Productivity growth has fallen from 4.7% a year on average between 2000 and 2007 to 1% since 2008, says EEF
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Productivity growth has fallen from 4.7% a year on average between 2000 and 2007 to 1% since 2008, says EEF No comment yet.
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The central bank raises interest rates by six percentage points in six days as the peso plummets.
Graham Watson's insight:
Really interesting article about the state of the Argentinian economy, with news that the central bank has raised interest rates twice in a week, rates leaping from 27.25% to 33.25%.
Inflation has been a perennial problem in the country, and this move is designed to counter a depreciation of the peso. However, moves such as this can only work if investors have confidence in the ability of the central bank to arrest the slide; if it's interpreted as a sign of weakness the move might well have counter-intuitive effects.
Watch this space.
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Hotels and restaurants worst hit amid weaker recovery from cold snap than forecast
Graham Watson's insight:
More evidence that weaker than expected growth has implications for the conduct of monetary policy in the United Kingdom. This time, it's the latest service data that is the source of disappointment.
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Focus on customs has cast doubt on PM’s compromise approach to EU exit
Graham Watson's insight:
This little Guardian piece highlights the inherent contradiction of some of the current Brexit debate - the whole issue of whether Britain can remain in a customs union with the EU but not in the EU itself is vexed. Watch this space...
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The department store chain announces a turnaround plan and a new Chinese owner.
Graham Watson's insight:
More High Street woes - this time it's House of Fraser closing stores and re-organising.
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The towns and cities offering the best incomes aren't always the ones you'd expect.
Graham Watson's insight:
A nice little snapshot of regional inequality, with focus on wage differentials in different UK cities, and an attempt to identify some of the factors that cause these differentials.
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Growth in loans, overdrafts and credit cards slows sharply in March, making a rate rise less likely.
Graham Watson's insight:
Another little pointer towards this week's interest rate decisions. The rate of growth of unsecured borrowing has slowed, implying less need for an interest rate rise to head this off. That and the weaker than expected growth data...
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Chief economist says ‘taste in books, TV and radio may also offer a window on the soul’
Graham Watson's insight:
The differences between qualitative and quantitative data - the Chief Economist at the Bank of England, Andy Haldane, has argued that by analysing the lyrics of songs being downloaded, and the types of books being bought, we might gain an insight into consumer sentiment.
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Figures showing problem is not confined to London raise concerns about inter-generational fairness
Graham Watson's insight:
The nature of the UK housing market crisis is unpicked in the Observer by Michael Savage, highlighting the inter-generational equity issues. The level of home ownership among millennials is far lower than people of similar age twenty or thirty years ago.
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Our system favours landlords over communities. The PM must side with the many, not the few
Graham Watson's insight:
Another excellent Larry Elliott article, this time looking at the 'broken' nature of the UK housing market and the potential solutions available. The brutal truth is that lots of solutions have been posited but very few are likely to increase the supply of housing, be it relaxing planning regulation, or changing the tax system.
His proposal, look at changing the Land Compensation Act of 1961, which seems to unduly privilege landowners, at the expense of those trying to get on the housing ladder.
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The crisis raises questions about what happens when online fails and there is little backup
Graham Watson's insight:
For students of Economics, this is an insight, albeit a small one, into the delights of the global financial crisis that occurred a decade ago. Apart from the fact that the growth of social media has given us greater ability to document what happened and responses to it.
For those of us 'd'un certain age' TSB is "the listening bank". It seems an inappropriate moniker at this moment in time.
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Friday's economic growth figure shows people are worried about the economy - and their own position
Graham Watson's insight:
Kamal Ahmed identifies three reasons why UK growth is so puny: Brexit, uncertainty, and a more general lack of consumer and business confidence.
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The number of new house starts fell sharply, adding to fears overall growth will be hit by bad weather.
Graham Watson's insight:
Construction down - attributed to the winter weather - and you should be aware of the implications of this for the wider economy. |
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A new report proposes taxing pensioners to spend more on the young and the NHS.
Graham Watson's insight:
KES old boy, Lord Willetts, has raised concerns about inter-generational equity, suggesting that the 'contract' between old and young has broken down.
It's argued that the young can't access the housing market, among other things, and that there are a number of tax changes that can help redress the balance. Lord Willetts argues that unless the issue is addressed, young people will get 'angry'. They will if they work out that they're paying for something that they, themselves, will never receive.
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NIESR cuts forecast from 1.9% after evidence growth almost came to halt in first three months
Graham Watson's insight:
More good news regarding growth - this time from the National Institute for Economic and Social Research who've revised down their growth forecasts for 2018.
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Prime Minister Theresa May faces crunch talks over the future of a new nuclear power station on Thursday, as fresh faults reduce the amount of energy Britain's ageing fleet of reactors can generate.
Graham Watson's insight:
You should be able to illustrate how this would affect the UK economy, by drawing a diagram (not just a PPF please!) and commenting on the likely impact of reduced electricity generating capacity.
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Group led by hotel owner wants to build a new terminal on the airport's western edge near the M25.
Graham Watson's insight:
The expansion of Heathrow is a controversial topic - with this a new proposal for airport expansion, undertaken by a private company rather than the owners of the airport. It's far cheaper than the current proposals, and popular with the airlines who use the airport, and want to keep costs low.
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Markit/Cips PMI shows return to growth in April after slump caused by wintry March
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A rare bit of good news, both for the construction sector and the economy as whole: the latest Markit/Cips PMI data suggests that the sector is recovering after a harsh winter, and this bodes well for future growth too.
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The BBC understands the chancellor will back a plan that will see Britain collect customs levies on behalf of the EU.
Graham Watson's insight:
The latest twist in the Brexit tale, with the Chancellor, among others, apparently in favour of a customs partnership with the EU, with the UK collecting customs levies on behalf of the EU, but leave the UK free to determine its own tariffs.
If you think it sounds complicated - it is. But some argue that its complexity is designed to force Britain to remain in the customs union via the 'back door'. As you can imagine, this is unpopular in other quarters.
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Royal Bank of Scotland is to close 162 branches in England and Wales, resulting in nearly 800 job losses.
Graham Watson's insight:
Bad news for the banking sector, bad news for the economy as a whole. Negative multiplier effects? And an indicator of the shape of things to come?
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A total ban on night flights at Heathrow would “seriously damage” the UK’s economic competitiveness by hitting important export industries and regional growth, a major aviation body has warned.
Graham Watson's insight:
The expansion of Heathrow is proving controversial, and the issue of night flights is the latest issue to raise concerns. Clearly, there are negative externalities associated with this, but the International Air Traffic Association have suggested that a complete ban on night flights would have adverse effects upon the UK's international competitiveness.
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Having been forced into emergency measures in the austerity years, Mark Carney is now stymied by last week’s GDP figures
Graham Watson's insight:
Phillip Inman writes about the difficulties of formulating monetary policy in the present environment. The general assumption is that rates were likely to go up but that the latest economic data is likely see this postponed.
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Weak GDP growth of first quarter could be low point but chancellor faces serious headwinds
Graham Watson's insight:
Excellent Larry Elliott piece that looks at the state of the UK economy and wonders whether the Chancellor's upbeat speech at a Washington breakfast reflects the reality of the British economy.
The most recent data suggests that he's overly optimistic, but some might argue that the Chancellor has an important role as 'cheerleader' boosting consumer and business confidence. Of course, if that's misplaced, he might end up with credibility issues.
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Britain’s economy ground to a halt in the first three months of the year as bad weather piled woes on top of squeezed household finances and a troubled construction industry.
Graham Watson's insight:
More grist to my 'press coverage of the economy' IA mill: one can't do anything but wonder about the fact that this story is relatively hidden on the Telegraph website.
Why? I'd have thought that GDP growth being at a five-year low would be a headline grabber.
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GDP growth fell to 0.1% in the first quarter of 2018 driven by a sharp fall in construction.
Graham Watson's insight:
Already filed under the "Not Good News" category, the latest growth figures must be a cause for concern, if only because the ONS have suggested that the bad winter weather is only responsible for a tiny part of this.
However, it will be interested to see what happens when subsequent revisions occur. Many people think that there's likely to be an upwards revision, but even then, it's not expected to be significant.
The bigger worry is going to be the extent to which weaker construction data might presage sluggish future growth. |
The EEF have renewed calls for a national industrial plan to help tackle the productivity puzzle. Productivity " had fallen from 4.7% a year on average between 2000 and 2007 to 1% a year on average since 2008" the article notes.