Macroeconomics: UK economy, IB Economics

Is Liberty Steel on the verge of bankruptcy, and what will this mean for the thousands of employees that it has, often in relatively poor parts of the UK, such as the West Midlands, Yorkshire and the North East? 

Negative regional multiplier effects, anyone?

The mayor of the West Midlands Regional Authority - and Old Edwardian - Andy Street has endorsed plans to build a gigafactory to manufacture car batteries in Coventry. It's an ambitious scheme, but rather like Pirandello's play, where characters are looking for an author, the gigafactory is also looking for an experienced manufacturer to operate it. 

Investment, the multiplier effect and much more besides. 

Not great news for the West Midlands: ONS data suggests that it is the part of the UK that has been worst hit by the first Covid-19 wave, with the second quarter of 2020 seeing a 21% drop in output.

Bad news for Jaguar Land Rover and the West Midlands, perhaps, with the news that the car maker is looking for a government loan to protect the business, after sales have slumped in the wake of the coronavirus, with Standard & Poor suggesting that every month it is shutdown will cost it £1bn

If the firm is forced to shed jobs, then this would have a multiplied effect on the local economy

Strange to relate that the MP for Bromsgrove is in favour of HS2 - I suspect his majority might be significantly diminished if he wasn't seem supporting the project.

In short, yet more on HS2...

The latest ONS research shows the rising regional inequality in the UK with London surging ahead and the West Midlands on its coattails (Hurrah!) 

However, it also illustrates that other regions are lagging behind, and those that are growing more slowly are also starting from a lower base, perpetuating regional inequality.

The government might also think about why the West Midlands has performed so well since 2012. I can think of an obvious answer: HS2. If that hits the buffers, I suspect that growth in the West Midlands will also slow.

It could be Micro-, it could be Macroeconomic. In the former case, you'd focus on the role of trade unions in co-ordinating employers and participating in industrial relations.

From a macroeconomic perspective - it's a potential negative multiplier effect. 

Bad news for the West Midlands with the news that JLR is going to shed 2,000 jobs - expect a negative multiplier effect...

Micro- or macroeconomics? Either way, an Indian billionaire is looking to revived the BSA brand, investing in electric motorbike manufacture in the West Midlands. Regional multipliers all round. 

KPMG believe that the effects of coronavirus are going to be most marked in the West Midlands, and other regions, with London businesses best placed to recover.

This rather shatters the possibility of levelling up talked about by the Prime Minister, and means that regional inequality is likely to get worse before it gets better. 

Phillip Inman argues that there's a need for activist industrial policy to protect the UK car industry otherwise, post-Brexit, the sector will come under intense pressure. 

He advocates investment in electric vehicles, particularly in battery manufacture, to give the UK an 'in' to this market. It's particularly pertinent for the West Midlands, which accounts for around a fifth of the jobs in the sector. 

The CBI is now starting to identify the areas of the UK with most to lose from a no-deal Brexit, and, surprise, surprise, it's many of those areas that voted leave, the North East and the West Midlands.

Words fail me.