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Julian Jessop 🇬🇧 🇺🇦

@julianHjessop

Jun 9

A quick 🧵 on the potential economic impact of the rail strikes.

In short, not a game-changer, but certainly another blow the UK could do without... 🙄 (1/5)

#RailStrikes

Unions must give warning, so there is some time to make alternative plans.

The series of 1-day #strikes (Tue 21, Thur 23, Sat 25) might be less disruptive than a single, prolonged stoppage, because some customers may be able to reschedule their use during the breaks... (2/5)

Some of the costs to the economy could also be reduced by ‘home working’, and by the diversion of leisure spending to other activities.

Nonetheless, there will be significant disruption to passenger traffic, and possibly to freight, including supplies of essential goods... (3/5)

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Julian Jessop 🇬🇧 🇺🇦

@julianHjessop

Mar 22

The UK government borrowed about £5bn more than expected in February, as higher debt interest costs offset a rise in tax revenues.

But favourable revisions to past months mean that borrowing is still on track to undershoot the OBR forecast for FY 2021-22 by about £24bn... (1/4)

Looking forward, rising #inflation will keep debt servicing costs high. But OBR analysis (Box 3.2 Oct EFO) has already shown that an inflation shock is likely to reduce borrowing overall, thanks to the boost to revenues, even with much larger hikes in interest rates... (2/4)

#Inflation will surely reduce the burden of #debt relative to national income, especially with real interest rates likely to remain low - even negative - for the foreseeably future.

Indeed, debt has already fallen to 94.7% of GDP, from a recent peak of more than 100%. (3/4)

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Julian Jessop 🇬🇧 🇺🇦

@julianHjessop

Jan 14

Just updated my UK #GDP forecasts with today's data... 🤓🧵

Some key points and international comparisons

1. UK economic growth in 2021 is likely to be just shy of 7½%, 1% higher than assumed in the October Budget and 3% higher than the consensus at the start of last year... 👍

2. This means that the UK was almost certainly the fastest growing G7 economy in 2021.

Many like to dismiss this as a 'dead cat bounce' after the relatively large fall in 2020. But the UK still did much better than expected, even taking account of this favourable base effect...

3. To illustrate this, this chart compares different vintages of the OECD's forecasts for last year.

In December 2020 the OECD expected the UK to grow by 4.2% in 2021, and to be outpaced by France and Italy. This turned out to be the biggest forecast error for any G7 economy...

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Julian Jessop 🇬🇧 🇺🇦

@julianHjessop

Jun 11, 2021

Some more thoughts on the economics of delaying #FreedomDay (please read the whole thread before shouting at me!).

Keeping the remaining Covid restrictions for a few weeks longer would be unlikely to derail the recovery, but could still have some significant impacts… (1/6)

The sectors that are still severely restricted account for less than 5% of GDP, and most are already open to some degree.

Money not spent in pubs or nightclubs (or holidays abroad) can also still be spent elsewhere in the UK economy... (2/6)

The direct cost of postponing Freedom Day would therefore be relatively small compared to full #lockdowns, probably no more than 2% of GDP, or less than £1 billion for every week of delay.

That’s not peanuts, but nor is it prohibitive. (3/6)

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Julian Jessop 🇬🇧 🇺🇦

@julianHjessop

Jun 11, 2021

A bit more on today's UK trade data and the impact of #Brexit...

It helps to look at #imports and #exports *separately* - the stories are quite different.

The relative weakness of UK trade with the EU is mainly on the *import* side, which is only partly Brexit related... (1/6)

A lot is also due to problems in the car sector (e.g. global shortages of parts) and the relative weakness of demand for cars, which we mainly import from the EU, compared to goods we import from the rest of the world (e.g. clothing & PPE from Asia)... (2/6)

There may also be some cases where UK imports from the EU are being replaced by imports from the rest of the world, or local production.

But if consumers were happy buying from the EU before #Brexit, new trade frictions that hinder this are not obviously a 'good thing'... (3/6)

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Julian Jessop 🇬🇧 🇺🇦

@julianHjessop

Dec 23, 2020

📢 thread: 12 reasons to be cheerful about the UK #economy in 2021🎄

I know 2021 will be another tough year for many people and businesses, but I’m aiming here to provide some counterbalance to the more negative commentary you can easily find elsewhere...

1. The household sector (in aggregate) has built up substantial #savings during the pandemic that could be used to fuel a strong recovery in #consumer spending. Obviously, the distribution is uneven and much still depends on confidence. But…

2. Consumer ##confidence jumped by the most in eight years in December on the good news on the #vaccine. Even in November, households were the least pessimistic about #job security since March, despite the grim headlines...

Read 14 tweets

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