If politicians keep ignoring economists, our strategies will never be cost-effective
Economists have been getting bad press because of the antics of the Bank of England and its Monetary Policy Committee. We are suffering from what we, as economists, describe as a “negative externality”. It might be convenient for you to drive your car, for example, but the emissions which this creates have a negative impact […]
Sunak should be modelling his fiscal rules on Clem Attlee’s, not Margaret Thatcher’s
Normally, reading economic statistics is, for almost everybody, a sure-fire way of curing insomnia. Not anymore. The Office for National Statistics came out with yet another attention-grabber last week. Government debt in the UK, the august body pronounced, is now bigger than GDP for the first time in over 60 years. The statisticians did qualify […]
The Bank of England risked our economy by believing a Peter Pan myth on inflation
The Bank of England has finally accepted that it needs to react to the growing criticism of its failure to either predict or control the persistently high rate of inflation. In response to demands from the Treasury Committee of the House of Commons, the Bank has decided to commission a broad external review of its […]
Our approach to energy prices shows we want climate policies only if they’re free
The energy sector continues to grab the headlines. The government has announced the windfall tax on oil and gas companies will be scrapped if prices fall to more normal levels for a sustained period. Cue predictable outrage from the likes of the Green party, who said the government should be “tightening the tax and ensuring […]
It’s time the Bank of England rethinks monetary policy – and its own methods
The Bank of England’s handling of inflation has been met with increasing levels of criticism. Despite its suite of academically fashionable mathematical and econometric models, the Bank seems to be acting in a daze, unable to comprehend what is going on. A paper just published in the American Economic Review advocates an alternative way of […]
Confusion is the keyword for UK bonds as financial markets’ confidence fades
The yields on British government bonds have drifted upwards again. As many commentators have pointed out, we are back at the levels experienced during the short-lived premiership of Liz Truss. An obvious culprit is government debt, now at around 100 per cent of GDP in the UK. This in itself can create anxiety in the […]
Windfall taxes, like speeding fines, can’t be a plaster solution for losing tax revenue
The flashing yellow boxes in the roads of Hammersmith and Fulham have become notorious. On Talgarth Road, a single one alone yields over £3m in fines to the local council. For motorists, the situation nationwide is about to become even worse. Nearly 30 local authorities have put forward proposals to enforce 111 boxes, under legislation […]
Artificial intelligence won’t destroy your job, just look at Octopus Energy’s use of AI
There is growing concern about the potential power of AI to develop itself and to dominate humanity. Elon Musk was the best known of the thousands of signatories of an open letter last month calling for a pause in artificial intelligence research, but at the same time that he was issuing the warnings, Musk announced […]
Starmer is right, we need to give up on the cult of a university education for all
Labour leader Keir Starmer came under fire for his recent reverse ferret on abolishing university tuition fees. Some see it as an inability to stick to a pledge, while others view it as a further betrayal of the policies of Jeremy Corbyn. From an egalitarian perspective, Starmer’s decision is absolutely correct. Abolishing fees would cost over […]
The Bank of England needs trade unionists and social scientists to stop groupthink
The Bank of England’s persistent failure to meet its inflation target over a long period of time is a matter of public record; the huge increase in inflation over the past 18 months or so is simply the most spectacular of the Bank’s errors. Every single member of the Monetary Policy Committee (MPC), both those […]
