Andrew Bailey fell asleep on inflation and now it is workers who will face the flames
Is there a comfortable chaise longue in the office of Andrew Bailey, Governor of the Bank of England? I think we should be told. Because it has become apparent that the Bank has been asleep on the job. In the year to December 2021, consumer prices rose by 5.4 per cent. We have to go […]
State intervention can boost our economy but only the private sector can rebalance it
The government’s long awaited levelling up white paper was met with a lukewarm reception last week. One of the main complaints was that there was not enough – or in fact any – new money for the regions. Many localities have become stuck with low levels of productivity and, as a consequence, low levels of […]
Uncertainty from our leaders is keeping our economic recovery wavering on the brink
In November last year, the UK’s total GDP output finally regained its pre-pandemic level. But although the economic recovery is on an upward trajectory, there is a disconcerting stop-start hesitancy to it. A reasonable indicator of where the economy stands in any given month is the purchasing managers’ index which shows the prevailing direction of […]
Britons squeamish to spend their savings are jeopardising our economic recovery
The economic recovery is under threat. British consumers are saving and not spending. The Office for Budget Responsibility (OBR) estimates that during lockdown, households accumulated a massive £180bn of so-called “excess savings”. Earlier in the year, most economic forecasts assumed that these would be run down. Lockdown had constrained people’s normal behaviour and with the […]
In the end, the Swedes really did have the last laugh with a relaxed Covid approach
They never give up. The finger waggers who know what is good for the rest of us; the epidemiologists trying to intimidate us with their seemingly terrifying but actually rather trivial models of applied mathematics. The vested interests in the NHS creating excuses for the inefficiencies inherent in the system. If we already have restrictive […]
A service economy and shrinking workforce is the driving force of low economic growth
Extinction Rebellion’s fortnight of protests have only hardened existing beliefs and positions on both sides of the debate. But a book by Dietrich Vollrath of the University of Houston suggests that there may be much broader support for a low or even zero growth agenda than even XR might imagine. Vollrath does not address this […]
Labour shortages make light work of fears of a post-Brexit unemployment surge
In the two decades before the Brexit referendum, there was a large increase in the number of people moving from the EU to the UK. In the mid-1990s there were less than one million EU citizens living in the UK. By the mid-2010s, this had risen to 3.6 million. The bulk of the increase came […]
Rishi Sunak vs Boris Johnson: to spend or not to spend?
Rishi Sunak has directed his energy into recasting the Treasury back to its traditional role – the guardian of the public finances. The Chancellor notched up a substantial victory after education recovery tsar, Kevan Collins, resigned earlier this month, after his demand for £15 billion for catch-up programmes in schools was beaten down to a […]
Longer lockdown based on hypotheticals would come with serious economic costs
The penny is finally beginning to drop. The health service’s focus on giving absolute priority to the treatment of Covid-19 generates costs and problems on a massive scale. Chris Hopson, chief executive of NHS Providers, has warned of the huge pressures on the NHS from the backlog of non-Covid cases. Many of these are life-threatening […]
It’s time to give Scotland and Wales a dose of financial reality and rethink the Barnett formula
Subsidies continue to flow from the English taxpayer to the devolved nations of the UK. Boris Johnson is reportedly considering a further massive programme of infrastructure spending to convince the Scots of the benefits of being in the Union. The so-called Barnett formula, put together in the 1970s, already ensures that Scotland always gets more […]
Unemployment has stabilised but there will be economic pain ahead
There are high levels of business optimism. Survey after survey has told us this, from reports from Deloitte on large companies to evidence from the Federation of Small Businesses. Consumer savings are at an all-time high. People are itching to get out and spend the money they have been forced to accumulate. All in all, […]
Boris Johnson’s push for mass testing is set for failure before it even gets off the grounds
The campaign for regular, mass Covid testing has begun in earnest. From last Friday, everyone in England has been eligible to access lateral flow tests for free. The government would like people to test themselves twice a week. Under the slogan “Hands, Face, Space, Fresh Air”, the public is being urged to use the NHS […]
Government scientists must be transparent about flawed Covid models
The strength of the economic recovery as Britain emerges from lockdown is a hotly contested subject among economists. Some believe there will be a massive surge in demand as consumers celebrate their freedom, others argue it will take time to claw back confidence. Economic forecasts are subject to the same faults as any projections, as […]
The Great Frost of Covid-19 will pass – and Britain’s economy will heat up
The Great Frost of 1709 has been in the news this week, quite possibly for the first time since 1709 itself. According to Bank of England estimates, this was the last time that GDP fell by more in a single year than it did in the Covid year we have just had. The Office for […]
Burnley and Asda are unlikely warnings of debt-driven troubles
It has been a week of mixed messages. Not just on the release from lockdown, but on the economy. The Bank of England indicated that banks have been given six months to prepare for negative interest rates. The Monetary Policy Committee was quick to clarify that this did not mean that they would necessarily cut […]
