Against the Grain: Why the rest of the UK is failing to keep up with London’s explosive growth October 29, 2013 BRITAIN’s economic recovery is now firmly established. Output in the services sector, the largest part of the economy, has risen above its previous peak, reached before the crash in 2008. There is a widespread myth that the recovery is fuelled by debt-financed personal spending. Yet since the trough of the recession in 2009, the economy [...]
Rising fuel costs: The real trigger behind the 2008 subprime crisis October 29, 2013 FIVE years on, and academics and journalists are still attempting to explain the US subprime loan crisis that, in September 2008, caused the collapse of Lehman Brothers and apparently triggered the global economic crisis. But an important factor in understanding what happened is missing: energy prices. In November to December 1998, a barrel of oil [...]
Letters to the Editor – 30/10 – HS2 flaws, Housing mobility, Best of Twitter October 29, 2013 HS2 flaws [Re: FTSE bosses lose faith in HS2, yesterday] That half of the surveyed FTSE 100 bosses are now against HS2 further underlines why the project has deep faults. The business case for HS2 is flawed, highlighted by the government’s own report, which lowered the expected benefit-cost ratio and revised an assumption that business people [...]
Ignore the cranks: Orthodox economics can account for the 2008 financial crash October 28, 2013 ONE OF the more annoying false memes of recent years has been the notion that standard corporate finance models have not worked in or since the 2008 financial crisis, and that no orthodox economics account of that crisis has been offered. As someone who implements standard finance models, and has written orthodox economics accounts of [...]
Technology has caught up with the BBC and the licence fee is now indefensible October 28, 2013 CONSERVATIVE Party chairman Grant Shapps has placed a question mark over the BBC’s licence fee funding model. In Shapps’s view, the Beeb needs to get its house in order before its Royal Charter is renewed in 2016 – to restore trust following the Savile affair and to salve public annoyance at executive payoffs. If it [...]
Rational self-interest: Why helping yourself is key to helping others October 28, 2013 IT USUALLY begins with Ayn Rand,” author Jerome Tuccille once wrote. He’s not wrong. An amazing number of people come to support a free society and a free market economy after reading Rand’s novels – especially The Fountainhead and Atlas Shrugged – in their student years. But then her novels have what young people want. [...]
Letters to the Editor – 29/10 – Failing reforms, Best of Twitter October 28, 2013 Failing reforms [Re: Welfare reforms rolled out in London today, yesterday] The thinking behind Universal Credit is well-intentioned: to simplify our complex tax credits system, while incentivising people to take up work. But its execution is doomed to fail, not because of bungling at the Department for Work and Pensions, but because it aims to have [...]
Defective regulations are pushing up energy prices as competition suffers October 27, 2013 ENERGY prices keep rising. Prime Ministers and energy ministers, past and present, all propose their own solutions, although there is little agreement on the cause of the problem. The latest proposal is an annual competition audit by energy regulator Ofgem, with input invited from the Office of Fair Trading. It will look at prices, profits [...]
City Matters: Celebrate the soft power underpinning London’s economic fundamentals October 27, 2013 OVER the past twelve months, we have seen the UK economy, London and the City move towards a healthier position. The UK economy expanded by 0.8 per cent in the third quarter, the IMF has significantly raised its growth forecast for 2013 as a whole, London businesses feel more optimistic than at any time since [...]
We can thank Britain’s services industries for powering the recovery October 27, 2013 AS EXPECTED, the latest GDP figures show that the UK economy grew healthily in the third quarter of this year. All the main sectors – services, manufacturing and construction – contributed to growth for the second quarter in a row. This provides some reassurance that the recovery is broad-based, and that the momentum will continue [...]