Independent economist. Likes data and charts. IEA Economics Fellow. Schools speaker. FRSA. Brexit optimist. 'Market monetarist'. Own views, etc. I fund myself.
Mar 22 • 4 tweets • 2 min read
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)
Jan 14 • 10 tweets • 4 min read
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...
Jun 11, 2021 • 6 tweets • 2 min read
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)
Jun 11, 2021 • 6 tweets • 4 min read
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)
Dec 23, 2020 • 14 tweets • 8 min read
📢 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…
Dec 3, 2020 • 12 tweets • 4 min read
FWIW, I’m relatively relaxed about the fiscal costs of #Covid: borrowing will drop sharply as the economy recovers, the #debt burden is manageable, and there’s no need for #austerity to pay for it.
But this isn’t a green light to abandon fiscal responsibility altogether… (1/12)
For a start, the long-term outlook is more worrying.
The #OBR’s Fiscal Sustainability Report (July) includes scenarios where unchecked increases in public spending on health, adult social care and pensions could see debt balloon to more than 400% of GDP in 2070... (2/12)
Nov 28, 2020 • 19 tweets • 4 min read
I’ve read some utter tosh on the state of the UK public finances in the last few days. Here's an attempt to correct some of the biggest misunderstandings.
Most importantly, government debt does not have to be ‘repaid’, only serviced... (1/19)
As long as the government can meet the interest payments (I’ll discuss the risks here later), maturing debt can simply be rolled over. (2/19)
Nov 27, 2020 • 8 tweets • 5 min read
FWIW, I’ve been comparing my UK economic forecasts with those of the #OBR. There is a much more positive story than the Chancellor told in Wednesday’s #SpendingReview#SR20 📢
Let’s start with the near-term outlook… (1/8)
The #OBR assumes that the economic impact of #lockdown2 will be ‘three-fifths’ that seen during the first lockdown, when #GDP fell by 25% in March and April. This means that lockdown2 would take the level of #GDP back to 15% below its pre-Covid peak… (2/8)
Mar 14, 2020 • 7 tweets • 4 min read
I see some are arguing that the economic hit from #coronavirus means we should now extend the #brexit transition period (or even #rejoinEU 🙄). They typically make up to four points – but none of them seem at all convincing… (1/6)
First, that it's now much harder for UK and EU negotiators to travel and meet in person. But so what? This is the age of video conferencing and the internet, and we can surely work around this... (2/6)
Dec 11, 2019 • 14 tweets • 6 min read
If Jeremy #Corbyn becomes PM on Friday 13th, here's my rundown of 13 of #Labour’s worst policies which will hurt many, not just the few.
PS. I could have chosen a completely different 13, and these are in no particular order… (thread)
#GeneralElection191. Expropriating up to 10% of the value of corporate equity. Employee share ownership is usually a good thing, but dictating the terms would deter job creation and investment, and encourage firms to relocate overseas. More explanation here... capx.co/the-10-share-p…
Dec 2, 2019 • 4 tweets • 3 min read
The main users of railways are commuters, who are relatively well-off and most likely live or work in London and the South East. So cutting #railfares by 1/3 would increase both income #inequality and regional inequality.
(snips from factsheets here: gov.uk/government/sta…)
To be fair, distributional impact also depends on how lower #rail fares are funded. Higher taxes on car ownership and/or use might even the impact out a little, and could be better for the environment, but plenty of poorer people rely on cars too.
Oct 29, 2019 • 11 tweets • 3 min read
Calls for #Votesat16 in all UK elections are widely seen as trendy and progressive. But their arguments are seriously flawed. Extending the franchise without proper debate and preparation would actually be deeply undemocratic... (1/11)
Most 16-year olds are still children living at home and going to school. There is enough pressure on them already. Just imagine the online barrage of political advertising they would face. Their votes are also more likely to be susceptible to influence by their parents. (2/11)
Aug 14, 2019 • 6 tweets • 4 min read
Confirmed: German #GDP also fell in Q2, by 0.1% q/q. Indeed, German GDP is now only 0.4% higher than a year ago, compared to growth of 1.2% in the UK. The equivalent figure of 1.1% for the euro zone as a whole is now likely to be revised down too... (1/4)
The original timing of #Brexit played a part in the fall in German GDP in Q2 too, as activity (eg exports to UK) was brought forward to Q1. But Germany is also more exposed to global trade wars and the #auto crisis, and worried about its currency becoming too *strong*... (2/4)
Jun 27, 2019 • 4 tweets • 4 min read
Beware the latest dire warnings about the impact of #Brexit on the #tech sector. Main fear seems to be the impact on skilled #migration from the EU, but this would be entirely in the UK government’s hands to manage. Tech is also one of the most global of industries... (1/4)
The UK’s advantages as a location for #tech investment are also largely #Brexit-proof or might actually be strengthened by leaving (e.g. chance to escape some of the crazier regulations). Loss of EU official funding is a red herring too, since the UK is a net contributor... (2/4)
Jun 11, 2019 • 6 tweets • 4 min read
FWIW, here are my subjective rankings of the #ToryLeadershipContest#tax cut proposals. (This is a personal view only - I don’t have a dog, or even a vote, in this fight.) In reverse order… (1/6)
No. 5 (i.e. last). Reform #VAT and replace with a sales tax (#Gove). Bad economics. VAT is a relatively efficient tax and the current system already allows the UK gov’t to set lower rates for some goods and services to help the poor. #Brexit will increase this flexibility. (2/6)
Jun 9, 2019 • 9 tweets • 4 min read
A lot of guff today (only a little of it from Boris!) on the £39bn #Brexit ‘divorce bill’ which the UK is expected to pay as part of May's deal. The key point is that the £39bn is meant to honour commitments *already made* during the period of the UK’s membership... (1/8)
It is therefore simply wrong for #Remainers to claim that the £39bn is a ‘cost’ of Brexit that we could avoid by staying in (and that it should have been on the side of a bus too). In reality, the £39bn is money the UK would have had to pay anyway, even if still a member… (2/8)
Nov 9, 2018 • 5 tweets • 3 min read
According to the ONS, the #GenderPayGap has continued to fall this year and is now at a record low. Despite this, '#EqualPayDay 2018’ has remained at 10th November - the same date as each of the past two years. That’s the first clue there's something fishy here... (1/5)
This is because, instead of comparing median wages (the number in the middle), the Fawcett Society uses the mean (the average of all the data). This has the effect of giving more weight to the incomes of a relatively small number of high earners at the top of companies... (2/5).
Jul 16, 2018 • 8 tweets • 3 min read
Here are six of the most ridiculous claims from #ProjectFear about the impact of a clean #Brexit on businesses, prices and jobs. I’m paraphrasing to make my points, but all are staples of the #Remain camp. (1/8)
Myth 1. Businesses have become so reckless that they now rely on fragile just-in-time supply chains where even the slightest new friction would be catastrophic, and it would be impossible to adapt them without the massive disruption of relocating. (2/8)