters – and below 3% of GDP”. He tweeted the same line in response to Office for National Statistics figures yesterday (my highlighting): But “good progress” is very…
In today’s Economic Outlook the OECD show UK real wages falling by 1.1% in 2018, with nominal earnings growth of 1.5% outstripped by inflation of 2.7%. This is a big change of view on nominal earnings, which were previously expected to rise by 2.5% (in their March interim forecast). This revision must reflect earnings outcomes…
Today the OECD issue their twice yearly Economic Outlook, setting out their view of how the economy will develop, and how governments should respond. Their message for the UK government is clear: they need to invest. The headline on their economic commentary remains the weakening of GDP growth to 1.6% in 2017 and then to…