It’s only business investment which can save the economy

This is the substance of an economic forecast just released by the Ernst & Young ITEM Club. Whilst acknowledging that the UK may have been saved from a double dip recession by a ‘loose’ monetary policy, the ITEM Club believes that UK GDP growth will be a dismal 0.4% this year, before rising to 1.5% in 2013 and 2.6% in … Continue reading

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Has Quantitative Easing actually worked?

 The Bank of England introduced the so-called scheme of Quantitative Easing (QE) in March 2009 and it continued until January 2010. This was an attempt to inject money directly into the economy by buying financial assets on the open market, largely government and corporate bonds. It was introduced because the price of money (Bank Rate) was not working sufficiently to … Continue reading

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Will Greece bring the eurozone down?

There is a crisis in Europe at the moment as a result of the possibility of Greece defaulting on its debts. The euro has fallen in value and stock markets have dropped around the world during the last few days. Even the Chinese have expressed concern, because Europe is such an important market for them. Greece is a basket case, … Continue reading

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Growth is beginning to respond but there will be an uneven recovery

Economic activity in OECD countries will gradually pick up steam over the coming two years, but the recovery will be uneven and unemployment will remain persistently high, according to the OECD’s latest Economic Outlook. The OECD sees the main challenge to countries at the moment as the ability to move from a policy-driven recovery toward self-sustained growth.  “As stimulus is withdrawn, … Continue reading

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What is the matter with them?

I have just recovered from the Budget this week, as it was even worse than I had anticipated. I keep writing in my blogs that extreme austerity packages are going to damage the economy but George Osborne is just not listening. What’s the point of me writing all this if he is not taking a blind bit of notice. I … Continue reading

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2009: A Review of the Economic Year

This is the title of a talk given by Spencer Dale, Chief Economist at the Bank of England yesterday in which he discusses the policy response to the economic downturn, evidence that the economy has stabilised, and the prospects for 2010 and beyond. In it he notes that the MPC’s interest rate decisions have acted to improve companies’ cash flow … Continue reading

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Unemployment has stabilised in the OECD

The unemployment rate in the OECD area remained at 8.6% in September, the same as it was in the previous month. Overall, unemployment was 2.3 percentage points higher than it was a year earlier.   When we look at the Euro area, unemployment was 9.7% in September which was 0.1 percentage point higher than August. Meanwhile the latest figures for … Continue reading

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Poorest countries need to adopt a new approach

The UN Conference on Trade and Development (Unctad) has just published its “Least Developed Countries Report 2009”, which looks at the world’s 49 poorest countries.   The report says the Least Developed Countries (LDCs) need to focus macroeconomic policy on building up both the productive capacity of their economies and infrastructure. Also, they need to ensure that their fledgling banking … Continue reading

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Angela Merkel slams central banks

Yesterday, the German chancellor, Angela Merkel, hit out at the leading central banks and their policies. Principally, she was gunning for the Bank of England, the US Federal Reserve and the European Central Bank (ECB). She was particularly upset about the policies of “quantitative easing”  which is basically printing money to purchase existing government and corporate bonds with a view … Continue reading

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