Labour’s new industrial policy document, ‘A Better Plan for Britain’s Prosperity’, is an important step forward in thinking about the world of work in the coming years. I’ve just taken a quick look through the full 79 page document. There’s much that we knew before: Labour promises, for example, a…Read more…
What David Cameron should do if he’s serious about getting Britain’s workers a pay rise
Politics is a funny business isn’t it? David Cameron has presided over the longest squeeze on living standards since Victoria was on the Throne. And yet there he was on Tuesday getting up at the British Chambers of Commerce, less than 90 days away from a general election, and saying with an…Read more…
UK household debt: still amongst the highest in the world
With the publication of the McKinsey report, Debt and (not much) deleveraging, debt is back in the news. But while McKinsey (an ultra-prestigious consultancy) appears to seek deleveraging, the UK is poised to head in the opposite direction. As widely r…Read more…
A few thoughts on industrial policy, productivity … and Italy!
Sadly, most Touchstone readers won’t be able to watch this fascinating discussion between Mariana Mazzucato, author of ‘The Entrepreneurial State’, and Yoram Gutgeld, economic advisor to the Italian Prime Minister, Matteo Renzi. It took place on ‘Otto e Mezzo’, a discussion programme broadcast on…Read more…
It gets worse: Osborne’s ‘recovery’ is twice as slow as the slowest recovery on record
Looking at GDP per head, the UK economy grew by 5 per cent between 2009 and 2014. Previously, the slowest recovery on a per head basis was from 1886 to 1901, when the economy grew by 10 per cent: twice as fast. The average recovery speed over five years for previous major recessions is 13.7…Read more…
Extract from Len McCluskey’s Speech To Unite Officers and Organisers, Birmingham, February 2nd.
In fact, this is the slowest UK ‘recovery’ ON RECORD
A second look at historic GDP data shows the current ‘recovery’ is the slowest on record (which extend back to 1830), rather than the slowest recovery in modern history, as we reported yesterday. This chart shows index numbers of recoveries in GDP from the bottom of each recession to…Read more…
The slowest recovery in modern history slows down
GDP figures today disappointed expectations, with growth slowing for the second quarter in row, and increasingly departing already from the Office for Budgetary Responsibility forecast. In numbers: growth slowed to 0.5% in the last quarter of 2014, from 0.7% in the third quarter. This defied city…Read more…
While the ECB print money, was ex-Governor Lord King calling for fiscal stimulus in the UK?
On Monday evening at the London School of Economics, Lord King, former Governor of the Bank of England, and Sir Alan Budd, former chief economist at HM Treasury and a founder member of the Monetary Policy Committee, had ‘a conversation about central banking’ with Professor Charles Goodhart in the…Read more…
Core inflation is very far from “relatively stable”
There’s a lot of “good deflation” stories in the media today. (‘Almost certainly’ so, according to the FT.) One of the common themes sets the large fall in headline inflation against a rise on the month in ‘core’ inflation (i.e. inflation excluding energy,…Read more…
Deutsche Bank U-turn on deflation
At 0.5%, CPI inflation in December fell below the consensus forecast (0.7%) and way below the Bank of England’s November Inflation Report forecast for 1.0%. This is approaching deflationary territory, and I set out my own views yesterday. Understandably the government is desperately trying to…Read more…
Mark Carney’s letter to George Osborne: What might it say?
When the British economy misses the inflation targets set by the Chancellor, the Governor of the Bank of England has to write him a letter explaining the reasons. It looks like we’re on course to miss tomorrow – for the first time below rather than above target. Here’s what I’ve imagined Mark…Read more…
Planned future spending cuts return us to the Geddes Axe of the 1920s
On the basis of the OBR projections for future spending cuts, the only more severe consolidation in over a century was the Geddes Axe of 1921-23. That these disastrous policies are the nearest precedent for any prospective economic action beggars belief.Read more…
Time for an ethical energy policy
The £8m short term government loan for employee-owned Hatfield colliery, Yorkshire, is a welcome move by the government to protect hundreds of skilled jobs. But that such a loan is needed at all reflects the government’s failure to develop a long term strategy for UK coal in our energy mix,…Read more…
Wages fell £500 last year – 2015 needs a pay rise
Despite the recovery, 2014 has been another miserable year for living standards. The average wage is now worth £50 a week less than when the government came to power. And current policies offer little relief. The Office for Budgetary Responsibility forecast, released with the Autumn Statement,…Read more…
OBR projections confirm five years of the coalition leaves households poorer
If the government are looking for reasons why the public are not sharing their enthusiasm for the condition of the economy (eg ‘Optimism about the economic recovery is in freefall’, from yesterday’s Evening Standard ), they need look little further than the Office for Budgetary Responsibility’s…Read more…
OBR set out scale of tax losses from low pay growth
Yesterday’s OBR report sets out the impacts that low wage work is having for tax revenues, suggesting that the £17bn shortfall we assessed that low earnings have created to date (as set out in IPPR analysis for the TUC last week) is likely to be even larger. Firstly, the OBR point to various…Read more…
Autumn Statement 2014: The Touchstone roundup
The Chancellor’s Autumn Statement is in the papers today for stamp duty changes to help home buyers and a clampdown on tax avoidance. Our bloggers have been unpicking some of the other details though, and they’ve found a rather less rosy picture: Philip Pearson saw little or no benefit…Read more…
Tackling corporate tax avoidance in the Autumn Statement – measures welcome but will they work?
The Office of Budget Responsibility (OBR) notes that the ‘giveaways’ and the ‘takeaways’ in the Autumn Statement roughly balance out. A huge proportion of the so-called ‘takeaways’ – ie, that will generate net income for government revenues – stem from measures to tackle corporate tax avoidance and…Read more…
The real story of the Autumn Statement: the OBR tell the Chancellor to think again
Many are already reporting today’s Autumn Statement in terms of the immediate changes to stamp duty and air travel. But the big headlines were not in the Chancellor’s speech. It’s the OBR’s chilling analysis of the spending cuts that are set to come that should be the real…Read more…