We’re often told that the key to raising wages is to solve the ‘productivity puzzle’. Output per worker has stagnated since the financial crisis, leading economists to worry that the outlook for the economy is bleak. But a range of evidence across many countries suggests that the fall in productivity can be dated back to…
For UK workers the financial crisis has morphed into a real earnings crisis. OECD forecasts suggest that there will be very little respite in the next parliament. Over 2017 and 2018 UK real wages are expected to decline by -0.5%. Only Greece, Italy and Austria are set to fare worse. Real wage growth forecasts in…
Summary: It makes no sense to think about the deficit without thinking about the size and strength of the economy. A Newsnight report on the public finances last night was illustrated with a chart seemingly showing high spending causing the deficit. It was drawn from an IFS report issued yesterday, but it could well have…
The economy grew by 0.3% in the first quarter of 2017, down on 0.7% in the final quarter of 2017. More than 80% of the first quarter growth was driven by business services and finance. As the chart shows, the increased contribution here (in light grey) was not enough to offset the reduction from the…
Retail sales have seen their worst decline since 2010. But rising consumer credit figures suggest we’re not at the end of the consumer spending boom just yet. Retail sales volumes declined by -1.4% in the first quarter of 2017, the worse quarterly decline since the first quarter of 2010 (itself the worst quarterly decline on…
8 March 2017, Philip Hammond’s Budget Speech: And most importantly, Mr Deputy Speaker, despite higher-than-target inflation, real wages continue to rise in every year of the forecast. [my emphasis] 12 April 2017, only five weeks later, statistics from ONS Labour Market statistics release show: on the single month measure, real wages in decline by -0.4%,…
“I pledge you, I pledge myself, to a new deal for the American people” FDR accepting his nomination as presidential candidate, 2 July 1932 Every two years an International Trade Union Confederation delegation from across the world meets with officials and governors from the International Monetary Fund and World Bank, including Managing Director Christine Lagarde…
This post is brief background to a longer piece that views Roosevelt’s economics through his impact on Washington D.C. The economic statistics show his initiatives brought the US great depression to a decisive end; they also stabilised the deterioration in the public sector finances. Yet the efforts can be dismissed as trivial. A former Chair…
Today’s figures confirmed what we already knew: that economic growth in 2016 was entirely reliant on the consumer. We also know that workers are in the middle of an unprecedented decline in real wages (at least since Victorian times). So the inevitable result is lower saving and increased growth in consumer credit and other unsecured…
Whatever way you look at it, this week’s inflation figures illustrate the threat to living standards that result from the fall in sterling after the referendum. Headline inflation in February rose to 2.3%. Last week’s average earnings data for January (regular pay) was 2.3%. Real earnings growth is therefore zero. If as is likely inflation…