If politicians keep ignoring economists, our strategies will never be cost-effective

Economists have been getting bad press because of the antics of the Bank of England and its Monetary Policy Committee. We are suffering from what we, as economists, describe as a “negative externality”. It might be convenient for you to drive your car, for example, but the emissions which this creates have a negative impact […]

Sunak’s flexibility has been curtailed by our undue reverence for the Bank of England

Rishi Sunak will deliver an updated Autumn Statement next week, after Liz Truss’ so-called “mini-budget” triggered her demise. His freedom for manoeuvre has been sharply contained by the new found reverence being accorded to the Bank of England and the Office for Budget Responsibility. The Bank of England has forecast a long recession, which could […]

Central banks have fooled themselves into thinking they have power over inflation

The failures of central banks around the world to anticipate and control the current upsurge in inflation are now apparent to all. What has been going on with the highly technical models which economists in these institutions build to try and explain inflation? If we look under the bonnet, we find a debate which is […]

As Johnson squirms, his party must remember the roots of Conservatives values

Boris Johnson’s government now has a penchant for embracing policies which, to many, have a distinctively non-conservative feel. High taxes, a big state. What’s next? An old idea which is currently being given new legs is that of a universal basic income (UBI). The basic concept is that all citizens of a country receive from […]

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 […]

Time for the Treasury to get with the programme — Britain can afford to spend

HM Treasury

In the days of the old Soviet Union, so-called Kremlinologists would pore over every utterance of the Politburo, every sentence in Pravda, to try to work out what was really going on. Sajid Javid’s defenestration from the Treasury has led to an upsurge in similar types of intellectual effort here. What was it really all […]

From Northern Rock to lunch tables, no one is immune from the herd mentality

Northern Rock

The Bank of England and Federal Reserve held a two-day conference last week in London on big data and machine learning. All very interesting stuff. There was an intriguing vignette as we emerged from the conference room for the frugal lunch on the first day. Straight ahead was a table with sandwiches, fruit and the […]

Economists have lost the public’s trust by meddling in politics

Big Ben from London Eye

Michael Gove famously said during the Brexit campaign that people “have had enough of experts”. Certainly, the outcome suggests that many were sceptical of the doom-laden economic projections of Project Fear. But what do the public think about economists themselves? An intriguing survey released last week by ING bank and the Bristol University Economics Network […]