Macroeconomics: UK economy, IB Economics

An interesting look at the housing market, and the factors that have kept it buoyant throughout the pandemic, this Guardian article wonders about the extent to which house prices are going to cool. 

Given that many people are locked into fixed rate mortgages and there are still more mortgage approvals than pre-pandemic, you might think that whilst you wouldn't expect house price growth to continue at the current rate, which was 1.1% in April and over 12% for the year, according to Nationwide. 

Flybe has gone into administration, putting 2,000 jobs at risk and having the potential to provide a significant negative regional multiplier in places such as Exeter and Southampton, where the airports are heavily dependent upon the company's flights.

Sad days - the Flybe Southampton to Newcastle route was a staple of my life for nearly a decade - although I have to confess that I did once fly on a plane with only 9 passengers, which even at the time made me wonder about the route's viability.  

Would the new Carillion please stand up.

And here it is: it seems the Interserve is on the brink of going into administration. Is this another sign that the contracting out/competitive tendering model is on the way out. Or is it just proof that when overseen with 'light touch' regulation, these sort of businesses cannot be trusted to survive.

Of course, the well-paid executives who've led both Carillion and Interserve will exit stage left, without accepting any personal responsibility, and will be join by auditors - at a guess one of the big four, and probably PwC - to wash their hands of the whole sorry business.

It's rare for me to say it - but sometimes capitalism doesn't help itself... 

The first of these business briefs is worth a look: the government might have to face reality. Can we overcome the current skills shortage by training British workers, or will we need to relax visa restrictions to solve our supply chain problems. 

It was Einstein who said that "the definition of insanity is doing the same thing over and over again and expecting different results" - and so it proves, with a GMB report suggesting that, much like the collapse of Carillion, the government was still giving public contracts to Interserve despite its profit warnings and exceptionally high debt levels. 

Could it have been the case that the government was helping to sustain yet another business that was being run like a giant Ponzi scheme? Even more remarkably, there are suggestions that plans were being drawn up to nationalise the company in the event of its liquidation - something that would appear to be a reasonable short-term salve but that, ideologically, at least, would appear to admit that the current outsourcing model is dysfunctional.