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Category Archives: macroeconomic policy

“There are no short-cuts to a better future.” – David Cameron

The Prime Minister has spoken in Davos today at the World Economic Forum. In his keynote address he said: “It’s going to be tough, but we must see it through. The scale of the task is immense, so we need to be bold in order to build this economy of the future. The British people know these things. They understand … Continue reading

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Squeeze on living standards is inevitable says Merv

“In 2011, real wages are likely to be no higher than they were in 2005. One has to go back to the 1920s to find a time when real wages fell over a period of six years.” “The squeeze on living standards is the inevitable price to pay for the financial crisis and subsequent rebalancing of the world and UK … Continue reading

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QE too?

Yesterday, the US Federal Reserve announced that it was introducing its second round of quantitative easing, by pumping $600bn (£373bn) into its economy by the end of June 2011. Will the Monetary Policy Committee of the Bank of England follow suit? The answer for the meantime is ‘no’. Today they decided to keep interest rates on hold at 0.5% for … Continue reading

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So where are we now?

The dust has started to settle after the draconian cuts put forward by the Chancellor, George Osborne, last week, as he put forward plans to cut government spending by £81 billion over the next four years. Was he right to make cuts of this magnitude? The UK borrowing figures last week might suggest that he was. The figures show that … Continue reading

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Record UK trade gap

The deficit on trade in goods widened to £8.7bn in July, which is the biggest monthly figure since this current series of measurement began in 1998. This deficit compares with one of £7.5bn in June according to figures published yesterday by the Office of National Statistics. The UK’s balance of trade on goods and services also widened from £3.6bn in … Continue reading

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Pushing us towards the death spiral

Yesterday the government announced that it was making initial cuts in public spending of £6.2bn largely by cutting what the Chancellor, George Osborne, called “wasteful spending.” These include cuts in consultancy, travel costs and cutbacks in various departments.  But this isn’t the whole picture on government spending reductions as we still have an emergency Budget to come on 22nd June. … Continue reading

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Will a rise in national insurance reduce UK jobs?

The current Labour government has put in place plans for a rise in National Insurance contributions (NICs) from April 2011 of 0.5% on employees and 0.5% for employers. Obviously, if Labour says ‘left’ the Tories have to jump and say ‘right’ and vice versa. Well, we can only expect this during an election period, although it is pretty much a … Continue reading

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Which snake would you trust most?

So, the general election has been called at last. As an economist who would you most trust to repair the country’s balance sheet and to get the UK thriving again? Thinking of politicians it is perhaps no coincidence that I have had snakes on my mind recently. Having spent a few days in the Karoo in South Africa, I was … Continue reading

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Benefits and costs from monetary union

At the end of last week, Francesco Paolo Mongelli, Professor at the University of Frankfurt, published a brief article entitled “Some benefits and costs from participating in a monetary union.” In his conclusion he says that: “There is a broad range of benefits and costs in sharing a currency. Contrary to conventional wisdom, the macroeconomic costs of losing influence over … Continue reading

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A night at the museum

George Osborne, the shadow chancellor, has just announced eight “clear and transparent benchmarks for Britain” in a speech made at the British Museum. Now I know it was this morning that he made the speech and not during the night, but I still feel that he has left us largely in the dark.   He stated that it was time … Continue reading

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