The idea that London will be replaced as Europe’s financial centre is completely potty March 16, 2017 It's now almost nine months since the referendum, and Article 50 is about to be invoked. Readers of this column will be familiar with my arguments as to why a unilateral free trade Brexit is the optimal exit strategy, because of the gain to consumers in the short term and to consumers and producers in the [...]
The US Federal Reserve has hiked interest rates and signalled a slower pace of monetary tightening March 15, 2017 The US Federal Reserve lifted interest rates for the second time in three months last night, but sent the dollar and US Treasury yields tumbling with a cautious outlook on economic growth and future hikes. The federal funds rate was raised to 0.75 per cent-one per cent. However, the Fed stuck to its forecast of just two [...]
Was Philip Hammond right to U-turn on his national insurance hike for the self-employed? March 15, 2017 Julian Jessop, chief economist at the Institute of Economic Affairs, says Yes. It is increasingly hard to justify why the self-employed should pay much lower national insurance contributions (NICs) than those who work for others. Nonetheless, this distortion should have been tackled as part of a fundamental rethink of the tax and benefit system, rather [...]
HOLD: Hands off interest rates, City PM’s Shadow MPC tells Bank of England’s Monetary Policy Committee March 15, 2017 Economists expect the Bank of England to leave monetary policy unchanged at tomorrow’s meeting of senior policymakers, but pressure is slowly growing to begin pushing monetary policy back to more normal levels. City PM’s Shadow Monetary Policy Committee (MPC) voted in favour of keeping policy unchanged, but added another dissenter since February's meeting pushing for [...]
Rejoice? Unemployment hits its lowest since 1975 – but the experts aren’t so happy March 15, 2017 Unemployment in hit its lowest level since 1975 in the three months to January while the rate of working-age adults employed stayed at record highs. However, weaker wage growth at a time inflation is rising has given economists – and sterling – pause for thought. The government was cock-a-hoop. Damian Hinds, minister for employment said [...]
Pound reverses gains as wage growth falls – but unemployment in the UK reaches lowest level since 1975 March 15, 2017 The rate of unemployed people in the UK has fallen to its joint lowest level since 1975 as the rate of people in employment in the UK stayed at record highs in the three months to January. Unemployment fell to a four-decade low of 4.7 per cent of the work force, down from 5.1 per [...]
Public sector pay has started falling sooner than forecasted – and it’s going to keep falling March 15, 2017 Average real pay is falling in the public sector, and it's expected to drop further over the next three years, new research shows. The Resolution Foundation's latest earning outlook, which will be published today, forecasts average real pay in the public sector will fall below 2004-2005 levels by the end of the parliament (2019-2020). Forecasts released [...]
Need a reason to cut public sector pay and pensions? Look at Jeremy Corbyn March 15, 2017 The shambles over the treatment of National Insurance has dominated the media’s reporting of the recent Budget. But only the previous week, Jeremy Corbyn made a complete horlicks of his tax return for the second year running. The Bearded One makes a saintly fuss over making his tax affairs transparent. In 2016, he forgot to [...]
As the Federal Open Market Committee meets, is the US economy ready for higher interest rates? March 15, 2017 Shaun Richards, an independent economist, says Yes. The situation facing the United States has two major features. The most immediate one is the rise in inflation, with the consumer price index rising by 2.5 per cent on a year before in January, and the personal consumption expenditure method rising by 1.9 per cent. These are [...]
IMF “encouraged” by strong UK growth, Christine Lagarde says March 14, 2017 The UK’s growth in recent months has been “encouraging”, contributing towards healthier prospects for the world economy, according to the head of the International Monetary Fund (IMF). Christine Lagarde said the IMF is “especially encouraged by stronger-than-expected economic activity in the Euro area, the United Kingdom, and Japan.” The outperformance of the UK was one [...]
