Spring Statement: Reeves should abolish the OBR
By strengthening the OBR, Reeves has created severe difficulties for herself. Vital decisions about our economic future should be made by politicians, not unelected quangocrats, says Paul Ormerod Later today we will know for certain what is in Rachel Reeves’ Spring statement, a budget to all intents and purposes. But as is usually the case […]
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 […]
It’s time to go back to basics and go about fixing our deficit before more tax cuts
As inflation pushes prices further and further up, food has been getting more expensive for some time. But, as the cliche goes, there was never such a thing as a free lunch. This idea, well known among economists, means prosperity depends upon making the effort to raise productivity. These are concepts which Western electorates are […]
Celebrating Germany’s recession dodge? The data isn’t quite as solid as you think
Ardent Remainers had a rare bit of good news at the end of last week. The latest statistics for the German economy showed that, contrary to expectations, it had not fallen into recession in the July-September period. Economists have come to define a recession as a period when a country’s GDP falls for two quarters […]
The chancellor should heed Keynes – and keep public spending down
Last week’s Spring Statement by chancellor Philip Hammond has led to predictable calls to “abandon austerity”. With massive hyperbole, Labour accused him of “astounding complacency” in the face of what they claimed to be the worst ever public funding crisis. The facts are rather different. Far from being squeezed, after allowing for inflation, current spending […]
Let’s join the IFS in acknowledging our misplaced fetishisation of economic data
Tomorrow, the Office for National Statistics (ONS) will publish its latest estimates on how much the UK economy grew between October and December 2017, compared to July to September. Last month, the ONS thought that there was an increase of 0.5 per cent. The economy cannot be put in a set of scales and measured. […]
It is the private sector, not the state, that has enabled America’s economic recovery
The American economy continues to power ahead. The widely respected and independent Congressional Budget Office (CBO) reckons that the actual level of GDP in the US in 2017 is finally back at the level of potential output. The potential level of GDP is the amount of output which would be produced if there were no […]
The OBR’s forecasts should be taken not just with a pinch of salt, but with the contents of an entire mine
There has been a great deal of crowing in metropolitan liberal circles over the report of the Office for Budget Responsibility (OBR), published with the Budget last week. The OBR revised downwards its projections for GDP growth for each of the next five years. Annual average growth to 2022 is predicted to be just 1.4 […]
There’s a difference between priceless and worthless, but economics can’t measure it
The so-called “productivity puzzle” just does not go away. The October, employment figures released by the Office for National Statistics (ONS) brings it into focus. The number of people in work rose to a new record high of 32.1m, with an increase of around one per cent compared to a year ago. Total output, measured […]
It’s time to question the macroeconomic orthodoxy on interest rates and inflation
Mark Carney, governor of the Bank of England, is getting his retaliation in early. Faced yet again with the Bank failing to deliver its designated target of a two per cent inflation rate, in a speech last week he suggested that his remit was broader. “We face a tradeoff between having inflation above target and […]
