Investment can boost growth – if it comes with technological progress
The need to boost the UK’s rate of economic growth was a central theme of the first budget delivered by Rachel Reeves, the Chancellor. Reeves emphasised the importance of increasing the amount of investment which takes place in the UK. She sees this as the key way to raise growth. To this end, she announced […]
The threat of higher taxes is already harming growth
The Chancellor, Rachel Reeves, had made no secret of her desire to make economic growth her top policy objective. She reinforced the message this week in an interview with the Financial Times, using the mantra “invest, invest, invest!”. Perhaps unwittingly, this carries echoes of Karl Mark’s memorable phrase in Das Kapital: “Accumulate, accumulate. That is Moses and the […]
A lesson from King Canute for the EV transition: You can’t force hype
The total victory of the electric car is in sight. For the first time ever, the total number of all-electric cars on the road has recently exceeded those of petrol. Just this August, a massive 94.3 per cent of all new car sales were all-electric. This means that we will hit our target – all new car sales […]
Haldane is right – the Chancellor’s doom-mongering is dangerous
The Chancellor, Rachel Reeves, often mentions her experience as an economist at the Bank of England. But she has been taken to task by no less a figure than the former chief economist of the Bank, Andy Haldane. Haldane notes that “just after the election, there was a sense of refresh, a sense of renewal, a […]
Start-ups and spin-outs: The secret ingredients to growth
Going into the election tomorrow, the two main parties agree on a crucial issue. Economic growth is needed to achieve their respective economic and social aspirations. Despite widespread perceptions to the contrary, in the decade of the 2010s the UK’s growth record was quite reasonable. The average annual rate of GDP growth was two per cent, even […]
Keir Starmer could be more like Harold Wilson than Tony Blair
Labour’s massive lead in the opinion polls is generating many parallels with the 1997 election. Will Keir Starmer end up with a bigger majority than Tony Blair or not? But the comparison with 1997 more or less starts and finishes with the polls. Most other things are completely different. In the late 1990s, capitalism appeared […]
Interest rates aren’t as influential as you think
Criticising the Bank of England has become fashionable in City circles. From persisting too long with quantitative easing, to completely missing the upsurge in inflation to the condescending group think displayed on the validity of its discredited New Keynesian models, the Bank under Andrew Bailey has done plenty to make itself fair game. But when […]
Ricardian Equivalence and why Britain’s really in a recession
News that we have entered a technical recession will come as no surprise to anyone who has even a passing acquaintance with the British economy. But what is less well understood is how personal spending – or rather the lack of it – is contributing to low growth. Household incomes have been squeezed by rises in energy […]
Seven years on, we need to finally stop blaming Brexit – just look at the numbers
Two quite contradictory messages have been given about Brexit over the past few days or so. First, Makoto Uchida, the chief executive of Nissan, a company originally very critical about the UK’s exit from the EU, pronounced that the impact of Brexit on its UK operations is now negligible. He urged the country to be […]
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 […]
Our ailing productivity is workers’ payback to the greed of bankers after the 2008 crash
The self-destruct mission led by the SNP has helped the Labour party to be seen as firm favourites to win the next election, quite a turn around from their 2019 fate. But were he in government, he would be grappling with exactly the same issue Rishi Sunak is now. Namely, how to raise the rate […]
This Christmas, let’s all reconsider how we think about innovation, jobs and wages
There is still time to have a last minute Christmas present delivered. No, of course not by Royal Mail; but one of its enthusiastic competitors will do the job. Given the impact which technology in general and the internet in particular has had on postal service, it is hard to imagine a more pointless strike […]
If we concede to the unions, Britain will find itself in a dizzying wage-price spiral
A wage price spiral. We have not experienced one for so long that for most people the phrase might just as well be written in the Old English of a thousand years ago. It is, well, sort of comprehensible but only just. But such spirals can take hold with terrifying swiftness. Towards the end of […]
If you can build a football team, you can advance the fortunes of poor nations
In Qatar, there has been a storm over its treatment of women, the LGBT community, and other minorities. But it has also, in another way, been the most egalitarian World Cup. What used to be called “upsets”, with notionally weaker teams beating their alleged superiors have almost become the norm. So, Cameroon beat Brazil, Tunisia […]
Everyone wants a pay rise, but we will have to pay with cuts to jobs or services
The nation seems to be in the grip of an epidemic of cognitive dissonance. Where is Matt Hancock when we really need him to impose a lockdown and save us from this menace? Two major events have put huge strain on the public finances. The pandemic led to government borrowing of some £400bn, around 20 […]
