What if the OBR too optimistic about growth?
The Office for Budget Responsibility (OBR) published its economic and fiscal outlook document in conjunction with Jeremy Hunt’s budget statement on 6 March. Close scrutiny is paid to the short-term projections of growth in the economy made by the OBR. Tax receipts received by the government depend strongly on the rate of growth. And higher tax receipts give a […]
Ricardian Equivalence and why Britain’s really in a recession
News that we have entered a technical recession will come as no surprise to anyone who has even a passing acquaintance with the British economy. But what is less well understood is how personal spending – or rather the lack of it – is contributing to low growth. Household incomes have been squeezed by rises in energy […]
We can’t subsidise or incentivise away the pain of a transition to renewable energy
The Scottish Nationalist Party has become notorious for their inconsistency. The latest example is its hapless health minister, Michael Matheson, who submitted a bill for £11,000 for the use of his iPad whilst on a family holiday in Morocco. He first claimed it was all incurred on official business between Christmas and the New Year. […]
If economic experts wield political power, we’ll get dragged into fiscal groupthink
Even before the double win in last week’s by-elections, Labour was behaving like a government-in-waiting. Apparently the party has begun drafting the bills for the initial pieces of legislation it will enact after the election. When George Osborne was at the Treasury, the Conservatives created the Office for Budget Responsibility (OBR). This meant responsibility for […]
Politicians must understand that taxation is not a substitute for economic growth
In a speech last week, the leader of the Scottish Labour Party provided a ray of sunshine. I am not taking bets, by the way, on the number of times this particular sentence has been written. But Anas Sarwar was making a serious point which is of critical importance not just for Scotland, but for […]
From international trade to interest rates, macroeconomics is in yet another tail spin
Fifty years ago, the Euro area accounted for 30 per cent of the world’s economy. Since then, there has been a steady fall; now, its share of world output has halved. In contrast, the Asia-Pacific economies have grown much faster. These trends are well established, and this region will increasingly dominate the world economy. Yet, […]
China’s zero-Covid policy must be a cautionary tale for the UK
As we greet the new year with the hope of more serene times ahead, some might do it with a measure of doubt and trepidation for a variety of reasons, one of them being the government’s decision to resurrect Covid-19 restrictions. Admittedly, it is in a very limited form and only affects arrivals from China. For […]
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 […]
How Truss pays for her plan for energy prices is just as important as what she does
Our new prime minister already has a long list of detractors. Yet something many are failing to take notice of is how well she grasps the fundamental importance of generating economic growth. This is the central issue facing the economy and it will determine how, ultimately, we pay for an intervention in the energy market. […]
As we look back on pandemic mistakes, we need to count livelihoods in our losses
Ministers don’t need to face the inquiry into the Covid-19 pandemic until next spring, the chair of the probe, Heather Hallet, announced this week. As part of its mandate, the inquiry will “listen to and consider carefully” the experiences of those who lost family members or “have suffered hardship or loss” as a result of […]
