In such volatile times, the safest assets aren’t necessarily what investors think
Given the climate of intense uncertainty, the FTSE index remains remarkably resilient. It currently sits almost bang in the middle of the 7,000-7,600 range, where it has been since the beginning of January 2017. Brexit does not seem to trouble share prices. Nor do the threats by John McDonnell, Labour’s shadow chancellor, to carry out […]
Why the economics profession remains blind to the benefits of Brexit
The office for National Statistics last week estimated that the UK economy grew at an annual rate of 2.4 per cent in the final quarter of last year. This is slightly above the long-term average growth of the past three decades. But a Financial Times survey this month showed that the majority of economists remain […]
Why do bad companies stay in business for so long? Just ask an economist
A bookseller in the Yorkshire Dales has hit the headlines, branded a “shopkeeper from hell”. He called a customer a “pain in the arse”, and has been the subject of numerous complaints to the local parish council about his rudeness. To complete the outrage, he charges 50p as an entry fee to his shop. The […]
The death of cash, the rise of trade unions and other eclectic 2017 predictions
It’s certainly been an eventful year. But rather than dwell on the past, what sort of things can we expect in 2017? Here are a few eclectic predictions. Sweden may become the world’s first cashless economy. Notes and coins are already fast disappearing as a means of payment, and retailers are legally entitled to refuse to accept […]
Forward guidance is just another delusion foisted on us by mainstream macro
The governor of the Bank of England, Mark Carney, was on good form last week when he appeared at the Treasury Committee of the House of Commons. Asked what “forward guidance” meant, he answered smoothly: “The thing about forward guidance is that it is guidance that is forward. Which is not to say it is meant to […]
From the NHS to Brexit, give people a choice and they’ll make a good one
A current headache for the government is the performance of the NHS, and whether it is running out of money. This was making the front pages until the judges’ decision on Brexit pushed it off. Successive governments have discovered that the finances of the health service are a potentially bottomless pit. A key policy issue […]
The people of Burnley and Bradford have a point about the impact of immigration
The scenes as the migrant camp was cleared in Calais once again provoked bitter divisions in British society. Metropolitan luvvies and liberals tweeted their virtue and called for no restrictions on immigration. In more traditional areas, there is active resentment at the possibility of even further inflows of foreigners. When New Labour decided in the […]
America is embracing the opportunities of AI while the rest of the world frets
The rise of artificial intelligence (AI) continues to generate concerns. The latest furore emerged at the start of this week. Researchers in the top ranked University College London computer science department claimed that an AI algorithm correctly predicts the outcome of 79 per cent of cases heard at the European Court of Human Rights. The […]
Thank competition – not magical central bankers – for years of low inflation
Tempers are fraying at the highest levels of economic policy-making in the UK. Theresa May, at the Conservative Party conference, emphasised the “bad side effects” for savers of the Bank of England’s policy of near-zero interest rates, a position reinforced by former Tory leader William Hague in the Telegraph this week. A few days ago, […]
Look to Twitter for why Britain’s economy proved Project Fear wrong
The economic data on post-Brexit Britain is beginning to emerge. We discovered last month that employment in May to July grew by 174,000 compared to the previous three months. Last week, the Office for National Statistics published its estimate for the output of the service sector of the economy in July. This shows a 0.4 […]
Brexit was the final straw: it’s time to scrap the IMF
Sports fans will all be familiar with the commentator who almost always gets things wrong. “Arsenal are very much on top here” he – it is invariably a “he” – will pronounce, or “Root is looking very settled”, only for the opposition to score a goal immediately and for the Yorkshireman to be clean bowled. […]
Why the economic picture tends to be rosier than initial estimates suggest
One of the surprises of last week was the Office for National Statistics (ONS) estimate of economic growth in the second quarter of 2016, the period from April to the end of June. In the run up to Brexit, the economy expanded by 0.6 per cent on the first quarter of the year. This was […]
Why Britain and the US are streets ahead of Europe in innovation
The proposed takeover of the hugely successful ARM Holdings by the Japanese giant SoftBank is in the news. Cambridge-based ARM is well placed to exploit the white hot concept of the internet of things, highlighting the UK’s recent advances in this field. The UK has also performed well in biotechnology. But the industry came under […]
The only way could be down for shares – and Brexit is just the catalyst
The Brexit vote creates many uncertainties, exciting or frightening depending on your predilection. One thing which is certain is that the Leave victory was delivered by the less-skilled sections of the electorate. It seems part of a more general stirring up of what we might think of as the dispossessed, those who feel left behind […]
Old Europe’s poor innovation record is a harbinger of long-term stagnation
The economic debate around Brexit has been disappointing. Far too many of the points focus on the short-term. Would Brexit precipitate a sterling crisis? Well, if it did, at some point the currency would bounce back? Would it tip us into a recession? Maybe, but recessions come to an end. The key economic question, not […]
