German revival exposes deep fissure within Europe’s economies
In the 1990s and early 2000s, Germany was seen by many as the new ‘Sick Man of Europe’. Between 1991 and 2005, GDP growth averaged only 1.2 per cent a year, compared to 3.3 per cent in the UK. Since then, the German economy has revived dramatically. The recovery in the German cluster of economies […]
Psychology, not economics, is the key if we leave the EU
Poland is the only European country to avoid a recession during the financial crisis of 2007-2009. Polish GDP is 36 per cent higher than it was in 2005. To put this in context, the comparable figures for the UK and Germany are 5 and 12 respectively. The Polish economy has been a stunning success by […]
The recovery is well grounded – except in France
The coming year looks like it will be a good one. At the start of each of the past five years, the economic scales have been tilted down, and the challenge has been to look for factors which might have tipped them back up. This year, the balance is reversed. The onus lies with the […]
How Bad Has It Been? 2008-2013 in Historical Perspective
The end of a year is a good time to take stock. For the first time since 2007, prospects for the UK for the forthcoming year look unequivocally good. But looking back, just how bad have the last few years been across the developed world as a whole? And how do they compare with previous […]
Learn Maths, Young Person! The Secret of Success in the 21st Century
A currently fashionable pessimistic topic is the lifetime prospects of children born into the middle class. Graduate debt, lack of finance to buy homes and job insecurity after they graduate, the list goes on. Alan Milburn, the government’s ‘social mobility tsar’, put the seal of approval on this prevailing angst last month. His Social Mobility […]
Grangemouth highlights the competitive problems of the Rest of the UK
The recovery in the British economy is now firmly established. Output in the services sector, the largest part of the economy, is above the previous peak level prior to the crash in 2008. There is a widespread myth that the recovery is fueled by debt-financed personal spending. Yet since the trough of the recession in […]
Quis custodiet? Put the regulators on trial if they screw up
The Treasury’s amendments to the Banking Reform Bill mean that senior bankers could face up to seven years in jail for ‘reckless misconduct’ which leads to the collapse of a bank. Certainly, the behaviour of prominent individuals in the run up to the crisis left much to be desired. If only we could have put […]
Our economic recovery is real, but what we can still learn from the US?
Some people are never satisfied. The evidence is mounting that the UK economy is now on the path to recovery. But to those who denied the possibility of any economic revival at all under the policies of “austerity”, this is simply not good enough. It is the wrong kind of recovery, they say. Fuelled by […]
No interest rate changes for three years? Zero hours contracts for the Monetary Policy Committee!
The new Governor of the Bank of England, Mark Carney, said last week that interest rates will not be raised until unemployment falls below 7 per cent, a process he thinks will take three years. The battle of Austerlitz in 1805 was one of Napoleon’s greatest victories, leading to his complete domination of Continental Europe. […]
Recovery and summer are in the air, but doom mongers still lurk
The GDP growth figures announced last week for the second quarter of this year have sent most people away on their holidays in a cheerier mood than last year. The recent weather has certainly helped. But gloomy clouds may hover over the exclusive settings of Tuscan villas and beach houses in Martha’s Vineyard, where bien pensant commentators […]
No free lunch. Defaults today mean less jam tomorrow
Potential defaults in the Euro zone have been in the news again. In Portugal, the ruling coalition parties and the main opposition Socialists have been unable to agree on a European Union-led bailout plan after days of talks. Yields on the country’s 10 year bonds have approached 7 per cent, compared to the 1.5 per cent in […]
Ignore the IMF: There’s no reason for its ludicrous forecasts to change sentiment
The economics department of the International Monetary Fund (IMF) is up to its old tricks again – changing its mind. Just three months ago, the team cut its forecast for UK GDP growth in 2013 to 0.7 per cent from 1 per cent, sparking charges that George Osborne should alter his policies. Last week, the […]
Always Look on the Bright Side
The American economic recovery carries on apace, with a net rise in employment of almost half a million over the past three months. The Office for National Statistics has decided that the UK never had a double dip recession, and the texture of the economic news has turned positive. But economics is not called the […]
Banging up bankers is the wrong punishment – it won’t change behaviour
The behaviour of the banking sector in the run up to the crash is still very much in the public eye. But this is nothing new. Readers of a certain age may recall Bernie Cornfeld, and his company Investors Overseas Services (IOS). It failed dramatically in the 1970s after allegations of fraud. IOS encouraged the […]
The rapid rise of the food bank can’t just be blamed on government austerity
FOOD banks are a rapidly growing phenomenon in the UK. A few years ago, they barely existed, but an estimated half a million people now make use of them every week. On the face of it, it seems that poverty has sadly become endemic since the financial crisis, with many families unable even to feed […]
