A quick follow-up to this tweet on household wealth. Much of the increase is house prices, but some is still savings - the savings ratio is at its highest since 1962 (1/?)
A lot of people are expecting/hoping for that cash to come sluicing back into the economy, juicing the recovery. But I'm afraid @CPSThinkTank can offer a warning from history...
As @JethroFElsden showed in his paper 'History Repeating?', on the postwar recovery, the boom in the US wasn't fuelled by people winding down the savings they'd amassed in wartime (because there was nothing to buy/they were in the military)
Instead, after 1945 people (on aggregate) slashed their savings ratio - ie they kept the money they'd saved in the bank, but didn't add to it.
If they act the same way this time, it could have less of an effect than people are hoping, because the savings ratio was already low by historical standards (though not abnormally so)
(Incidentally when the ONS says the savings ratio is at its highest since 1962, it's only because they only started counting then...)
(The rest of @JethroFElsden's paper is also very much worth a read - details here cps.org.uk/research/histo…)

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More from @rcolvile

25 Apr
I've written my column, inevitably, on Gotterdommerung - and how utterly misguided it was for the PM to pick this particular fight thetimes.co.uk/article/robert…
As I point out, one of the best reasons to worry that Dom would go nuclear is that he has *literally done this before*. After eight months as IDS's director of strategy, he wrote this for the Telegraph
And any idea that he would be loyal enough to the Tory party to stay his hand is probably dispelled by the par that follows (telegraph.co.uk/comment/person…)
Read 6 tweets
23 Apr
For strategic, diplomatic, economic and above all humanitarian reasons, the UK and other Western countries should be sending vaccines to India by the bucketload. The US alone has huge stockpiles of AZ & J&J it hasn’t authorised.
And yes India has very significant vaccine supply capacity of its own. But it is a vast country and every little helps.
And crucially the US needs to lift its ban on the export of the components India needs to actually make them.
Read 4 tweets
15 Apr
Really interesting and important new report today from Alex Morton, our housing guru at @CPSThinkTank. A quick thread/summary (1/?) cps.org.uk/research/the-h…
We want and need to build more houses. Cameron-era planning reforms focused on land supply, by pushing for more planning permissions to be granted. But this only translated partially/weakly into more houses being built.
It's often claimed that land banking by the big housebuilders is the culprit. And as Alex shows, they have certainly built up v significant reserves - the biggest housebuilders now have plots equivalent to the five-year land supply for England.
Read 11 tweets
4 Apr
Have written today about the EU's pandemic screw-ups, and the alarming picture they paint (1/?) thetimes.co.uk/article/vaccin…
The most obvious thing to say (as I do in the column) is that Britain has no high ground on this - stones, glass houses, etc. But the vaccine debacle fits with a worryingly familiar pattern.
As one Brussels veteran says, it's the same pattern as the migrant crisis. Bad thing happens -> cries that the only way to solve it is more Europe -> Commission takes over -> everyone feels virtuous about the European model -> Commission fucks it up -> rats in a sack time
Read 7 tweets
3 Apr
V g from @lukemcgee on how Putin is exploiting the EU’s vaccine failure cnn.com/2021/04/03/eur…
Aside from the fact that it’s Vlad Putin, the fact that Europe with its world-class pharma industry should be asking a second-rater like Russia for help shows just how badly they’ve screwed this up
In fact, just to stress this, the EU was responsible for approx 60% of global pharma exports in 2018. If anywhere should have got this done... en.wikipedia.org/wiki/List_of_c…
Read 4 tweets
31 Mar
The ethnic disparity report is now online here, and well worth looking at (if you have a spare few hours). A few quick thoughts (1/?) assets.publishing.service.gov.uk/government/upl…
Whatever you think of the conclusions, this is clearly a serious piece of work. They have clearly sifted through a mountain of evidence and the final report is pretty darn hefty.
We're used to reports like this saying 'X is a disgrace and we will fix it' or 'this is how we will improve things'. But the central message of this one is basically 'it's a bit more complicated than that' - which obviously makes it harder to land.
Read 10 tweets

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