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Tony Yates Profile picture
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3 Mar, 4 tweets, 1 min read
Will be interesting to see what the new @bankofengland remit, described today, is interpreted to mean.
Skewing corporate bond purchases [which don't amount to very much] towards greener firms? If so, how much of a skew would qualify as meeting the target?
Such a skew would presumably increase the credit risk for a given portfolio, in the short term. BoE indemified against that, but how much extra credit risk is acceptable per unit of greening?
I'm not really in favour of this change. Best to green via taxes directly set by the govt. I'm less against if it comes explicitly from the govt and doesn't force the central bank to show some green leg. Hence why specificity needed, to avoid central bank discretion.

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More from @t0nyyates

Tony Yates Profile picture
3 Mar
Missing from the Budget is any discussion or action at all on addressing the economy's problems post covid. What health budget will be need to put us in a better place to deal with another one, or will we not bother trying to prepare [the implication of where we are]?
The pandemic has been incredibly regressive in terms of - impact on children's education; mortality; who can homework and who cannot; square footage that one is locked down into. Any thoughts on addressing that, or do we just proceed as though it didn't happen and won't?
What will be the hangover on expenditure patterns, demand for space, where people want to live and work? What role, if any, is there for government in facilitating dealing with this legacy/transition?
Read 14 tweets
Tony Yates Profile picture
2 Mar
Philip Collins saying that Labour like Boris Johnson taking their policies of generous deficit financed policies during the covid crisis. I think the opposite. Labour would prefer the Sunak view to win out so it can stand alone on fiscal activism [clear red water].
Right now Labour is confined to making minor technical points here and there. Or bringing up past failures, which sounds like point scoring during a national tragedy.
I think the Collins view derives from thinking that fiscal conservatism is being 'good on the economy', which, if it were so, would put Labour in a trickier spot.
Read 7 tweets
Tony Yates Profile picture
2 Mar
Fair chance that some of a recorded piece on government borrowing, talking to @lewis_goodall, will make it into @BBCNewsnight tonight.
I wrote at length about this in a piece for @prospect_uk a while ago: prospectmagazine.co.uk/economics-and-…
Tuning in, there's a game on TV where you have to guess whether someone on zoom is wearing trousers or not. Just to be clear, I was definitely wearing trousers.
Read 4 tweets
Tony Yates Profile picture
2 Mar
This is really good by @jdportes ukandeu.ac.uk/the-budget-why…
Points out @GeorgeOsborne put political interests of the Conservatives above those of the nation + did well out of it electorally, though putting us in a much worse place to weather the pandemic. But what exactly is in the political interests of the Conservatives now?
As @jdportes points out, mainstream econ opinion has moved doveish somewhat. Circumstances have forced the Tories' hands. And the electoral focus on the mythical 'Red Wall' tilts them to fiscal activism in the short and long term.
Read 4 tweets
Tony Yates Profile picture
2 Mar
One of the things missing from the fiscal / covid strategy debate around the budget is what the risk of another pandemic is, and what it looks like if one hits.
If we are going to get one every generation, then the strategy of rolling over the debt indefinitely and allowing growth to shrink it as a portion of national income reduces what we should be doing by way of support to what would be shrunk by that growth subsequently.
That is, if you believe in finite fiscal space, which I do.
Read 4 tweets
Tony Yates Profile picture
2 Mar
The William Hague article on debt is actually really weird and I can hardly follow it. But basically it's wrong.
It's ironic that he sets out on a hearty historical analogy. Because historically speaking our spikes of debt/GDP have been unwound not by paying down debt, but by growing GDP, a bit of inflation [quite a bit in the 70s and 80s] and financial repression.
What does this mean? Image
Read 10 tweets

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