Scottish Nationalist Dreams Undercut by Low Oil Prices

Sobering figures about Scotland’s economy are emerging as the country prepares for its upcoming referendum on independence, scheduled for 18 September 2014. Briefly put, the British and Scottish governments spent over £65 billion north of the Border in 2012-13, buttaxes raised just £53 billion. Scotland’s deficit – the difference between spending and taxes raised north of […]

UK Economy: Puzzling Export Weakness

One strong feature of business surveys, for both manufacturing and services, has been the strength of export orders. None of this strength is, however, reflected in the official export numbers, the trend in which remains as flat as a pancake. There are some compositional factors in this – the widening of the overall trade deficit […]

UK Economy: Time to Talk About Productivity

The UK’s 2014 budget, due to be released on March 19, will be the latest in a very long line. I say that with enthusiasm even though I have covered enough to last a lifetime. And were I to say how many of them were genuinely memorable, the answer would be a rather small number. […]

UK: There’s Still No Money Left for Tax Cuts

Where is all the pre-budget speculation? In just 10 days George Osborne will deliver his fifth budget and there has been so little fuss you could be forgiven for thinking it had been cancelled. Even the Treasury seems reluctant to talk about it. Actually, as I shall come onto, it might be no bad thing […]

High Road, Low Road

Among the many thorny issues that would arise if Scotland were be become an independent nation is the question of its choice of a currency. The first minister of Scotland claims that an independent Scotland would continue to use the pound. But Mark Carney, the governor of the Bank of England, has raised several caveats and stipulations—including […]

Treasury Pulls the Rug From Scottish Independence

The all-party agreement (in Westminster) on ruling out a currency union with Scotland took some by surprise, but the reasons are now clear. The Treasury has come out strongly, and publicly, against it, and says that Scotland’s threat not to take on its share of UK debt is not credible. This is a bigger blow […]

BoE’s Fuzzy Guidance Sets Path for Higher Rates

A few years ago I developed a theme, which I used more than once in books, and often in talks, called the seven ages of monetary policy. The story started in 1976, with the International Monetary Fund imposing monetarism on a reluctant Labour government and reached its seventh phase in the Eddie George/Mervyn King era […]

Look for Market to Push Back Against Bank of England

The Bank of England’s Quarterly Inflation Report will be released tomorrow, followed by comments Governor Carney.   He is expected to signal that despite the 7.0% unemployment threshold being approached, the recovery needs to strengthen and there is sufficient spare capacity to allow this to happen without posing inflation risks.  Interest rates can stay low for […]

UK: Better News on Trade

We know net trade made a positive contribution to growth in the first and second quarters of 2013 but not (dramatically) in the third. Today’s trade figures siggest it will have done so in the final quarter of the year. These were the details: The deficit on trade in goods and services narrowed to £1 […]