Ed Conway Profile picture
Numbers guy. Likes charts. Occasionally makes the mistake of deploying irony on Twitter. Books: https://t.co/O0xqA5NLNZ DMs open. Email: ed.conway@sky.uk
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Jul 22 35 tweets 12 min read
The tale of Newport Wafer Fab is a parable for our times.
Tells you everything u need to know abt:
- UK's industrial strategy; or complete lack of it.
- UK's inability to decide what to do abt China.
- Most of all, UK's complete obliviousness to what our economy actually DOES
🧵 So while the following may seem like a deep dive into an obscure corner of our economy, we NEED to spend time thinking abt this stuff if we're serious about industrial strategy.
But we're not.
Govt has no semiconductor strategy.
No plan here.
It's not even clear who's in charge.
Jul 7 4 tweets 1 min read
Unless something changes this will surely become increasingly important and evident in the coming weeks.
If this temporary government cannot pass legislation (and at the moment given the animus between the PM and his party it’s not clear they can) then that’s, well, troublesome. It comes back to something I was going on about yday.
It’s all very well saying you have an economic plan and you’re going to get on with it.
But in practice “getting on with it” means successfully passing a finance bill. Is that a given? I’m not so sure.
Jul 7 4 tweets 2 min read
If you want a break from the political soap opera today, you might like to see this cracking chart from today’s @OBR_UK report, showing how periods of war tend to be associated with big increases in government borrowing Another fine chart.
And a useful reminder that taxes on earnings - which these days make up the majority of government revenues - are actually a relatively novel innovation.
Up until the Napoleonic war the main taxes were things like excise duties
Jul 6 4 tweets 2 min read
Since the pound is once again close to a record low against other currencies around the world, perhaps it’s time for a bit of historical perspective.
With that in mind, here’s an annotated history of the pound sterling since the 1960s Image This chart (here with a log axis) is a useful reminder that when there are seismic moments in UK history they are invariably reflected in the value of the pound.
From devaluations to bailouts to ERM exit to BoE independence…
The last major shift? The EU Referendum. Image
Jul 2 26 tweets 8 min read
The inconvenient truth about climate change is that solving it will involve digging, blasting & leaching more minerals from the skin of this planet than ever before.
No one much likes to talk abt this.
But talk about it we must.
⛏👇 Why? Because tackling climate change is a multi-decade (poss centuries-long) effort.
Hushing up the trade-offs & costs may feel right today, esp if it helps galvanise change.
But it'll only fuel a bigger backlash in decades to come. Because eliminating fossil fuels is a HARD SLOG
Jun 23 13 tweets 5 min read
One of my favourite analogies about inflation is the one Karl Otto Pöhl came up with:
Inflation is a bit like toothpaste. Very easy to squeeze out of the tube. Very difficult to get back in once it's out.
Worth pondering this, because we're entering peak tube-squeezing period... One way of thinking about this is by splitting inflation into two varieties. This is a massive oversimplification but bear with me.
You've got:
1. Statistical inflation showing up in the data, fuelled, say, by energy price rises/covid/monetary policy, &
2. Psychological inflation
Jun 8 5 tweets 2 min read
I find this chart from the @OECD pretty disturbing.
At the very moment everyone is trying to diversify away from Russian gas, there’s a dearth of new supply coming online from liquefied natural gas.
Look at the years 2022, 2023, 2024.
This is a very, very BIG DEAL… The point here (and it’s one I’ve made before & folks like @rob_by_robwest have been banging on about for a while) is that we’ve been underinvesting in new energy capacity for a long time.
Govts have been talking the talk on the energy transition without actually delivering.
Jun 8 8 tweets 5 min read
- UK forecast to have the worst economic output in the developed world next year.
- British economy will flatline in 2023, says @OECD
- @OECD urges Chancellor to cut taxes or raise spending compared with current plans
Full story: news.sky.com/story/cut-taxe… Worth noting: the @OECD analysis already takes into account the latest set of measures (extra help with energy bills and windfall tax).
Here’s the relevant section from their Economic Outlook report today:
May 26 13 tweets 5 min read
A thread about @rishisunak’s cost of living bonanza.
Another non-Budget Budget.
Once again the Chancellor has chosen to give away a LOT of money outside of the non-formal fiscal events where he has to show his working.
So let’s read between the lines… First things first, will this make much difference to the average household?
Short answer: yes. Definitely.
As I say this is a LOT of money.
Consider the backdrop. This shows you the share of household spending on energy going back to 1957.
Here’s where we are now…
May 26 5 tweets 2 min read
After months of dismissing the benefits of windfall taxes, @rishisunak announces a “temporary targeted energy profits levy”.
Eg a windfall tax.
“But,” he adds, “we have built into the new levy a new investment allowance similar to the super-deduction.” New UK windfall tax on oil/gas companies will raise around £5bn of revenue over the next year.
Bigger than expected.
But prob not enough to cover the impending giveaways for households.
May 23 23 tweets 9 min read
Did you know where salt comes from?
Did you know how it's made?
Did you know how astonishingly important it is, not just for food but for our way of life even in the 21st century?
And did you know it's another staple item seeing unprecedented price rises?
👇More👇 Note: This thread is a kind of companion piece to the one about tomatoes 🍅from a couple of days back and is based on a deep dive I've done into the forces behind the rise in the cost of living.
You can watch the full thing here:
May 21 20 tweets 7 min read
What cherry tomatoes tell you about the cost of living crisis we're all going through.
Amid the wider consternation about inflation, perhaps you missed the fact that tomato prices are up 21% over the past yr - the fastest rate in over a decade.
Let's explore why... We'll begin here at Valley Grown Nurseries in the Lea Valley just outside London.
Here they make a LOT of the tomatoes and peppers you buy in the supermarkets each day under acres and acres of glass.
It's a pretty extraordinary place.
May 17 20 tweets 7 min read
Something seriously odd is afoot in natural gas markets.
There's a BIG glut of gas in the UK.
Wholesale gas prices are the lowest in 18 months.
There is so much gas no-one is quite sure what to do with it
Yet far from falling, household gas bills are heading even higher.
👇 Let's start with a chart of EU natural gas prices on the wholesale markets.
This is what you'd pay for gas delivered tomorrow.
The line here shows the main N European gas price, TTF in Netherlands.
It looks much as you'd expect. Down a bit from the invasion but still V HIGH
May 15 5 tweets 2 min read
It is increasingly clear the coming months/years will see the biggest test yet of @bankofengland independence. This story, on the front of today's Sunday Tel, is a sign of things to come. Such attacks will get even more fierce as it raises rates further.
telegraph.co.uk/politics/2022/… It's worth saying this is not, in any way, unexpected. Governments and central banks always clash during hiking cycles. We just haven't HAD a hiking cycle in ages.
Last year I wrote that we should prepare ourselves for something like this. news.sky.com/story/boring-b… Image
May 5 7 tweets 3 min read
@bankofengland warning:
- UK now heading for a recession, with GDP forecast to contract at the end of this year.
- Double digit inflation of just over 10% forecast later this year - highest since 1982
- Bank raises interest rates to 1%, highest level since 2009 Bank Governor Andrew Bailey:
“I recognise the hardship this will cause for many households in the UK, especially those on low incomes with little or no savings, who will be hit hardest…”
May 4 4 tweets 2 min read
Inflation across the developed world (eg the @OECD) is now running at an annual rate of 8.8% - the fastest rate since the late 1980s… In Turkey inflation is running at over 60%.
That is obviously very high indeed - highest in two decades.
But it’s not a record.
Highest recorded Turkish inflation rate in the past six odd decades was 125% in Jan 1995
Apr 19 5 tweets 2 min read
In first assessment of economic impact of Russia/Ukraine war, IMF says world must brace itself for:
- Econ slowdowns nearly everywhere
- Sharp burst in inflation
- Potential waves of social unrest as energy and food prices rise to intolerable levels
news.sky.com/story/ukraine-… IMF says the Russian economy will this year suffer its biggest economic slump since the aftermath of the Soviet Union’s collapse - primarily because of the sanctions imposed by Europe, the US and others Image
Apr 13 7 tweets 3 min read
Bank of England official inflation forecasts vs what actually happened. Now incorporating the latest @ONS data out this morning.
You get the idea. Part of reason economists have been so surprised (& continue to be so surprised) by rising inflation is they pay v v little attention to the importance of energy to the 21st century economy.
Yet energy is not incidental.
Look at GDP vs energy (chart: @amcafee)
Mar 28 14 tweets 6 min read
The @bankofengland governor said today that he thinks the energy shock this year could be worse than any single year in the 1970s.
Actually it could well be worse than that. Here’s why...
🧵 The first thing to note is that prices are yo-yoing around a lot. In the end the energy price cap in the UK (which determines max bills) depends on wholesale prices in the preceding months. Here’s what’s happening to wholesale gas prices.
Mar 27 22 tweets 6 min read
Even amid a stream of horrifying pictures from Ukraine, there was something especially sickening about the sight of Mariupol, captured in drone footage last week. A charming port city obliterated by Russian bombs. Looks like near total destruction
The stories about human devastation and lives lost are heartbreaking. But for a small group of scientists in Ukraine and beyond there is an added horror to these pictures. Something else may have been lost here. Something that could affect us all.
Mar 26 7 tweets 5 min read
This is economic war.
A short @skynews film about the financial battle raging as troops fight and citizens flee in Ukraine. And how it might change the world forever.
Feat. @LauBooneEco @adam_tooze @FukuyamaFrancis @FraGiumelli The scale, breadth and speed of financial measures against Russia goes beyond anything we've seen before. Acc to @FraGiumelli some of them go further that those we imposed on Nazi Germany in WWII. All told, we are in new territory. Feature: news.sky.com/story/ukraine-…