How hidden taxes and levies are pushing up UK house prices July 21, 2013 BRITAIN’S housing market is broken: inane planning rules mean that not enough new homes are being built. Growing demand (in part bolstered artificially by the coalition’s silly funding for lending and help to buy policies) combined with a supply that is growing only feebly is pushing up prices in and around London and risks turning [...]
We must urgently fix Britain’s horribly broken housing market July 18, 2013 IT’S called the law of supply and demand, a basic concept that Labour and coalition politicians sometimes find difficult to grasp. If you try to mess with it, it ends up biting you, and hard. Take residential property. In a free market, if the price for something goes up, people tend to produce more of [...]
Welfare state needs reform to avoid a long-term fiscal crisis July 17, 2013 THERE is no better way to get depressed than to study the Office for Budget Responsibility’s long-term forecasts for the British economy. I’m sorry to have to write about this on such a beautiful summer’s day, but it’s a disturbing and crucially important story. The biggest danger is that our ageing population will push up [...]
Time to stop under-reacting to scandals in the public sector July 16, 2013 GOOD intentions are never enough – and in most cases, they don’t even matter. That is one of the central lessons of economics: with the right institutions, including proper property rights, the rule of law and no artificial distortions imposed by politicians, self-interested behaviour in a market economy tends to bring about the common good. [...]
Negative interest rates are the last thing the economy needs February 26, 2013 JUST in case anybody was still in doubt that yet more quantitative easing (QE) and extraordinary monetary measures are on the cards, Paul Tucker, the Bank of England’s deputy governor, could not have been any clearer yesterday. He even raised the prospect of the Bank of England imposing negative nominal interest rates, at least on [...]
Study Italy’s election: It is the shape of things to come in UK February 25, 2013 ITALY has spoken. Few in the City like what they are hearing, but they should listen carefully. Bond yields, which had fallen when it was thought the centre-left was cruising to victory, shot back up when it emerged that Silvio Berlusconi and a new, populist protest party were doing well. This bitterly divided vote is [...]
Loss of UK’s AAA-rating will intensify the pressure on sterling February 25, 2013 GIVEN George Osborne’s failure to cut spending enough, his wrong-headed decision to rely primarily on tax hikes during the first years of his austerity plan and his inability to push through growth-enhancing reforms, the UK’s loss of its AAA rating had long become inevitable. The rating agencies have made lots of silly calls in the [...]
Britain: a case study in low-growth economic mediocrity February 22, 2013 BRITAIN is stuck in a rut. No wonder that investors and credit rating agencies are losing patience: the coalition doesn’t have the guts or decisiveness needed to jolt the UK out of its present mediocrity, while the opposition is busy dreaming up new taxes, thinks that a slightly looser fiscal policy would transform our prospects [...]
The only great British economic success story of recent years February 21, 2013 BRITAIN is, as ever, a country of contradictions. On the one hand, the pound is tumbling as the global markets begin to worry about our future, the budget deficit is increasing – not least because George Osborne got £1.2bn less than expected from the sale of 4G licences – real wages are falling at an [...]
Time to take drastic action to reboot Britain’s feeble economy February 19, 2013 So what, exactly, could the chancellor do to boost growth? He is, of course, hamstrung by two conflicting realities: the fact that the budget deficit remains huge, and may even increase this year, as well as by the realities of coalition politics. But unless he changes course, and is willing to take a major risk, [...]