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Moving to Substack

Thank you for being a subscriber to this somewhat infrequent and random blog. This is a quick message to let you know a couple of things. The first is that I now have a UK publication date for my forthcoming book, Material World: June 15. Woo-hoo! Feel free to pre-order

The strange tale of the North Sea Link

I honestly had no intention of writing a second consecutive article about an obscure energy link no-one’s ever heard of, but then something happened that drew my attention to the North Sea Link. I promise it’s more interesting than it might at first sound! The North Sea Link

The Single Market Britain never left

Not long after the UK voted to leave the European Union in 2016, it transpired that Theresa May’s new government had determined that this would mean leaving the single market - the economic deal at the heart of EU membership. It’s worth noting in passing that this was

Britain’s electricity grid is creaking. This is not good news

This is a post about arguably the most important & underdiscussed issue as we push towards net zero. The UK electric grid is creaking - big time. It could trigger blackouts & even get in the way of those climate ambitions. This is a very big deal. But let’s

No-one played a blinder here

At some point amid the chaos and political drama of Friday afternoon I had a snatched conversation with someone from the world of politics. Liz Truss had just fired Kwasi Kwarteng and admitted, in a slightly excruciating press conference, that her corporation tax freeze would need to be ditched, and

Liz Truss wanted to kill Britain’s Deep State. Instead she’s given it a new lease of life

At the height of the market mayhem of the past few weeks, someone who used to work in government sent me a half-jokey message. As the pound tumbled and bond yields spiked, the person wrote that this was a pretty good example of what happens when you take on the

Blimey

I had been meaning to write something here for a couple of weeks but… it’s been busy. Hard to know where to start, really. I’ve reported on a fair few financial crises in my career. Some of them have affected this country. But nothing quite like this: a

Rising interest rates are a bigger deal than you might think

I’m a bit worried people are being WAY too complacent about rising interest rates. They assume that because they’re so low now vs the 1990s, this’ll be a walk in the park. NO. Let’s start with this chart. Outlook for interest rates has changed enormously in

Growth: What’s not to like?

Somewhere amid the plentiful coverage of the latest Conservative government’s push for “unashamedly pro-growth” policies there has lurked an assumption: that this is what all governments want anyway. Every Chancellor going all the way back decades - from Barber and Lawson to Osborne and Sunak - has wanted economic

Value, Importance & Tomatoes 🍅

I wrote something for today's Sunday Times. The theme won’t come as much of a surprise if you’ve read a few of my other recent pieces here: that solving the current energy crisis and for that matter hitting net zero is a lot more complicated (and

50 Economics Ideas: New Edition

A long time ago (well, about a decade and a half) I wrote a book about economics. Nothing fancy, nothing especially advanced. Just the kind of duffer’s guide I would have liked to have had at my disposal if I were starting out again. When I started out in

The long and winding story of Newport Wafer Fab

The tale of Newport Wafer Fab is a parable for our times. It tells you everything you need to know about * The 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

Lithium, Copper, Chile and the Net Zero Age

The unpalatable reality is that getting to net zero will involve far more mineral exploitation than ever before.

How Russia bossed the room at Bretton Woods

Earlier this week Russia essentially vetoed [https://www.reuters.com/world/imf-steering-committee-will-skip-communique-after-russia-blocked-consensus-2022-04-21/] the joint agreement at the IMF’s spring meetings - one of the most important policy documents of the economic calendar. Most of the members of the IMFC, the main IMF committee, had wanted to use the statement

Jelly rolls and coking drums: a bottom-up look at batteries 🔋

I’ve spent a lot of the past few months thinking about batteries, which turn out to be one of the most fascinating topics in modern economics. Here’s a film I’ve made for Sky News about it. Please do watch it! The main problem I had while researching

The thing we're trying to escape is the thing we need to help us escape

Long before he was famous for sexual misconduct, Louis CK was famous, at least in some circles, for having given voice to one of the funnier commentaries on technology and the economy: “Everything’s amazing and nobody’s happy”. You get the overall point: the minute a certain technology is

The curse of big numbers

There are many irritating things about the world of politics and economics but perhaps the most irritating of all is something I like to call numberism. The term might not be familiar but you will almost certainly know what I mean. Numberism is when politicians take a big number and

Unjolly hockey sticks

Someone asked an interesting question at the Institute for Fiscal Studies’ post-Budget briefing yesterday: have we ever seen a squeeze in real earnings like the one we’re currently experiencing? The question matters because real earnings are one of the most important barometers of the economy’s health. During the

Woods, trees and spending reviews

It’s been a long time since we’ve had a proper spending review in this country - and by “proper spending review” I mean, something which actually sets the course of government policy for more than a year. These events are often overshadowed by the Budget, which is where

The industrial re-revolution

Economists are obsessed with the industrial revolution. And when I say obsessed I mean obsessed. The more economic history you read (and I read quite a lot) the more you realise how much of it is really about the industrial revolution - even when those words are nowhere in the

Climate change: why isn't government putting its money where their mouth is?

Let’s begin with a question. How much would you say governments around the developed world spend on research into energy? They certainly talk about it rather a lot, from Joe Biden to Boris Johnson (and for that matter from Barack Obama to David Cameron) they have talked continually about

Low skill economy? More like wrong skill economy

I was chatting to a Dutchman the other day who said if he was choosing anywhere to live in Europe, it would be Britain. Why, I asked? Because, he said rather unexpectedly, of Britain’s education system. In the Netherlands and much of mainland Europe, he said, university students tended

We need more maps

Were it not for a mapping error, or rather a series of them, Christopher Columbus might never have sailed for America. When he set out across the Atlantic in 1492, the Italian explorer did so confident in the understanding that provided he headed in a roughly straight line westwards from

Energy and Inflation: A Series of Unfortunate Events

Sellindge is a village in Kent just off the A20 between Ashford and Folkestone. It is so small - just over 1,000 inhabitants - that most people barely notice it as they speed down towards the English Channel in their cars or on the Eurostar. But if you were

Everything is always more complicated than you think, COVID edition

One of the big economic and social stories of the past year is that for the first time since WWII the UK’s population is shrinking. I did a report for Sky News about this earlier on this year [https://news.sky.com/story/the-three-forces-at-play-that-raise-serious-questions-about-this-years-census-12250750] , a film of which you

Rare earths: everything you ever wanted to know

Or rather: everything you never really wanted to know but certainly ought to know, especially since the device you're reading this on almost certainly has rare earths in it

The most underrated material in the modern world

Concrete. A blot on the urban landscape, right? Boring, ugly, lifeless and destructive, right? Well hold on. Because here are a few reasons why concrete is actually surprising, dynamic & incredibly complex. And not just that: it is one of the most overlooked cogs in the modern machinery of civilisation.

Why Joe Biden’s tax proposals are a big deal

I’ve just written a column [https://www.thetimes.co.uk/article/joe-biden-is-taking-on-the-tax-havens-and-china-nkwjg0w3m] about something which is, or has the potential to be, enormously important: the US Treasury’s plans to reform business taxes. But as is often the case, I’ve had to compress large parts of the stuff

Mind the (housing) gap

Britain’s housing market has long been more complicated than anyone would like to admit. There is, we are told, a terrible housing shortage. Yet large parts of the country have so many vacant houses that they are being dismantled. We are told there is a disastrous gap between London

Notes, railways and bitcoins

Is it only a matter of time before central banks nationalise cryptocurrency? I ask the question because if you look back through history it feels like one plausible chain of events. And for a long time when people asked me about the long term fate of things like Bitcoin I’

Bitcoin, money and the planet

I want to start with a story about a new, exciting form of money. It is a financial technology which promised to change the world, making it easier for people to transact with each other. Unlike other forms of money, which could be easily debased, driving up inflation and potentially

Is this worst pandemic in British history?

The short answer is no. In terms of the numbers of people dying, this is not yet Britain’s worst pandemic. It’s not yet worse, in terms of deaths, than the worst weeks of the Hong Kong flu epidemic in the late 1960s and early ‘70s. It is almost

Why is Britain's COVID-19 economic response not hitting the spot?

Earlier this morning Business Secretary Alok Sharma was grilled by Sophy Ridge about how many loans the Government’s new COVID-19 emergency lending facility had actually handed out. His answer? Here’s the funny thing about this. You or I may hear that so far only 4,200 of these

Coronavirus charts - your questions answered

Each day I’ve been updating a chart showing the UK’s trajectory through COVID-19. Since each time I do so there are frequent questions- why are you choosing this measure? why are you using that odd axis? etc etc – I figure rather than repeating them daily on Twitter it

Bretton Woods: could we do it all over again today?

A few years ago I wrote a book [https://www.edmundconway.com/books/thesummit/] about the Bretton Woods conference of 1944. The conference was one of those rare things: a moment where countries came together to fix long-standing problems that had bedevilled the global system for years. The imbalances between

What are the best ever economics songs?

The Bank of England’s chief economist, Andy Haldane, reckons economists should pay more attention to the music people are listening to on Spotify [https://www.bankofengland.co.uk/-/media/boe/files/speech/2018/will-big-data-keep-its-promise-speech-by-andy-haldane.pdf] [pdf]. He wonders whether that might provide better clues for how optimistic or

Jeremy Hunt channels Enoch Powell

The latest rumour going around Whitehall [https://www.telegraph.co.uk/politics/2018/04/24/jeremy-hunt-open-introducing-nhs-tax-say-cross-party-group-mps/] is that Jeremy Hunt might favour converting National Insurance into a specific NHS tax – or at least devoting more of it to funding health, an idea being kicked around by some MPs [https://news.

Does China really have bigger trade barriers on cars than the US?

Where better to start than with this: > When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%

The really embarrassing thing about Labour's police plans is not Diane Abbott's gaffe. It's that they simply don't add up

The news coverage about Labour’s plans, announced today, to recruit an extra 10,000 police officers [http://news.sky.com/story/labour-promises-10000-more-bobbies-on-the-beat-10859910] , has been dominated by the agonising interview given by Diane Abbott to LBC’s Nick Ferrari, in which the shadow Home Secretary seemed to forget how much

Ditching the triple lock is no silver bullet for the pensions crisis

The odd thing about the triple lock – the pensions formula which has become so expensive that the government is now considering ditching it – is that it was never expected to be all that costly. When the coalition government introduced it in 2010, their models suggested it would rarely get triggered.

More than a u-turn. Why Philip Hammond's reversal on National Insurance matters

It is difficult to know where to begin. There is nothing new about u-turns from Chancellors – Lord knows George Osborne did enough of them. But Philip Hammond’s volte face on National Insurance must surely go down as one of the most screeching and humiliating in years. Mr Osborne took

The real powerhouse of the UK economy

Which of the following sectors would you say has made the biggest contribution towards UK economic growth over the past two years: manufacturing, banking or domestic workers, such as cleaners and nannies? The answer is domestic workers. That’s right: “Activities of households as employers of domestic personnel”, which means

The Autumn Statement in seven charts

As Autumn Statements go, this was both thick and thin. Thin in terms of the number of pages in the document itself – a mere 64 of them, which makes it more of a pamphlet than a major fiscal document, about half the length of its predecessors. But in terms of

The Why, not the What. Could we Brits learn something about exit polling from the Americans?

Who voted for Brexit and why? Did the Leave vote ultimately come down to a battle between old and young? Was it largely down to the white working class or was it a wider movement? Was it motivated by people’s dislike of EU laws, of regulation, or of free

The dangers of the R word

Even if you weren’t following the referendum campaign closely you’ll probably remember a few of the economic highlights (lowlights?): the Vote Leave £350m bus; the “punishment Budget” and George Osborne predicting that there would be a recession if Britain left the EU. Now we know that all three

The elephant (not) in the room

At the time of the Bank of England’s interest rate decision, no-one in the room knew who was going to be Britain’s new Chancellor. This might seem like an odd thing to mention, given right now the main story people will be obsessing with is the element of

An illustrated history of the pound sterling 1791-2016

I tweeted this [https://twitter.com/EdConwaySky/status/748137482013786112] the other week but thought it might also be useful to plonk onto the website. An annotated chart of the pound vs the US dollar over the past few centuries. Click on it for a bigger version.

Two hours...

That was how long the Chancellor’s message of reassurance to market investors lasted today. George Osborne resurfaced at the Treasury just after 7am to tell investors that the UK economy remains strong, to assure them and households that he would take all necessary contingency plans to deal with the

What the...

Here are some initial stream-of-consciousness thoughts. Apologies if they’re a bit incoherent. This much we know: today is already one of the most extraordinary and volatile days in UK economic history. For the time being, leave aside, if you can, all your questions about the future of the United

Anatomy of a scare story

The frustrating thing (well one of the many frustrating things) about the EU referendum campaign is that all too often some of the numbers spurted out by both sides simply aren’t interrogated. There are a few eye-catching exceptions: the Government’s claim we’ll all be £4,300 worse

How the Treasury's model suggests the UK could grow faster outside the EU

Strange as this might sound, under the Treasury’s post-Brexit economic model it’s conceivable that the UK economy could, for a period, grow faster outside the EU than inside. Let me explain why. If you were reading this blog yesterday you’ll recallmy point [https://www.edmundconway.com/2016/

Why is the Treasury ignoring arguably the most likely post-Brexit deal?

If you follow these things, you may recall that last month, when the Treasury produced its analysis of the long-term impact of Brexit [https://www.gov.uk/government/publications/hm-treasury-analysis-the-long-term-economic-impact-of-eu-membership-and-the-alternatives] , it furnished us with three potential scenarios: 1. that Britain leaves the EU and remains in the European Economic Area

The most telling chart from the Treasury's Brexit report

What is the EU? Not all that long ago, we all knew the answer. These days, what constitutes Europe has disintegrated so dramatically that the beginnings and ends of Europe are extremely fuzzy. Consider the following chart from the Treasury’s Brexit report [https://www.gov.uk/government/uploads/system/

Probably right, definitely not accurate. The Treasury on the impact on Brexit

Economics is an art masquerading as a science. Always has been, always will be. An economic model looks complicated, full of factors and equations, but it is invariably balanced on a bunch of assumptions that are, if not plucked out of the air, then at the very least guesstimates. Art

Why the Bank of England is closer to a cut than you might think

Watching the Bank of England is an exercise in what old Cold War hands used to call Kremlinology. Because Moscow never used to make open statements about its plans, the only way to get a sense of its future actions was to watch the smoke signals coming from the Kremlin,

The real story from the Panama Papers: tax havens are already imploding

Somerset Maugham once famously described Monaco as “a sunny place for shady people”. But the truth is that Monaco, along with most of the old, traditional tax havens, is no longer quite as shady. If you really want to hide money, no questions asked, the likelihood these days is you’

Steeling ourselves for trouble

Here’s a nugget that goes at least some of the way towards explaining the current woes of the British steel industry: in the past two years alone China has produced more steel than the total cumulative output of the UK since the industrial revolution. Or consider this: at today’

Bank of England warns on Brexit/says Brexit manageable [delete as applicable]

There was a wee flurry of excitement in Westminster shortly after 11am this morning when the Bank of England released the statement from its latest Financial Policy Committee [http://www.bankofengland.co.uk/publications/Documents/news/2016/032.pdf]. Some people campaigning for the Remain camp saw the following passage

The unexpected victims of the coming buy-to-let crunch

For me, the most striking thing I learnt from the Bank of England today wasn’t that the buy-to-let market is looking a little bubbly. I wasn’t surprised that BTL accounts for such a large and growing chunk of mortgage lending, as per this chart: [https://i0.wp.com/

How to fill the PIP hole?

Now what? The Government has signalled an embarrassing (not to mention expensive) u-turn, reversing its cuts to Personal Independence Payments – the disability benefit scheme. Leaving aside the enormous political questions [http://news.sky.com/story/1663944/pm-absolutely-has-confidence-in-osborne] for the time being, how on earth will it afford it? We have

A Tale of Two Budgets

This is a tale of two Budgets. The first is the one you heard about from George Osborne in the House of Commons today; the second is the one going on underneath the surface – the one he didn’t want you to see. The first Budget – the one Mr Osborne

Four charts to digest ahead of Budget 2016

Ahead of this year’s Budget here are some of the key numbers, and charts, to keep an eye on. First, here’s total government spending The big picture. One question is whether the extra spending cuts George Osborne imposes bring the total government spending figure down to the lowest

Some (outlandish) last-minute ideas for Budget 2016

The conventional wisdom is that tomorrow’s Budget will be a damp squib, and if you take a moment to consider the constraints facing the Chancellor, you can probably understand why everyone’s so convinced of this. You’ve got George Osborne’s (silly [http://www.thetimes.co.uk/tto/

Which EU countries have had the most asylum seekers?

One can answer the question a few different ways. First off you can look in simple terms at the number of applications per country. You get a chart that looks like this: However, if you want to get a sense of the degree of social impact caused by the influx

Household debt to income levels around Europe

Many UK readers might have assumed that British households were the most indebted in Europe, if not the world. Not so. The following chart shows you gross household debt levels in comparison with income across selected EU countries. As you can see, far from being at the top of the

Which European countries read the most?

Courtesy of Eurostat, here is a selection of countries and the proportion of people who say they have read a book in the past year. Sweden, Luxembourg and Germany at the top; Romania and Turkey at the bottom.

Are George Osborne's plans to kickstart housebuilding finally starting to work?

Last year there were more new homes constructed in England than in any year since 2008, according to newly-published figures from the DCLG [https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/502930/House_Building_Release_Dec_Qtr_2015.pdf] . This is good news but, as you can

The new new normal

It says something about the state of the world economy that as of the latest data Britain was the G7’s fastest growing economy in the final quarter of 2016. With growth of only 0.5%. And yet that is the world we now seem to be living in. One

Did George Osborne's tax cuts contribute to record UK current account deficit?

Not all that long ago the International Monetary Fund was one of the biggest critics of UK economic policy. Back in Gordon Brown’s day the Fund constantly warned him about overspending [http://news.bbc.co.uk/1/hi/business/3333125.stm]. George Osborne was told that his policies amounted

Prepare yourself for 120 days of nonsense

Actually that slightly understates it – more like 122 days, and the nonsense is likely to continue for some time afterwards. That’s because when people talk about the EU they tend (and this is both the pros and cons) to spout nonsense. In an effort to fight off some of

Interest rate cuts: Mark Carney shifts his stance

Now the following may seem a little pedantic, but in the world of central banking, where small smoke signals are everything, it’s significant. A few weeks ago I asked Mark Carney a pretty simple question at the Inflation Report press conference (transcript here [pdf] [http://www.bankofengland.co.uk/

A couple of charts on UK-EU trade

Two charts to mull over in relation to Britain’s relationship with Europe. First, note that in pure goods trade terms (and mostly when people talk about exports they tend to talk about goods), the EU is becoming less important to Britain. Back in 1998 about 60% of Britain’s

State of the housing market, 2015 edition

The English Housing Survey [https://www.gov.uk/government/collections/english-housing-survey] is one of the best and most comprehensive surveys on the state of the housing market (by which I mean not house prices but trends in occupation, number of homes and so on). It was almost shut down as

So is this full employment?

It all started with a question.Why do our employment figures only go back to 1971?After all, if the latest data [http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/february-2016/statistical-bulletin.html] released by the ONS is to be believed, the employment rate is now, at 74.1%

Happy 1936, sorry 2016

Here’s something that isn’t often mentioned these days. The world economy is currently doing worse, seven and a half years after the crash, than it was at the same stage of the Great Depression. If at first that sounds improbable, consider the graph below, from a paper by

The Spending Review/Autumn Statement in two charts

I had planned to make this the story of the Autumn Statement and Spending Review in five charts, or maybe ten charts(we journalists tend to like to do things in round numbers) but I think you can actually tell the story in only two charts. Before we get onto

The most unfulfilled manifesto in history?

If the proposals tabled by Greece at yesterday’s Brussels summit are anything to go by, Syriza will have to make so many u-turns on its election promises that its 2015 manifesto may go down as the most unfulfilled in modern political history. On that basis, I’ve decided to

When crunch talks go wrong

It’s a little-known fact that John Maynard Keynes was dosed up on mind-altering drugs when he carried out one of the most important economic negotiations in British history. The ageing economist was suffering from heart disease when he was sent away to secure Britain’s post-war loan with the

IMF crisis echoes

The economy in crisis. Capital markets in revolt. Half of all under-25 year olds out of work. A left-wing government in office, with Marxist ministers determined to re-nationalise every major industry. And a deeply unpopular bailout from the International Monetary Fund. No, I’m not talking about Greece today, but

Why is David Cameron so keen to talk about the possible collapse of the euro? Two theories

Strange as this might sound, the most interesting thing about Downing Street’s decision to hold a meeting this morning [http://www.telegraph.co.uk/finance/economics/11400234/David-Cameron-plans-contingencies-for-UK-Grexit-risks.html] on the prospect of a Greek euro exit has nothing to do with the meeting itself. As it happens, we’

The worst goods trade deficit in more than three centuries

Last year Britain recorded its biggest deficit in goods trade since records began.* Those records technically go all the way back to 1697, though getting hold of the data is rather tricky. The ONS only has numbers going back to 1998, on a comparable basis, while HM Revenue & Customs

The UK, Germany and France: GDP over history

The Chancellor said recently that he expected that by 2030 the UK would be a bigger economy than Germany. If so, that would be the first time since the 1950s, as this chart above shows. And here’s the same chart, in terms of GDP per capita (eg adjusted for

The IFS Green Budget in seven charts

The Institute for Fiscal Studies’ big annual report, which surveys the state of the UK economy and public finances, came out this morning. It’s a chunky document, which can be downloaded here [http://www.ifs.org.uk/publications/7530] , but if you’re after a digested read, here are

The problem with Greece's GDP-bond solution

If you want a good illustration of the difficulties facing Yanis Varoufakis with his innovative idea for sorting out Greece’s debt problems, think back to Britain’s difficulty with the EU Budget late last year [http://news.sky.com/story/1369482/osborne-claims-real-win-over-1-7bn-eu-bill]. You’ll recall that George Osborne was

Real estate: Britain's most disappointing industry

Here follows some of the background thoughts behindmy column in today’s Times [http://www.thetimes.co.uk/tto/opinion/columnists/article4342328.ece]. You’d probably guess that the single biggest sector of the UK economy is retail. What you might not have realised is that it has very nearly

UK interest rate expectations at lowest levels ever

Here’s how weird things are getting: in Denmark there are now some mortgages with negative interest rates. In other words, banks are paying customers to lend them money. Odd things like this happen when you cut interest rates below zero, as they did in Copenhagen the other week. This

The UK government hasn't been able to borrow this cheaply since 1703

Or ever, most probably. Today the UK Government’s benchmark rate of interest hit 1.4%. That’s the lowest it’s been in quite some time. A very, very long time, in fact. The Bank of England has stats on this going back to 1703, the year Sir Isaac

Carney's euro intervention - illustrated edition

Mark Carney is a close friend and colleague of Mario Draghi, the European Central Bank president. This is worth bearing in mind when considering the significance of his speech last night [http://www.theguardian.com/business/2015/jan/28/bank-england-governor-attacks-eurozone-austerity] , in which he urged certain eurozone nations to spend more

CPI drops to 15-year low

You can find the full release from the ONS here [http://www.ons.gov.uk/ons/dcp171778_390953.pdf]. I make it the first time that the rate of CPI inflation has ever halved in a single month. Though admittedly it’s down from not much to not much at

The most expensive statistical mistake in history

What would you say if I told you that, due to a bizarre statistical anomaly UK taxpayers — you and me — were unnecessarily being charged £2bn more than we should be? You’d be pretty shocked, I imagine — particularly if you heard that these costs were almost certainly avoidable. And yet

Down, down, down. Eurozone prices on the plunge

Some say you can’t call it “deflation” until it’s become a chronic problem. But whatever you call it: deflation, disinflation, negative inflation, what we’ve learnt today is that prices across the eurozone are now falling on a year-on-year basis. The annual rate at which the single currency’

Britain: no longer a nation of homeowners

As I write in my column in today’s Times [http://www.thetimes.co.uk/tto/business/columnists/edconway/article4309900.ece] [£],  one of the landmark moments that happened this year (without anyone seeming to notice) was that Britain’s home ownership rate dropped beneath the EU average (for the pre-accession

2014 Mix

This has been one of those hectic years – lots of working, lots of travelling. Which has meant not much time to put mixes together, hence why a whole 12 months have gone by since the last one. Nonetheless that’s given me even more time to think about what to

Forward Guidance: whatever happened to Mark Carney’s big idea?

Do you remember forward guidance? That’s OK, not to worry — not many others do either. It was the policy launched to enormous fanfare by Mark Carney when he became Bank of England Governor in the summer of 2013. It was about as simple a rule as one could expect

Car loans are now more popular than mortgages

Did you realise that Britons are now more likely to take out big, long-term loans on cars than on housing? I have to confess, until I looked into the state of Britain’s private debt markets for my Times column today [http://www.thetimes.co.uk/tto/opinion/columnists/article4263661.

Paying their way?

This morning two professors from University College London published a report [http://www.cream-migration.org/files/FiscalEJ.pdf] tallying the cost to the Exchequer of immigration. As occasionally happen when complex reports are inflicted on Fleet Street, the study elicited two vastly contrasting stories in today’s newspapers. Version one,

How the Government is misleading us with its definition of welfare, and why it matters

What goes through your head when you hear the word “welfare”? Chances are you’re thinking of job centres, of unemployment benefit, of the housing allowances that fund the disadvantaged so they can live somewhere. Well it turns out you’re only half right. The Government, it transpires, has a

What if the Federal Reserve had decided to spend its trillions of QE dollars on other stuff?

So Farewell then, Quantitative Easing. The six most tiresome syllables in the English language have left the building. For the first time since the early days of the financial crisis, there is no major central bank around the world actively engaged in this experimental policy of creating money and buying

Whisper it quietly: the London property market is turning…

Every so often the New York Times gets a bee in its bonnet about the UK economy. Not all that long ago their main concern was George Osborne’s austerity policies, which they claimed were causing irreparable damage [http://www.nytimes.com/2013/10/03/opinion/learning-the-wrong-lessons-about-austerity.html] . Subsequently, in

Britain's rather expensive recovery

It’s a rum state of affairs when Britain is apparently punished for having a strong economy. After all, we’ve spent the past five or six years telling ourselves that all we desperately need is a bit of growth. And yet that’s how things look today, with the

(N)ever-increasing rates

Here is a chart, part nicked from the OBR’s latest Forecast Evaluation Report [http://budgetresponsibility.org.uk/forecast-evaluation-report-october-2014/]and part updated with the latest market projections. Very simply, it shows you how markets’ expectations for interest rates have changed rather radically over the past few years. So, for instance,

Q&A: why are markets falling?

Here’s a Q&A on the market turmoil we’ve seen over the past few weeks, which you can also find on the Sky News website [http://news.sky.com/]. 1. Why are markets plunging? Good question: as ever with global markets there’s no straightforward answer, but

George Osborne's TINA moment

There’s a chart that comes in useful when you’re reflecting on George Osborne’s 2014 Conservative Party Conference speech today. Buried away in an annex to this year’s Budget [pdf] [https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293738/budget_2014_distributional_analysis.pdf]

Everything you never wanted to know about the Barnett formula

A few myths about the controversial Barnett formula 1. The Barnett formula is what’s responsible for higher public spending in Scotland, Northern Ireland and Wales No – it has been Westminster policy to spend more on public services in non-English UK regions for well over a century, since Chancellor George

Sleepwalking towards what?

In the end, everything tends to come back down to a country’s current account – its economic ledger with the rest of the world (everything from trade to financial flows). A country with a large current account deficit (in other words, one that imports and borrows from the rest of

Rewriting history: Great Recession edition

Do you remember where you were on the afternoon of April 16 2013? George Osborne does. He was about to head off to Washington for the spring meetings of the International Monetary Fund, when, suddenly, the Fund’s chief economist, Olivier Blanchard, appeared on Sky News [http://news.sky.com/

No, economics won’t tell you how to vote in the Scottish referendum

It’s tempting to believe that economics has all the answers. Unfortunately more often than not it has all of the questions and none of the answers. A case in point is the Scottish independence saga. At almost every stage in the campaign, we’ve been told that what this

Britain's Faustian wage bargain

Let’s begin at the beginning. Britain is poorer, much poorer, than it was five or six years ago. If you don’t believe me, take a look at gross domestic product – simply the amount of income generated in the country in a given year. Divided by the number of

The rise and rise of house prices, and the fall and fall in home ownership

Here’s one of the most important charts you’ll see on the UK economy. It’s from the Institute for Fiscal Studies’s report on household incomes today [http://www.ifs.org.uk/publications/7275], produced with the Joseph Rowntree Foundation. [https://i1.wp.com/www.edmundconway.com/wp-content/

The day Keynes read his own obituary

70 years ago this month, John Maynard Keynes nearly died. It was about two thirds of the way through the Bretton Woods conference in New Hampshire. The delegates were within a whisker of agreeing upon a new deal on currencies and money which would, once and for all, repair the

Are public sector workers really getting a raw deal on pay?

Who is facing the biggest squeeze – public or private sector workers? The question arises today in particular because of the mass strikes from state workers over their remuneration. Their complaint is that they have received unfair pay over the past few years – most notably because there is a 1%-a-year

Bank of England finally embraces regional economic policy. Kind of...

It’s tempting to glance at what the Bank of England has done today and say: “so what”? After all, on the face of it, the two primary measures unveiled by the Financial Policy Committee are hardly likely to make much difference to the UK housing story. Consider them in

Sorry: Tech didn't drive Britain's recovery

I was perplexed to hear Joanna Shields, lately chief executive of Tech City, say the following this morning: “The latest recovery was really fuelled by Technology entrepreneur-led businesses. They have actually contributed whilst government and big business have either reduced jobs or limited the number of hirings. Entrepreneur-led businesses have

How Keynes pleaded to be excused from strict D-Day travel bans

One of the many precautions taken by the War Office at the time of D-Day, Operation Overlord, was to impose a blanket ban on non-essential travel. At first it was slated to last seven days; later they contemplated extending it by another week or more. While this was perfectly sensible

Thanks, but where's the kitchen sink? The ECB and negative interest rates

The origin of the phrase “everything but the kitchen sink” goes back to the Second World War: so much metal was needed to fight the Nazis that households were encouraged to donate every metallic object in their homes – save for the porcelain in their kitchens. Today, as the commemorations of

How One Drunken, Chaotic Meeting Shaped Western Capitalism

The Bretton Woods conference may have happened 70 years ago but it was the most important agreement in economic history. And we’re still living out its consequences today. Here are 15 reasons why you should care1.It helped prevent World War Three IMF Archives / ViaLet’s start with the

Sex, drugs and GDP

How big is Britain’s drugs and prostitution industry? Up until recently this question didn’t frequently come up at the Office for National Statistics, the keepers of Britain’s economic data. But a change in international statistical regulations has meant they now have to include such activity in Britain’

Help to Buy: more popular, so far, than Right to Buy

It’s not often the Government goes out of its way to tell people that one of its policies hasn’t been a runaway success, but that’s precisely what seems to be happening today with Help to Buy. The Treasury has published the first figures on the take-up of

Lies, damn lies and Scotland

If ever you were after an example of everything that’s wrong with political economics today, you need look no further than the debate over Scottish independence. This is an issue of immense importance – one that may come to define the history of this country (or these two countries) for

Britain's property disaster was entirely avoidable

My column in this week’s Times deals with the long-term causes of Britain’s property crisis. You can read the full thing on their website (£) [http://www.thetimes.co.uk/tto/business/columnists/article4095337.ece]but here’s an excerpt from the middle: As the 20th century wore on,

The reputational legacy of Help to Buy

As the property market chugs ever higher and the London bubble inflates to new, worrying levels, George Osborne’s decision to introduce the Help to Buy mortgage guarantee scheme last year looks ever more suspect. Mark Carney’s words of caution over the weekend are a reminder of that fear

London's unemployment rate: a sign of strength, not weakness

There was something the Bank of England Governor said towards the end of today’s Inflation Report [http://www.bankofengland.co.uk//publications/Pages/inflationreport/2014/ir1402.aspx] press conference  that rang a slightly jarring bell. Asked by the venerable Anthony Hilton of the Evening Standard about the alarming economic

Britain's booming million pound property market

If you’ve been watching Sky News this morning, you may have seen my report about million-pound properties. For those who haven’t, here’s a quick recap. There are two main points, with a few of the details: 1. The number (and proportion) of properties being sold for a

Is Ireland now more of a financial safe haven than the UK?

Something pretty amazing has just happened: the interest rate on Irish government bonds (at least, the 10-year bonds we tend to focus most on) dropped beneath those on the UK’s. It’s the first time this has happened since late-2008, and raises a tantalising question: is Ireland now more

The Great Recession probably ended a good while ago

The Great Recession is over. In fact, it probably came to an end last year – possibly even before that. Now, I’ll admit that the above isn’t yet borne out by the official, or even unofficial, numbers. According to the Office for National Statistics, by the end of the

Help to Buy: Impossible to switch off?

When George Osborne unveiled his Help to Buy scheme in last year’s Budget, there was a collective sigh around the City. Of all the lessons learnt during the crisis, surely the clearest was that mortgage guarantee schemes, such as the one the Chancellor was proposing to set up, could

AstraZeneca is NOT a UK-owned company, OK?

It’s strange that in all the coverage of the AstraZeneca-Pfizer story, few people have seen fit to mention that AstraZeneca is not technically a UK-owned company. I’m talking not about the fact that it’s the product of a 1990s UK takeover of a Swedish company (many have

The future of journalism is the history of journalism

At various points over the past few years, I’ve been invited along to seminars to discuss the role of journalism during the financial crisis. The opinions expressed at such events tend to vary, from those who feel journalists covered themselves with glory during the Great Recession to those who

The £140m property that doesn't tell the story of the housing bubble

It’s tempting to see the story [http://www.thetimes.co.uk/tto/life/property/article4078837.ece]of the £140m London apartment that just sold to a Ukrainian buyer as yet more evidence of the madness in the UK housing market. But while there is now little doubt that the

Ed Miliband has got it wrong on rent reform: he doesn't go far enough

In case you hadn’t already noticed, it’s election season. Yes, there may still be (just) more than a year to go until the general election, but the unhappy windfall of a fixed-term parliament is even more campaigning time. And so any pretence of genuine policy analysis is slowly

Britain: a nation of consumers. Always

Given all the brow-beating about how reliant Britain is on consumer spending, the following chart is worth reflecting on. It shows that while the share of UK GDP accounted for by household consumption has risen steadily since the war, it is still far lower today than for most of the

GDP: a balanced, strong recovery (so far)

The economy is now growing at comfortably the fastest annual rate since late 2007. Though the latest quarterly growth number was a touch lower than expected (0.8% rather than 0.9%), that makes little odds (and, as we’ll come onto in a moment, these initial estimates are usually

The rising pound

There’s been a lot of consternation in recent weeks about the rising level of the pound. Worth noting, though, that while it’s certainly risen a fair bit in recent months, up to the strongest level since the early days of the crisis, it still remains way, way below

House prices vs rents

You might have thought there would be a relationship between the rate at which house prices change and changes in the cost of renting a private property. If there is, it’s a very minor correlation, based on these statistics from the ONS. Here’s London house price inflation vs

Just how imbalanced is the UK economy?

There are plenty of complaints one hears about the UK economy, but perhaps the most frequent one is about it being deeply imbalanced. It includes the following notions: 1. “we don’t make anything any more”; 2. we are overly reliant on consumer spending and 3. we are way, way

London's foreign "cash" property buyers may be less cash-rich than you think

There are all sorts of explanations for the bubble in the London housing market [https://www.edmundconway.com/2014/04/five-signs-the-london-property-bubble-is-reaching-unsustainable-proportions/] , but as with all markets, in the end the truth lies somewhere between supply and demand. On the one hand, we know that there is a shortage of supply,

What really contributed to the massive rise in UK employment?

Some good news on employment [http://www.ons.gov.uk/ons/dcp171778_357545.pdf] today. The unemployment rate is down to 6.9%, the number of people in work has risen by691,000 in the past year – the biggest year-on-year increase since 1989. The number of people in work has

The squeeze: the beginning of the end or the end of the beginning?

It’s official: wages have at last caught up with inflation. The squeeze is over. Or is it? As ever, when it comes to economic turning points, the numbers can differ significantly depending on how you cut them. So let’s break them down ourselves. The figures most people are

The IMF's existential crisis is deepening

Like most money-lenders, the International Monetary Fund isn’t one of those institutions which inspires much in the way of affection – either from those who owe it money or from those who lend it the resources. So it’s of little surprise that unless the world is in economic crisis,

Who's the fairest of them all? (tax edition)

There's a fascinating, and perhaps counterintuitive, chart in today's Fiscal Monitor report [http://www.imf.org/external/ns/cs.aspx?id=262] from the International Monetary Fund. It shows you the extent to which various countries redistribute wealth through their tax systems. [https://i1.wp.com/

World of Debt, 2014 edition

The IMF’s Global Financial Stability Report [http://www.imf.org/External/Pubs/FT/GFSR/2014/01/index.htm] is out today. These days it makes for slightly less exciting reading than in previous years, which is hardly a surprise given how much financial markets have calmed down since then.

The IMF's subtle warning for Alex Salmond

Buried away in today’s IMF World Economic Outlook [http://www.imf.org/external/pubs/ft/weo/2014/01/pdf/text.pdf] is an intriguing section about what different kinds of currency arrangements have done for a country’s economic growth and stability in the past. Admittedly, it’s specifically

11 things you need to know about the World Economic Outlook

The International Monetary Fund’s World Economic Outlook is the most widely-regarded assessment of how the global economy is doing. Here are a few highlights (NB you can click on any of the graphics to see a bigger version). 1. Growth is now pretty widely spread [https://i0.wp.com/

Coming soon: The Summit

This summer the world will pause for a moment and reflect on two famous anniversaries – the centenary of the outbreak of the First world War and the 70th anniversary of D-Day, Operation Overlord. While the histories of these events are well-told, what is less well-appreciated is that this year also

How a German bomb thrust Keynes into the international economic history books

Were it not for a German bomb, there’s a very real chance John Maynard Keynes would never have become involved in one of the biggest economic achievements of his life – Bretton Woods. In the early 1940s, by far and away the most likely person to have led the negotiations

Five signs the London property bubble is reaching unsustainable proportions

One of the biggest misconceptions in economics is that it’s difficult to spot a bubble. On the contrary: spotting a bubble is actually pretty easy. The difficult thing is predicting when it’ll go pop. So let’s not beat around the bush. London is facing a house price

Full employment: George Osborne's audacious bid to steal Labour's biggest economic buzzphrase of the 20th Century

George Osborne has today committed [http://news.sky.com/story/1234422/osborne-pledges-full-employment-for-uk] to “fight for Full Employment in Britain”. But what does “full employment” actually mean? The answer, as with so much else in the world of politics and economics, depends on who you ask. According to those who drafted

Britain's eye-wateringly bad current account deficit - and why it matters

The current account balance is one of those economic numbers that tends to linger in the backdrop these days. In the era of the Gold Standard and Bretton Woods system, when a country’s economic policy was largely determined by its balance with the rest of the world, this measure

Why the Bank of England cannot ignore Britain's gaping regional divide

There’s a standard line the Bank of England trots out every time someone asks whether they’re happy about the near-unprecedented regional economic disparities around the UK: they “decide monetary policy for the country as a whole” – not a specific region. You can trace this regional agnosticism back to

Why George Osborne's pensions reforms matter so much, and why Ed Miliband needs to confront them

Were I one of Ed Miliband’s advisors, I’d print out the following chart and slip it under his door as quickly as possible. [https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2014/03/pikettyinheritance.jpg?ssl=1] It’s from Thomas Piketty’s new book [http://www.

The end of the cost of living crisis?

Has Britain’s cost of living crisis finally come to an end? That’s the question tantalisingly raised by today’s inflation statistics [http://www.ons.gov.uk/ons/dcp171778_354249.pdf], which show the cost of living has fallen from 1.9% in January to 1.7% in February.

More debt, less saving, more strain. Five worrying new charts from the OBR

Though it tends to get rather overlooked on Budget day, the Office for Budget Responsibility’s Economic and Fiscal Outlook report [http://cdn.budgetresponsibility.org.uk/37839-OBR-Cm-8820-accessible-web-v2.pdf] really is a mine of excellent data. All the more interesting because it represents the official “in-house view” that informs the Treasury’

A note of caution on pensions reform

As I watch everyone frothing with excitement over the Chancellor’s reforms to the pensions industry, I can’t help but be reminded of the Gramm-Leach Act of 1999 [http://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act]. Like George Osborne’s pensions reforms yesterday, this

One Bank. Zero Charm.

I should preface this piece by warning you that if you’re after a considered analysis of the pros and cons of the Bank of England’s new core strategic goals [http://www.bankofengland.co.uk/publications/Pages/news/2014/058.aspx], you are probably in the wrong place. Consider

Some pre-Budget thoughts

I can’t remember another Budget in recent memory which has been so little leaked ahead of the day itself. There have been one or two measures dribbling their way onto the front pages in recent days, but far fewer than in recent years. That means one of two things:

The Bank of England needs to conquer its addiction to secrecy

For the Bank of England, today was at least partly about showing that it is transparent and straightforward. After all, it has taken on new far-reaching powers which make it the most important public sector body outside Westminster. It has come under fire for introducing not one but two new

What does Russia trade, and with whom?

Curious about specifically what kinds of trade sanctions (as opposed to financial sanctions, which I covered in more depth here [https://www.edmundconway.com/2014/03/how-britain-became-russias-banker-of-choice-and-what-that-means-for-sanctions/] ) might cause most harm to Russia? In other words, what does Russia most rely on from overseas, whether in terms of imports sucked

Estate agents especially reluctant to report suspicious financial activity

Businesses involved in handling cash and transactions in the UK are obliged to report suspicious activity to the National Crime Agency. Given how much supposedly dirty Russian money is allegedly flowing around the London property market, one might have expected estate agents to make up a large proportion of these

How much time do different nationalities spend sleeping and eating?

Just came across this fantastic dataset from the OECD [http://www.oecd.org/gender/data/OECD_1564_TUSupdatePortal.xls][xls] showing how people in different countries, and of different genders spend their time. I have no idea how reliable the data are, but there are a few interesting nuggets in

Many happy returns (for the few). Five years of quantitative easing

Quantitative easing is five years old today. Over the course of that time, monetary policy in the United Kingdom has changed beyond all recognition. The reason why is summed up in the chart below. Back in the pre-QE days, the majority of UK government debt was owned by insurance companies

How Britain became Russia's banker of choice, and what that means for sanctions

There’s an assumption out there – one reflected in the briefing document inadvertently flashed to photographers [http://news.sky.com/story/1220388/ukraine-document-reveals-uk-stance-on-crisis] by an official outside Downing Street – that economic sanctions on Russia would not be worthwhile. The rationale has two strands: first, that any bar on trade and

UK mortgage write-offs hit record high

It’s almost certainly too early to get worried about a housing bust in the UK. It may well happen, the way things are going with the property market at the moment – but not for some years. All the same, here’s an interesting statistic released by the Bank of

Why none of us can ignore the fate of North Sea oil

It’s easy to forget just how important a contribution oil and gas makes to the UK economy. Britain, after all, is a large and highly-diverse economy. But while it’s not a pure petro-economy, by the same token there is simply no way the economy would have been as

Unemployment is up. Oh, and it's also down

There is an awful lot of confusion today about whether today’s jobs figures show that unemployment has risen or fallen. So here’s the simple answer. Unemployment today is higher than the last time the Office for National Statistics reported it in January. That goes for both the unemployment

Mark Carney's dangerous new forward guidance

Mark Carney has a name for the new framework for monetary policy he unveiled yesterday: “forward guidance phase two”. My first thought yesterday when I listened to him at the Bank’s press conference was that it would be better entitled “fuzzy guidance [https://twitter.com/EdConwaySky/status/433556298303799296]”. It

What today's Inflation Report means for you and your mortgage

The main message of today’s Inflation Report is that the Bank of England won’t be lifting interest rates anytime soon. It more or less endorsed market expectations for future changes in borrowing costs which means, all else being equal, interest rates should be going up some point early

The five things you need to know about the IFS Green Budget

When it comes to independent assessments of the UK economy, few come with as much authority, or indeed independence, as those from the Institute for Fiscal Studies. The cover of the Green Budget, its annual audit of the UK’s economic and fiscal situation, comes with endorsements from both Ed

The 1970s all over again

Ed Balls’s speech promising a return to the 50p tax rate seems to have provoked all sorts of scare stories about a risk that Britain returns to the dark old days of the 1970s. Which is odd because when you take time to examine the data, in tax terms,

Big taxes, small print. Do Labour's 50p tax claims add up?

The problem with tax policy is that there’s always rather a lot of small print. Hidden beneath that big figure about the benefits of your proposed tax change are a whole load of assumptions (often untested) and provisos (usually unvoiced). The upshot is that every time anyone announces a

RIP Forward Guidance?

Forward guidance, as I’ve said briefly before [https://www.edmundconway.com/2013/11/growth-the-bank-of-england-and-the-honey-bee/] , is a little like a male honeybee. It lives only for the briefest period of time and dies when it has achieved its life’s purpose: in the case of the honeybee, fertilising the Queen

IMF predicts more growth, but is it the right kind of growth?

The chances are that by now you’re already well aware of the gist of the International Monetary Fund’s latest update to their economic forecasts [http://www.imf.org/external/pubs/ft/weo/2014/update/01/index.htm]. As we revealed on Sky News yesterday, the Fund is raising

Not all that long ago it was George Osborne arguing about splitting up Britain's banks

Britain needs smaller banks. It needs banks which are no longer so big, uncompetitive and dangerous. And if splitting up the banks is what’s needed to address this, that’s precisely what the Government needs to do. Not Ed Miliband’s words, but those of a certain George Osborne.

London house prices now at record high in dollar terms

One of the reasons London house prices have risen so sharply in the last few years, both in absolute terms and in comparison with the rest of the country, is the enormous appetite of foreign investors. And in part, this has been reinforced by the fact that the pound fell

Who's got the biggest welfare state of them all?

The Chancellor, George Osborne, is making a speech this morning about Europe. In it, he urges the continent to reform economically, with a specific warning about its level of social welfare spending. “Europe,” he says, “accounts for just over 7% of the world’s population, 25% of its economy, and

Time to start thinking about higher rates

I’m going to let you in on a little trade secret. Most of the analysis and reaction to a Bank of England rate decision is pre-written hours, sometimes days, ahead of the announcement itself. An economist will write some paragraphs in case of various different eventualities – a rate hike,

George Osborne - the new prudent Chancellor

You might have been a little surprised to have heard the tone of the Chancellor’s inaugural 2014 speech today [https://www.gov.uk/government/speeches/new-year-economy-speech-by-the-chancellor-of-the-exchequer] . After all, the UK economy is powering towards a recovery – the most convincing one since the onset of the crisis. The deficit is

Thatcher's ministers warned her of a potential housing crisis if she cut housebuilding

Given everyone, even the London Review of Books [http://www.lrb.co.uk/v36/n01/james-meek/where-will-we-live], is now talking about Britain’s housing crisis, it’s striking that no-one seems to have picked up on one of the elements of newly-released Cabinet papers this morning. The hitherto secret papers,

Season's Greetings 2013

[https://i2.wp.com/www.edmundconway.com/wp-content/uploads/2013/12/xmascover.jpg?ssl=1] For each of the past few Christmases I’ve been putting together a mix of some of the best songs I’ve heard in the previous year. Here is this year’s selection. Hope you

The lucky generation were luckier than we thought

For the past 70 years or so, each generation in Britain could reasonably expect to be wealthier, at each stage in their lives than their parents. They became less and less reliant on inherited cash; they became more educated, were more likely to own their own home and could expect

The Autumn Statement: sound, fury, and a lot of hot air

It is perhaps fitting that the Chancellor’s Autumn Statement [https://www.gov.uk/government/topical-events/autumn-statement-2013] took place on a day which was dominated by news of storms and gusts. Rarely has a Parliamentary Statement been quite so full of hot air. From listening to the Chancellor reeling off

What's really going on around the UK economy - some unexpected answers

Which region of the UK is growing the fastest? Where are house prices least affordable? Where is unemployment highest and lowest? And whose earnings are rising the fastest? As economic questions go, they are more important than ever before, for a simple reason: Britain’s recovery is proving more divergent

Britain in record long-term savings raid

In this post-crisis era it’s not often one comes across economic statistics that genuinely surprise you. But tonight we at Sky News have reported one which most certainly did that for me. According to our analysis of figures from the Bank of England, carried out with the help of

Are British workers really missing out? The Treasury thinks not

Of all the economic phenomena of the past few years, one of the most perplexing (and worrying) is the breakdown in the relationship between economic growth and the earnings of actual workers. As the Resolution Foundation has pointed out [http://www.resolutionfoundation.org/blog/2012/feb/17/fraying-thread-between-pay-and-productivity/] , back in

Today's Bank of England move might mean lower interest rates for longer

Here’s a counterintuitive thought: might the Bank of England’s move today to clamp down on mortgage lending actually mean it ends up leaving interest rates at rock bottom for even longer? That may very well be the upshot of the panoply of new measures unveiled by the Bank

Alex Salmond's sums on the impact of independence may be closer to reality than Danny Alexander's

Though the Scottish White Paper on independence [http://www.scotland.gov.uk/Resource/0043/00439021.pdf] has now been with us for more than 24 hours, confusion still reigns. How can Alex Salmond claim [http://news.sky.com/story/1173661/scottish-independence-600-better-off-claim] that following independence each Scot would be £600 better

GDP: the great imbalancing continues

On the surface of it there were few surprises from the Office for National Statistics’ latest revision of Britain’s growth figures for the third quarter of the year [http://www.ons.gov.uk/ons/dcp171778_335900.pdf]. The ONS left its original estimate of 0.8% growth in the

Scottish White Paper on independence - the key economic points

For those without the time or inclination to sift through all 650 pages of the Scottish White Paper [http://www.scotland.gov.uk/Resource/0043/00439021.pdf], here are some of the key points on the economics of an independent Scotland. The big picture At present, Scotland has only limited

Five surprising facts about Britain's housing market

I’ve just (belatedly) come across the excellent Hypostat report [http://www.hypo.org/content/default.asp?PageID=524] from the European Mortgage Federation and thought a few of its tables were worth sharing – as comparables on housing markets and mortgages aren’t as commonplace as one might have thought.

Why economic recovery could be more painful for Londoners than other Britons

My column in today’s Times [http://www.thetimes.co.uk/tto/opinion/thunderer/article3930749.ece] poses a question: might those who live in London face a far rockier economic time of things during the recovery than in the recession itself? It would be a significant reversal on the regional

Why booming property markets spell good news for the Chancellor

Good news, like bad, seems often to come in threes, and today was no exception. Not only have we learnt (from the CBI) that the industrial sector is expanding at the fastest rate since 1995 [http://www.cbi.org.uk/media-centre/press-releases/2013/11/growth-in-manufacturing-output-strongest-since-1995-cbi-survey/] and (from the DCLG) that

US government was spending more on health than almost every other country even before Obamacare

What with all the fuss in the US surrounding the introduction of parts of Obamacare – the President’s new government-supported healthcare plan – it’s worth reflecting on a couple of salient facts. First, for all the worry and concern about the measure creating a new National Health Service in the

Whose housing market is the most overvalued of them all?

Rather useful chart from the OECD Economic Outlook [http://www.oecd.org/eco/outlook/economicoutlook.htm]today comparing price levels (and measures of overvaulation) in property markets around the developed world (click on it to see a bigger version). [https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/11/

George Osborne <3 OECD

George Osborne has a bit of soft spot for the Organisation for Economic Co-operation and Development. Not because of the qualities institution’s most people usually associate with the OECD – its economic analysis, its social prescience, its capacity to help developed countries improve their infrastructure and welfare systems. He likes

Is there an alternative to the mortgage?

Why does buying a house involve taking out so much debt? OK yes, there is, of course, a pretty obvious answer to this: it’s incredibly expensive. Few Britons have a spare £245,000 lying around (the average UK house price as of September) so they need a little help

Growth, the Bank of England and the honey bee

Let’s start with the good news. The economy is recovering more convincingly than at any point since the financial crisis of 2008. And while this is hardly new news (the figures have been pointing that way for a while) the Bank of England seemed to confirm it today as

Everything you need to know about today's Inflation Report in three charts

As we all know, the Bank of England has said that it will not even consider raising interest rates until the unemployment rate has dropped beneath 7%. We now know that moment will come far sooner than expected. As you can see on this chart, in August, the Bank wasn’

UK property still a bargain for many overseas buyers

One of the big stories we’ve been covering recently is the enormous disparity in prices and house price inflation between London and the rest of the country. Now, this gulf has always existed – there are obvious explanations for why property should cost more in a capital city, where jobs

Developed world investment plummets to new low

[https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2013/11/OECDoutflows.jpg?ssl=1] The amount of cash spent by the developed world on overseas business investment dropped to the lowest level since comparable records began in the second quarter of the year, according to figures from the OECD.

Here's who the UK Government owes money to

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/10/ukgovtdebt.jpg?ssl=1] We all know that the total amount of debt owed by the British Government has ballooned in recent years – from £220bn in 1995 to almost £1.4 trillion today. But who actually owns the debt?

Revealed: the best and the worst performers during the UK slump

Which parts of the British economy would you suppose have fared best, and worst, during the recession? It’s a subject worth dwelling on ahead of tomorrow’s GDP release. There are a few obvious guesses. We all know, for instance, that finance, the City, has had a torrid time.

Are house prices really too expensive?

The Office for National Statistics’ measure of house price inflation has caused quite a stir this morning. There has been chatter aplenty on Twitter and the Treasury has even issued a statement [https://twitter.com/EdConwaySky/status/390053992689958912/photo/1] responding to the numbers [you can find them here [http:

The poison pill in the Republican debt ceiling proposal

Here’s something to keep in mind over the course of the next few days of to-ing and fro-ing between Congress and the White House: the United States has already hit the debt ceiling. [https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2013/10/fredgraph.png?ssl=1] In

Eight must-see charts from the IMF's World Economic Outlook

1. The big story [https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2013/10/weoprojections.jpg?ssl=1] Here are the Fund’s GDP growth projections for all the world’s major economies over the next couple of years. One chart to rule them all. 2. The story of

5% mortgage deposits: part of the national picture?

[https://i2.wp.com/www.edmundconway.com/wp-content/uploads/2013/03/depositFTB.jpg?ssl=1] On the Today Programme yesterday [http://www.bbc.co.uk/news/uk-politics-24345734] the Prime Minister said that “95 and 90% mortgages have been a part of our national picture for many, many years.” But is

The reality behind George Osborne's new public finances pledge

Here’s a useful way of thinking about George Osborne’s new surplus target. Back in 2010 the Chancellor was committed, through one of his fiscal rules, to reducing Britain’s national debt by 2015. Today, the Chancellor has committed, through a brand new fiscal rule, to reducing Britain’s

Credit card lending hits highest rate in three years

[https://i2.wp.com/www.edmundconway.com/wp-content/uploads/2013/09/credcard.jpg?ssl=1] Annual credit card lending growth has risen to 4.5% – the highest rate since February 2010. Figures from the Bank of England [http://www.bankofengland.co.uk/statistics/Pages/mc/2013/aug/default.aspx].

Real Estate Nation

[https://i2.wp.com/www.edmundconway.com/wp-content/uploads/2013/09/realestate1.jpg?ssl=1] No doubt you’ve already seen the rather extraordinary figures on the number of people who now work in real estate in the UK [http://leftoutside.wordpress.com/2013/09/12/the-horror-of-help-to-buy-construction-jobs-down-277000-estate-agents-up-77000/] . Well the chart

Proof that the euro crisis has not gone away

[https://i2.wp.com/www.edmundconway.com/wp-content/uploads/2013/09/ULC.jpg?ssl=1] If you’ve been following the euro crisis over the past few years, you’ll doubtless recognise the chart above. It depicts unit labour costs – a measure of how much it costs to produce a

Internet sales as a percentage of total retail sales

[https://i2.wp.com/www.edmundconway.com/wp-content/uploads/2013/09/intsales.jpg?ssl=1] Internet sales as a percentage of total UK retail sales. From the Office for National Statistics’ latest retail sales bulletin [http://www.ons.gov.uk/ons/dcp171778_327646.pdf].

The ugliest economic chart you'll see all day

[https://i2.wp.com/www.edmundconway.com/wp-content/uploads/2013/09/gdpperhourworked.jpg?ssl=1] Britain’s overall GDP may be improving, but in productivity terms the gap between where the UK is now and where its international counterparts are continues to widen. Full ONS report on this here [http:

The most unaffordable property in Britain

There is no such thing as a perfect measure of housing affordability – after all no two homebuyers are the same. Some will be taking out enormous mortgages to part-finance their dream  home. Others will be lucky enough to pay in cash. Some are buying as investment, others to live in

Can Osborne find the feelgood factor?

Here’s something to dwell on: back in 2010, at the time of George Osborne’s first Budget, the Government was predicting that by this stage, midway through 2013, the economy would be almost 3% bigger than it was at the start of the economic crisis. Instead, today Britain’s

Mark Carney's joke book

One thing became clear pretty soon into Mark Carney’s big speech today: the Bank of England Governor is much better when he ad-libs than when he reads from the script. The speech was a bit dry, a touch monotonous, and full of central-bankerese; but when it came time for

Gold in the UK during WWII

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/08/BoEgold.jpg?ssl=1] Love this chart from the Bank of England’s unpublished war history [http://www.bankofengland.co.uk/archive/Pages/digitalcontent/archivedocs/warhistoryww2.aspx] . You can find it at the end of the chapter about gold

Forward guidance: the real poison pill

I promised that yesterday’s blog would be my last on forward guidance. Alas it is not to be, because a friend has pointed me towards a detail which, up until now, I hadn’t quite appreciated. It is this: even if the collective judgement of the Monetary Policy Committee

Carney proved he's a central banker after all

The fallout of the past few days following the unveiling of Britain’s forward guidance policy calls to mind something a senior policymaker whispered to me shortly after Mark Carney was appointed. “Don’t forget,” this person said mischievously, “when push comes to shove he’s still a central banker.

Carney: Help to Buy won't be allowed to fuel housing bubble

[https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2013/08/172046840-1-522x293.jpg?ssl=1] The new Bank of England Governor has pledged that the Bank will bring the Help to Buy scheme to an end if it threatens to create a housing bubble. In an interview with Sky News

The new era of forward guidance has arrived

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/08/bankratelongest3.jpg?ssl=1] Interest rates since 1694, with rates extrapolated out to 2016. Source: Bank of England/Sky NewsWhatever you think about the pros and cons of “forward guidance”, you can’t really deny that this is a

Minutes away from a new Bank of England

A few quick thoughts before I head into the Bank of England lock-in on forward guidance. 1. The Inflation Report will never be the same again. Consider it – up until now, these quarterly reports have been hinged on the Bank’s inflation projections. Yes, they have been broad assessments for

More than forward guidance?

The bold new world of UK monetary policy is drawing close – excited yet? The nine men who make up the Bank of England’s Monetary Policy Committee have been meeting yesterday and today to decide not just this month’s interest rate/QE decision but also, more significantly, the precise

Five reasons to get worried about Help to Buy

Britain has had a housing crisis for years. I’m afraid if you were hoping Help to Buy was going to solve it, you’re going to be very disappointed. That’s the gist of my piece in the Times this morning, which, if you have a subscription, you can

The Bank of England could have put a man on the moon

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/07/Aldrin_Apollo_11.jpg?ssl=1] I note from the Spectator’s website [http://blogs.spectator.co.uk/coffeehouse/2013/07/to-infinity-and-beyond/] that George Osborne is investing money in Britain’s own innovative space project, Skylon. Then it struck

Expect anything: the moral of today's minutes

When he appeared before the Treasury Select Committee back in February, Mark Carney was asked whether he was prepared to be outvoted when he sat on the Monetary Policy Committee. “Yes,” he responded. “I would like to be on the right side more often than not; but obviously I would

Divergent Britain - a table

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/07/regions.jpg?ssl=1] Useful chart from Capital Economics showing the divergence in economic experience between different parts of the UK. Underlines that this isn’t merely a London vs the rest of the country story. On some metrics

Value of the pound 1750 to 2011

The value of one pound from 1750 to 2011. Essentially, one decimal penny from 1750 (eg the equivalent of £0.01) was worth the equivalent of about £1.80 in today’s money. From this wonderful House of Commons library paper [https://www.parliament.uk/briefing-papers/RP12-31]. Below is the

Rebalancing, euro-style

[https://i2.wp.com/www.edmundconway.com/wp-content/uploads/2013/07/currentaccounts.jpg?ssl=1] Following on from my blog on Portugal yesterday [https://www.edmundconway.com/2013/07/portugal-the-wrong-kind-of-austerity/], this chart above (from Citi) underlines the fact that while some the peripheral countries in the eurozone are reducing the

The most radical non-event in Bank of England history

Let’s get this straight: Today the Bank of England did nothing to interest rates. It did nothing to quantitative easing; it even went so far as telling us that it would continue doing nothing a long, long way into the future. And yet this all this doing-nothing amounted to

Portugal: the wrong kind of austerity

On the face of it, the political implosion in Portugal, and the consequent return of the euro crisis, might strike some as surprising. Since last summer, and Mario Draghi’s commitment to do “whatever it takes”, bond yields in the euro area have been in decline. And although it has

The picture for poorer families is worse than previously thought

The Government’s austerity programme is significantly more regressive than previously stated, taking a bigger chunk out of poorer households’ incomes than suspected, according to documents released alongside yesterday’s Spending Round. By 2015/16 the poorest fifth of UK households will have seen their incomes shrink by 3.9%

Double dip no longer

George Osborne may have a tough lot as Chancellor, but he can at least count himself luckier than his Conservative predecessors from the 90s. Like him, they faced a double dip recession that was originally reported at the time, but was revised away later. Unlike him, they had to wait

The real story behind today's Spending Round

There’s one important chart that overhangs today’s Spending Round – but don’t expect to find it in anywhere in the official documents [https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/209036/spending-round-2013-complete.pdf] . It is this one, showing the extent to which welfare and health

Government bond yields around the world since 1730

[https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2013/06/historicalgovtbondyields.jpg?ssl=1] A quite brilliant chart from the Bank of England’s latest Financial Stability Report [http://www.bankofengland.co.uk/publications/Pages/fsr/2013/fsr33.aspx] showing interest rates for various governments around the world since

Cigarettes and alcohol: a primer on prices

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/06/comparativeprice.jpg?ssl=1] UK tobacco prices are 94% above the EU average – only Norway (170% above) and Ireland (99% above) are more expensive for smokers. Table above from Eurostat [http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/

UK negative equity mapped

[https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2013/06/negequity.jpg?ssl=1] Proportion of borrowers facing negative equity in different regions of the UK. As you can see, more than one in ten in the North West and Yorkshire & Humber currently owe more than the value

Demand for UK government bonds slumps to new low

Demand for UK debt at the Government’s auctions has fallen to the lowest level for more than a decade and a half. The average number of bids for each pound of debt offered at the past three government debt auctions averaged out at 1.43 – the lowest so-called bid-to-cover

G8: an unexpected mini-breakthrough on tax

If you dig deep enough into the G8 communiqué [https://www.gov.uk/government/publications/2013-lough-erne-g8-leaders-communique] (I accept you might not want to do that), there are one or two surprises when it comes to the question of tax. We knew this summit was going to be largely focused on

How foreign banks exacerbated Britain's financial crisis

[https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2013/06/foreignbanks.jpg?ssl=1] Globalisation is a good thing, right? That’s the underlying message of most economics textbooks – indeed the centuries-old theory of comparative advantage has it that because international markets allow countries to specialise in what they

Austerity in a picture

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/06/pubspending.jpg?ssl=1] Striking chart from the IFS’s report today showing that the scale of austerity (in terms of cuts to spending on public services) is more prolonged and cumulatively greater during this period than ever before

The financial nitroglycerine buried under the Bank of England

[https://i2.wp.com/www.edmundconway.com/wp-content/uploads/2013/06/monetarybase.jpg?ssl=1] Monetary base in various countries/economic areas since onset of crisis. Source: Bank of EnglandFor me, this remains one of the most important, and least appreciated, charts of the financial crisis. It measures the so-called

Sun

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/06/suncover.jpg?ssl=1] Download mp3 (you may need to right-click) [https://www.edmundconway.com/Site/Media/Sun.mp3] Sun [http://www.mixcloud.com/edmundconway/sun/?utm_source=widget&amp;utm_medium=web&amp;utm_campaign=base_

UK Government issues longest-dated bond since 1937

The UK Government is set to issue its longest-dated bond since before the Second World War, in its latest bid to capitalise on rock-bottom interest rates. [https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2013/06/Spanish_11_interbrigada_in_the_battle_of_Belchev._1937.jpg?ssl=1] 1937:

Drinks, planes and machines - the real story of what Britain actually makes

So large and persistent is Britain’s trade deficit that it’s tempting to believe that the country essentially makes nothing; that it merely sucks in everything from abroad (largely China) and produces nothing of value itself. That is, as I’ve tried to explain in previous posts [https://www.

The Economic Consequences of Greece

“I wish I could tell you every evening the twists and turns of the day, for you’d really be amused by the amazing complications of psychology and personality and intrigue which make such magnificent sport of the impending catastrophe of Europe.” The words are John Maynard Keynes’s, in

Chart: The enormous Greek bail-out

[https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2013/06/quotaBIG.jpg?ssl=1] Love this chart from the IMF’s “mea culpa” on Greece [http://www.imf.org/external/pubs/ft/scr/2013/cr13156.pdf] [pdf], showing just how massive its loan was for the country in comparison

Chart: The Bank of England and the Government debt market

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/06/gilts.jpg?ssl=1] Striking chart showing how the Bank of England has taken possession of almost every extra bit of debt the Government has issued during the crisis. Figures are from the Debt Management Office. Left hand scale

Spot the odd one out

[https://i2.wp.com/www.edmundconway.com/wp-content/uploads/2013/06/ULCsinhistory.jpg?ssl=1] Unit labour costs (a good measure of inefficiency) in various European countries since 1970. The higher your number, the more inefficient you are (eg it costs more to produce a given unit of GDP). Helps

Chart: the changing face of retail

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/06/nonstore.jpg?ssl=1] Striking chart from the Office for National Statistics [http://www.ons.gov.uk/ons/rel/elmr/economic-review/june-2013/art-economic-review--june-2013.html] showing how non-store retailing (eg internet shopping) is fast coming to dominate our shopping habits.

UK house prices "significantly overvalued"

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/06/OECDhouses.jpg?ssl=1] According to OECD research, house prices in Britain are still significantly overvalued. Indeed – that’s both on a price-to-rent basis and on a price-to-income basis. It’s extremely hard to reconcile that with the Chancellor’

OECD: Britain to enjoy strong growth for generations! Honestly!

We're so used to hearing bad news from international institutions like the Organisation for Economic Co-operation and Development that it might come as a surprise to hear that there's a whopping slab of good news for Britain buried away in its latest Economic Outlook. Admittedly, the

The first cuts are the deepest

Let’s start off by putting this into perspective. Exciting as the Chancellor’s announcement of 10% spending cuts at seven (count ‘em) Government departments may sound, it amounts to barely more than a drop in the increasingly vast ocean that constitutes the public sector’s annual outgoings. [https://i0.

Britain's bank mortgage market is still imploding

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/05/BBAdown1.jpg?ssl=1] If you wanted evidence of the problems in the UK mortgage market, look no further than this chart from the British Bankers Association. Mortgage lending annual growth has just dipped into negative territory for the

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[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/05/divergent.jpg?ssl=1] Further proof, if it were needed, that Britain is the most regionally imbalanced economy in Europe. Chart from Capital Economics. For more on this subject see here [https://www.edmundconway.com/2012/12/the-lopsided-recovery/].

George Osborne, the IMF and why Plan A never existed in the first place

Here’s a prediction: tomorrow morning some of the country’s esteemed newspapers will run stories saying the International Monetary Fund has just dealt a fresh blow to George Osborne, blasting his fiscal plans. At the same time, some newspapers will run stories saying quite the opposite: declaring a victory

Osborne 1 IMF 0

After all the fuss the International Monetary Fund has made over the past month about the need for the UK to change course on austerity, about how George Osborne’s policies are “playing with fire”, one might have expected a harsh verdict from the Fund in its annual survey of

Public finance update (for normal people)

Last month I wrote a lengthy piece about the disturbingly complex state of the public finances. Well, the latest month’s numbers [http://www.ons.gov.uk/ons/rel/psa/public-sector-finances/april-2013/index.html] – those for April – have come in. The good news for the Chancellor is that they are

The Jawbone Up and me

After a week or so wearing the Jawbone Up [https://jawbone.com/up] I suddenly realised I had started to develop some rather unusual habits. For one thing, I’d taken to swinging my arms rather more than usual when I walked. If I had a bag to carry I’

A quick rant about the unemployment figures

This might sound counter-intuitive, given everyone (the ONS included [http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/may-2013/index.html] ) is proclaiming that today’s labour market data showed a rise in unemployment, but the reality is that the jobless total actually dropped A LOT in the most recent

Sir Mervyn King and his troubled legacy

It was a demob-happy Sir Mervyn King who appeared at the Bank of England today for his final ever Inflation Report. He joked with a Slovenian journalist to “come and join the Sterling area!” He threw in one or two football jokes. He even had time to lob some acid

The G7 and the "spirit of 2008"

Here’s how international finance ministers’ meetings like the G7 usually work: the ministers, central bankers and a few other VIPs like the head of the International Monetary Fund get together in a room. Usually one without windows. They each read out a pre-prepared opening statement, each of which can

What happens to banks when the economy is uncooperative

It’s very easy to dismiss the Moody’s downgrade of the Co-operative Bank today – after all, who pays attention to ratings agencies these days? That is, until you look at the details of the downgrade notice. Moody’s has dropped the rating on the Co-op’s debt not by

GDP: finally, some good news

Let’s get the provisos out of the way first. One quarter’s numbers do not a recovery make. The UK economy is still far from what anyone would regard as healthy. National income is still more than 2.5% below where it was back at the start of 2008.

Funding for what?

If you’ve ever wondered how it is that despite getting things so monumentally wrong over the past five years, economists still manage to find work, a brief glance at the newly-refreshed Funding for Lending scheme might enlighten you. Here is a scheme which, according to most external analysts has

What's really going on with the public finances

When he was Shadow Chancellor, one of George Osborne’s favourite criticisms of the then Chancellor Gordon Brown was that under him the tax system had become so complex that Tolley’s Tax Handbook, the Bible of tax measures, had doubled in length to over 11,500 pages. In an

Downgrades: an observation

Since Britain’s sovereign debt rating was downgraded from AAA by Moody’s a couple of months ago, the UK’s cost of borrowing (as measured on its 10-year bonds) has fallen from 2.1% to just below 1.7%. That’s a 19.5% fall in borrowing costs. You

The IMF vs George Osborne - the inside story

A few weeks ago, eagle-eyed Twitter users would have noticed a rather unusual tweet [https://twitter.com/Lagarde/status/320201479317233664] from one household name to another. “Welcome to Twitter @George_Osborne [http://www.twitter.com/George_Osborne],” read the public message from @Lagarde [http://www.twitter.com/lagarde], “see you

Blanchard: UK economic policy is "playing with fire"

[https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2013/04/137652604-1-522x293.jpg?ssl=1] The International Monetary Fund’s chief economist has warned George Osborne that he is “playing with fire” with his fiscal policy. In an interview with Sky News, Olivier Blanchard also said that the Chancellor should

Coming next year: The Summit

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/04/bretton.jpg?ssl=1] Today I can finally talk publicly [http://www.thebookseller.com/news/lb-buys-bretton-woods-book.html]about a project I’ve been working on for the past three years. Next summer, Little, Brown will publish my book about

David Miles on the economy, QE, banks and Help to Buy

If you were asked to pick three of the main economic talking points of the present day, you might reasonably choose the following: the threat of recession; the question of how to cleanse the banks and the issue of how to sort out the housing market. [https://i0.wp.com/

Thatcher and North Sea oil

There has been much talk this morning about how much of the economic success of the Thatcher years was due to North Sea oil. Rather than write a whole new blog about this, here is a column I wrote about it in the Telegraph back in 2009 [http://www.telegraph.

Margaret Thatcher: the economic legacy

Baroness Thatcher wasn’t a great fan of statistics. She tended to treat them with the same kind of disdain she usually reserved for economists, who spent most of her time in office telling her she was wrong. So it is probably fair to say she wouldn’t much have

How to save the newspaper industry

It’s not often I say this, but today I’d like to share a business idea with you. And this one’s free. It’s pretty simple – so simple, in fact, that I can’t for the life of me work out why it hasn’t been done yet.

The slow collapse of America's jobs market

Americans are dropping out of the jobs market, and fast. That’s the depressing takeaway from today’s non-farm payroll report [http://www.bls.gov/news.release/empsit.nr0.htm]. The overall participation rate – a measure, essentially, of the proportion of people of working age either in a job or

The death of interest rates

A few years ago, not long after the Bank of England started its quantitative easing programme, someone who had just been appointed to the Monetary Policy Committee lamented to me that he would probably never get to change interest rates at all. At the time, I assumed he was joking

How Britain flirted with Cyprus-style wealth raids

Is it really feasible, as Graeme Archer argues over at the Telegraph [http://www.telegraph.co.uk/news/worldnews/europe/cyprus/9961492/The-real-mistake-over-the-Cyprus-bail-out-would-be-to-think-it-cant-happen-here-in-Britain.html] , that something akin to the great Cyprus bank robbery could happen one day in the UK? It’s tempting to dismiss the idea out of hand:

Cyprus and the meaning of "temporary"

Well that’s a relief! The initial leaked documentation detailing how capital controls will work in Cyprus says they will only be temporary. Of course, were one to look through history at episodes of international monetary breakdown, you’ll find that most of the seminal, permanent measures which brought economic

Vince Cable gets it wrong on capital and lending

Vince Cable is one of the biggest brains in UK Government. He’s a trained economist and was one of the few MPs who warned, well ahead of the crash, that bad things were afoot in the UK economy. So it pains me to have to say this but I’

Cyprus: A mess taking shape

So it turns out Thursday is the new Tuesday. Though until yesterday, Tuesday was the previous Tuesday. The bank holidays here in Cyprus have now stacked up so bewilderingly high that this is now the longest period of enforced bank closure in modern history (at least as far as the

Cyprus on the brink

It’s an unfamiliar feeling these days, travelling to a country with capital controls – or the threat of them slamming down any moment. You bring more cash than usual because the ATMs don’t all work, but you can’t take too much or you might not be allowed to

Cyprus: good news for the fight against tax avoidance

I’ve been conducting a thought experiment to come up with a clear-cut positive by-product of the mess in Cyprus, and I think I may have found one. What’s happening on that benighted island right now may represent more of a step forward in the fight against tax havens

The majority of Government spending is now uncontrolled

2013 may well go down as an extraordinary year for many reasons – to take one of them, it looks like being the first time we’ve had capital controls imposed not merely in the single market but in the eurozone (more on which later) – and it also represents a landmark

Help to Buy: it's not only dangerous, it also misses the point

Listening again to George Osborne’s interview on the Today Programme yesterday [http://audioboo.fm/boos/1281356-george-osborne-many-more-social-homes-not-solution-to-housing-problem] I was struck by one thing he said to Evan Davis: essentially that the large part of the rationale for Help to Buy scheme was that the deposits being asked of homebuyers these

George Osborne gambles on a nation of homeowners

There’s been rather a lot of fuss this morning about the Chancellor’s new Help to Buy scheme [http://www.hm-treasury.gov.uk/10012.htm]– largely revolving around whether it will help guarantee buy-to-let mortgages and those for second homes. While these questions are undoubtedly interesting (the answer, so

What's the point of the Bank of England's new remit?

On the face of it one thing that’s certainly significant about this Budget is George Osborne’s decision to refresh the remit for the Bank of England. This is, in many senses, an historic moment. Just consider the two times the Bank’s remit was overhauled in the modern

The new Bank of England remit

Here’s the new Bank of England remit: Letter from the Chancellor to the Governor of the Bank of England and mo… [/content/images/wordpress/2013/03/Letter-from-the-Chancellor-to-the-Governor-of-the-Bank-of-England-and-mo....pdf] And if you want to compare it with the existing (1997) remit, that one can be found here [pdf] [http://www.

Unemployment is on the rise - and fast

If you were to take a glance at the press release of the official labour market figures [http://www.ons.gov.uk/ons/dcp171778_301631.pdf]published  by the Office for National Statistics this morning, they would have looked pretty benign: unemployment up but only by a touch (7,000)

A Biblical mess in Cyprus

I’m rather glad that the Pope managed to mention Abraham in his inaugural mass today [http://news.sky.com/story/1066538/pope-francis-to-embrace-poor-as-papacy-begins] .  Of all the Old Testament, the tale of Abraham and Isaac is probably about the most relevant to the imbroglio in Cyprus. The father takes his son

Cyprus: from bad to worse

The taste left in one’s mouth by the Cyprus bailout episode just gets nastier and nastier. The latest putrid fact concerns the way the bailout was negotiated. I’m hearing from those close to the deal that it was the Cypriot politicians themselves (in other words not the Germans,

Why Cyprus's awful bank deposit tax will leave a lasting scar

Banking is a confidence trick. The modern financial system – fractional reserve banking as it’s technically called – relies on the public putting faith in their banks. After all, the nature of the system is that at any one time there’s never enough cash in bank vaults to give everyone

The tragedy of Cyprus

Back in 1941, with the memory of the Great Depression still weighing heavy, an American wrote into the Federal Reserve with an idea. “Would it not be feasible,” the member of the public asked, “to impose a Federal tax on the deposit of funds in bank checking accounts?” The reply

Why the OBR is annoyed with David Cameron

The Prime Minister gives hundreds of speeches [http://www.number10.gov.uk/news-type/speeches-and-transcripts/], long and short, every year. He has appeared in countless press conferences and made numerous television appearances, and, given the time we’re living in, the dominant theme has inevitably been the economy. But until today,

Another manifesto pledge is about to bite the dust

Just before the 2010 election I asked a senior Tory economic adviser if the prospective new Chancellor would reconsider the Bank of England’s remit. He looked at me as if I was mad. “That’s not something we’d want to do,” he said. “Just think what that would

The real story behind Sir Mervyn King and RBS

There is a little-known story from the early days of the financial crisis which is worth recounting today. It’s a story which, to some extent, explains why Sir Mervyn King is still, even five years on, railing against the way the Government nationalised RBS and HBOS [http://news.sky.

SimCity: "It's a bit like Azerbaijan"

Like many people of my generation, my first experience of economics wasn’t in a textbook or a classroom, or even in the news: it was in a computer game. SimCity was one of the first games I ever became addicted to – SimCity 2000 in my case. If you’re

Britain's double dip recession close to being revised away

Britain is now less than a 0.1 percentage point revision away from having never suffered a double-dip recession at all. That’s the real story behind today’s gross domestic product figures [http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2012/index.html], which revised not merely the

Who should be most worried about the Italian election result

It is fitting that it is an election which has threatened to send Italy (and perhaps even the broader euro project) back into financial chaos. Not bad economic news; not a credit rating agency downgrade:  politics, pure and simple. After all, Italy’s role in the euro crisis has always

Apocalypse No: markets "react" to rating downgrade

Let’s get this straight: on Friday night Moody’s downgraded Britain’s credit rating for the first time since it started giving official ratings to the UK back in 1978. This means as far as it is concerned Britain is statistically more likely to default in the coming years.

Moody's downgrade: the politics and the economics

First things first, this is definitely more of a political than an economic blow for the Chancellor. For better or for worse, he tied his reputation to the performance of Britain’s credit rating back in the run-up to the 2010 election. He inserted an explicit pledge that he would

The three ages of inflation targeting

Since the Bank of England was granted independence back in 1997, there have been, roughly speaking, two ages of inflation targeting. The first ran from 1997 to 2007: inflation was almost peculiarly and reliably on target, whether that’s RPIX, the measure the Bank’s Monetary Policy Committee used to

What today's public finance figures really mean

In the decade or so I’ve been covering economics for the UK media I cannot recall a public finance release quite as confusing and complicated as the one spewed out [http://www.ons.gov.uk/ons/dcp171778_299033.pdf] by the Office for National Statistics this morning. At first

Don't believe the headlines: unemployment actually rose in December

You’ve heard of optical illusions; well prepare yourself for a statistical illusion. Earlier this morning, the Office for National Statistics reported that unemployment had fallen [http://www.ons.gov.uk/ons/dcp171778_297429.pdf]. That is the headline most news organisations have run with [http://www.guardian.co.uk/

Mervyn King: we've failed to repair the world economy

For me, the most significant thing anyone in economics said in the past week was an apparently throwaway remark from Sir Mervyn King at the end of his Inflation Report [http://www.bankofengland.co.uk/publications/Pages/inflationreport/2013/ir1301.aspx] press conference (emphasis mine): There is enormous uncertainty out

Horse meat scandal: the economics

That’s right, even the horse meat saga does, inevitably, come down to economics. One of the main rules of the subject is that if something goes up in price, people will tend to substitute for alternative goods. That goes for individuals and for businesses. And it so happens that

Sir Mervyn: the Government is scoring an own goal

You can tell when Sir Mervyn King wants to make a point: he throws in a football analogy. He did it a decade ago, warning that changing the Bank’s inflation target was like “moving the goalposts [http://www.telegraph.co.uk/news/uknews/1449135/Change-in-price-index-could-hit-wage-rises.html] ” during a free

G7 speaks out over threat of "currency wars"

More or less every week a small group of senior officials from seven finance ministries and central banks around the world hold a very special teleconference. The contents of these secure G7 finance calls are confidential; they rarely issue a statement, unless they want to say something they judge to

Eight things we learnt about Mark Carney today

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/02/carney.jpg?ssl=1] Here’s what we learnt about the incoming Bank of England Governor, Mark Carney, in his testimony before MPs at the Treasury Select Committee today, in more or less descending order of importance. 1. This

Helicopter money on the horizon

Do you hear that? The thwack-thwack sound of approaching helicopters? If not, don’t worry: you soon will. > This video is no longer available because the YouTube account associated with this video has been terminated. [http://www.youtube.com/watch?v=Gz3Cc7wlfkI] No Description Politicians around the world are

The long road to fix broken Britain

It’s not every day you get one, let alone two, thumping big reports on the state of the UK economy. But today, Hallelujah, is one of those days. Earlier in the day we got the Institute for Fiscal Studies’ Green Budget. The short message was that the Chancellor has

Stop press: We're not doomed (yet)!

There hasn’t been a massive amount of newspaper coverage about the LSE Growth Commission’s new report [http://www2.lse.ac.uk/researchAndExpertise/units/growthCommission/documents/pdf/LSEGC-Report.pdf] , which is perhaps unsurprising given that whereas many think tanks set out to shock with their reports, this one sets

How to name a conference like Davos

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/01/wpid-Photo-22-Jan-2013-1507.jpg?ssl=1] En route to Davos today I used to think that the toughest, most exacting job in the field of English language was to be a headline-writer at The Sun – after all, anyone who’s worked

DLD: Big Data or No Data?

Munich I'm in Munich today and tomorrow to cover the DLD conference, a kind of tech equivalent of Davos. Rather like the World Economic Forum it's a get-together of entrepreneurs, investors, a few academics and journalists – although this time around the focus is very specifically on

DLD: The Dropouts

“We invest in college dropouts with insane ideas and no way to monetize them.” So said Ben Horowitz, legendary Silicon Valley investor in his talk here at DLD. And he was only half joking. His point was that the majority of successful technology entrepreneurs of the past decade or so

A soap opera - Fed's verdict on Northern Rock

The Federal Reserve has just released a load of transcripts [http://www.federalreserve.gov/monetarypolicy/fomchistorical2007.htm]of its meetings in 2007, the year the securitisation markets seized up and, on this side of the Atlantic, Northern Rock became Britain’s first bank collapse since Victorian times. The transcripts make

The High Street's Most Miserable Christmas

So now it’s official. Leaving aside the big freeze in late 2010, this was the worst Christmas for British retailers for more than a decade. If the collapse of a series of high street retailers wasn’t evidence enough, now we have the verdict from the Office for National

The real state of Britain's trade relationship with Europe

There’s a common misconception that Britain is disproportionately reliant on Europe as a market for its exports. And although the EU is certainly an important destination for UK products, it doesn’t (as some like to claim) receive the majority of UK exports. Like most economic misconceptions it’s

What really did for HMV

There’s a pretty simple explanation for the miserable fate of high street stores like HMV, Jessops and Comet, and it came in today’s inflation figures [http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/december-2012/index.html] . The price of the kinds of goods those shops sell – everything

The real state of Britain's housing market

According to the Royal Institution of Chartered Surveyors, the housing market is recovering, and is now at its healthiest since 2010. So it feels like an appropriate time to examine how house prices have fared since the start of the crisis. Here, to start with, are how UK house prices

Sir Mervyn vs Goldman Sachs

Sir Mervyn King to the Treasury Select Committee on reports Goldman Sachs planning to delay payment of bonuses this year until the 50% tax rate is removed in April: I find it a bit depressing that people who earn so much find it would be even more exciting to adjust

How RPI became Britain's Club Class inflation rate

What, when it it really comes down to it, is RPI for? The retail price index used to be Britain’s main index of inflation – the one used for most pay settlements, for determining the increases in benefits and pensions – the one targeted by the Bank of England (well, an

RPI: a Bedtime Story

The Office for National Statistics has just decided against modernising the way it calculates the Retail Price Index. It’s a not uncomplicated issue, so perhaps best to listen in on a father-son bedtime explanation. Q: Daddy, what’s inflation? A: Well Johnny, it’s very simple. It’s a

What Britain exports: the ultimate chart

Britain’s key exports. These are the main categories of exports where Britain has a surplus in trade. Goods categories are denoted in italics. Source: ONSWhat does Britain actually export? It’s a question that’s often asked of me, since the conventional wisdom is that because the UK no

Finance is still Britain's economic golden goose

Another month, another set of decidedly ugly trade figures [http://www.ons.gov.uk/ons/dcp171778_291789.pdf]for the UK economy. Now, in fairness, Britain’s £3.4bn trade deficit in November was at least a slight improvement on the £3.7bn recorded in October. But even looked at

Britain's recession warning

Well that didn’t last long. 2013 started with an economic bang – Congress unexpectedly steering clear of the fiscal cliff, UK stock markets rising to the highest level since mid-2011, data showing better manufacturing sector output than expected in December. But today that honeymoon came to an abrupt end. [https:

Cash is Back

How much cash have you got in your pocket at the moment? The answer, if you’re anything like me, is not very much. Thanks to credit and debit cards it’s possible to go for weeks without using cash these days. But it turns out that doesn’t go

Britain's best-performing property market revealed

According to Nationwide there is one city in Britain where house prices have doubled over the past decade, and, surprising as it might sound, it isn’t London. That city is Aberdeen, where the North Sea oil industry has created a micro-economy which is vastly different from the rest of

UK Government borrowing rate rises above 2%

The interest rate on UK government debt has risen above the 2% mark for the first time since last spring. [https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2013/01/10yr1.jpg?ssl=1] The jump in yields on the benchmark 10-year gilt have risen from just over 1.

America is now walking the fiscal plank

Markets are in a state of near-euphoria today –the main cause for celebration seemingly the fact that Congress isn’t quite as dysfunctional as everyone thought it was. Late on New Year’s Eve it averted the imposition of hundreds of billions of dollars of tax rises on all income

2012: a year in charts

Presenting 20 of the best and most interesting charts I came across in 2012. International stuff 1. Super Mario saves the euro (for a bit) [https://i2.wp.com/www.edmundconway.com/wp-content/uploads/2013/01/europesurvives.jpg?ssl=1] The story of Europe’s plight is best told by

Five sure-fire ways to solve the fiscal cliff

America is about to plummet off the fiscal cliff. In fact, by the time you read this it might already be on the way down. And all because those pesky politicians couldn’t agree on how to cut the deficit. The problem is that even if the Republicans and Democrats

Backlash Britain: who will fall victim in 2013?

This is typically the time of year when newspaper columnists are asked for their predictions for the coming year. However, I’d like to frame the question in a different way: which establishment/authority figure will face a backlash in the coming year? We are living in the age of

Why the Fiscal Cliff might just be good news

Here’s a thought: what if the fiscal cliff America is about to tumble over is just what the doctor ordered? With only a few days left before the end of the year, it looks increasingly likely that the US will indeed go over the so-called cliff. What this means

The most important statistic you've never heard of

’s the most important statistic you’ve probably never heard of – and it’s just been updated. The good news – wait for it – is that Britain is happily one step further away from economic oblivion than seemed the case three months ago. The international investment position – the comprehensive calculation of

British banks pulling cash out of France

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2012/12/moneyfrance.jpg?ssl=1] British banks pulled more money out of France than any other country in the world during Q3. Figures from the Bank of England. Full release here [http://www.bankofengland.co.uk/statistics/Documents/cwc/2012/

December

The best music from winter 2012. That is all. December [http://www.mixcloud.com/edmundconway/december/?utm_source=widget&amp;utm_medium=web&amp;utm_campaign=base_links&amp;utm_term=resource_link] by Ed Conway [http://www.mixcloud.com/edmundconway/?utm_source=widget&amp;utm_

Instagram, Twitter and boiling frogs

[https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2012/12/Groene_kikker_achter_Bekaert-draad-detail_oog.jpg?ssl=1] You’ve probably come across the frog-in-boiling-water analogy. Put a frog in a pan of boiling water and it’ll immediately jump out. But put the frog in cold water and

Euro crisis: the animated gif edition

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2012/12/eurobalances.gif?ssl=1] Mario Draghi and other eurozone policymakers like to point out from time to time that the euro is in good shape because unlike the US or UK it doesn’t have a current account deficit

Why there won't be a proper EU banking union anytime soon

You have to hand it to them: European finance ministers have done a remarkable job of not fouling things up recently. They’ve managed (for the time being at least) to string together a sequence of summits ending not in discord and recrimination but in broad-based agreement. They’ve taken

UK standard of living drops beneath Germany's

A few years ago Britain’s standard of living used to be the highest in the Europe Union (save for Luxembourg, which is, anyway, a bit of a statistical anomaly).  Today it has dropped down beneath Germany and  Austria, and looks likely to continue falling. Eurostat measures something called Actual

Why we all need to know about NGDP

There’s nothing very new about the idea that a central bank could target nominal GDP rather than inflation. Sir Samuel Brittan has been lobbying for this since before the Bank of England was made independent; Giles Wilkes, now Vince Cable’s special advisor, wrote a compelling paper proposing it

What today's jobs numbers really tell us

I was a little bemused this morning to hear the latest unemployment figures [http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/december-2012/statistical-bulletin.html] being touted by cabinet ministers as the best in a decade. Granted: they’re pretty solid, and they show that the labour market is continuing

English as a second language

According to the Office for National Statistics there are now over a million households in England and Wales where English (or Welsh for households in Wales) is not the household’s main language. The data is from the 2011 Census. [https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2012/

Why Twitter is becoming more like Facebook

It was a few months ago that I first realised something odd was going on in the world of Twitter. The first clue was a blogpost [http://blog.echofon.com/2012/10/changes-coming-for-echofon-desktop-users.html] from the company behind Echofon [http://www.echofon.com/], the application I used to access Twitter

The BIS and the economic bubble warning we cannot ignore

The Bank for International Settlements [http://www.bis.org/]is an odd organisation. Originally set up in the 1930s to facilitate the payment of First World War reparations by Germany to France, Britain and others, it has since transformed into a club of central bankers. What’s less well-known that

The end of "Made in China"?

Apple is planning to move the assembly of some of its computers back from China to the US [http://www.businessweek.com/articles/2012-12-06/tim-cooks-freshman-year-the-apple-ceo-speaks] . In fact, it’s probably happened already: the new generation of iMacs, being shipped right now, have labels suggesting they were made in the States

The real story of Britain's lopsided labour market

This is the third of three pieces I’ve written on the real state of the economy across the country ahead of the Autumn Statement, and it focuses on the labour market. Do go see the video report itself on the Sky News website here. [http://news.sky.com/story/

Britain's lopsided property market

This is the second in a three-part series about the state of the UK economy, and the disparities between different peoples’ experiences. It covers the property market, and you can see the video associated with it here [http://news.sky.com/story/1019881/lopsided-recovery-the-uks-property-market]. Where are Britain’s most expensive

The Lopsided Recovery

The first in our series of three pieces on just how divergent our experiences during the slump have been. You can see the video on the Sky News website here [http://news.sky.com/story/1018975/making-sense-of-britains-lopsided-recovery]. One of the most common observations you encounter here in London, where Sky

The seven things you need to know about the Financial Stability Report

The best thing about the Bank of England’s Financial Stability Report [http://www.bankofengland.co.uk/publications/Pages/fsr/2012/fsr32.aspx]is the brilliant charts it includes about the state of the financial system. To save you from reading the whole thing, here, in no particular order, are

This is what Mark Carney should be most worried about

Much ink has been spilled about the “enormous challenges” facing Mark Carney in his new role as Bank of England Governor – but I’m afraid to say that most of it has missed the point. The challenges everyone’s tended to focus on so far have been the country’s

What was really agreed last night in Brussels

On the basis that if Jean-Claude Juncker denies something, it’s probably true, it’s worth examining the deal cranked through Brussels last night to “save” Greece. Juncker and his fellow eurocrats insist it doesn’t involve any debt forgiveness for the benighted country. [https://i0.wp.com/www.edmundconway.

Mark Carney: should we believe the hype?

“The best central banker in the world” – The Economist on Alan Greenspan, 2000 “The outstanding central banker of his generation” – George Osborne on Mark Carney, 2012 Is anyone else out there taken aback by the almost universal adulation of Mark Carney, the incoming Bank of England Governor? I’m not

Mark Carney: How Osborne got his man

Until last month, George Osborne had more or less given up hope of persuading Mark Carney to come over to the UK to succeed Sir Mervyn King as Bank of England Governor. As a result, the mood in Downing Street was one of depressed resignation: all of the other candidates,

How the Chancellor may break his fiscal rules: a five-minute guide

The Institute for Fiscal Studies has warned [http://www.ifs.org.uk/bns/bn136] that the Government will have to borrow more than expected this year, and that George Osborne will miss at least one – and possibly both – of his two fiscal rules. How exactly has this happened? Here is

The euro is still in big, big trouble: here's why

As I’ve said before [https://www.edmundconway.com/2012/02/what-beer-tells-you-about-the-fate-of-the-euro/] , the best way to understand the euro crisis is through the medium of beer. Take an extended pub crawl through the Eurozone and you soon discover an uncanny pattern: the more deeply-embroiled a country is in the crisis,

Methinks the King doth protest too much

To be honest, I think there is a lot of fuss about nothing with this scheme… …I don’t think it affects anything very much… …It’s a whole lot of fuss about nothing… …I frankly am not very fussed about this one way or another… Sir Mervyn King, November

The squeeze on families’ incomes is...

[https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2012/11/image.png?ssl=1] The squeeze on families’ incomes is still continuing, though not at quite the rate of last year (chart from ONS)

Apple vs Obama

A few people who read my letter to Apple [https://www.edmundconway.com/2012/10/dear-apple-im-leaving-you/] assumed for some reason that I’m an Apple hater – or indeed that I had foresworn Apple products entirely. They couldn’t be more wrong. I love Apple – always have and probably always will

Mario Draghi's misleading fact about the euro crisis

When asked about the health of the euro area at his press conference earlier today, Mario Draghi trotted out an old canard often used by his predecessor as European Central Bank President, Jean-Claude Trichet. He said that while it was easy to talk down the euro’s prospects, the fact

The amazing stuff the Bank of England could have bought with its £375bn

Now that the Bank of England has called a halt on its quantitative easing programme [http://www.bankofengland.co.uk/publications/Pages/news/2012/103.aspx] , it might be worth stepping back for a moment and considering the momentousness of what the central bank has done over the past three

Since 1986 the top 1% of UK earners...

[https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2012/11/image1.jpg?ssl=1] Since 1986 the top 1% of UK earners enjoyed real wages increases of 117%. The bottom 10% by only 47% (Bottom 1% by 70%)

Here’s a map of the LSE’s “Mafia...

[https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2012/11/image.jpg?ssl=1] Here’s a map of the LSE’s “Mafia Index”, showing organised criminality across Italy

Despite Heseltine Report the south’s...

[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2012/10/image.png?ssl=1] Despite Heseltine Report the south’s share of UK GDP will keep rising and the North’s will keep falling – Cap Economics

Dear Apple, I'm leaving you

There follows a letter to Tim Cook, chief executive of Apple: Dear Tim, There’s no easy way to put this so I’ll just come right out with it. I’m leaving you. It’s been great (mostly) but it’s over. I figured the least I could do

Unequal world: enormous gulf in incomes between countries and regions

Brilliant graphic from the OECD showing the disparity in disposable incomes between different regions. As you can see, disposable incomes in the richest region of Paris (Ile de France) are roughly in line with the lowest-paid region of the United States. UPDATE (13:45): As a number of you have

Central London is no longer the most lucrative place in Europe

[https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2012/10/disposable.jpg?ssl=1] Before the financial crisis, inner London had the highest level of average disposable income (eg post-tax take-home pay adjusted for inflation) in Europe – peaking at almost €30,000 per person. According to Eurostat figures, it

Limited liability is the real issue with banks

Steve Cecchetti at the Bank for International Settlements hits the nail on the head in this speech on financial regulation [http://www.bis.org/speeches/sp121030.pdf] [pdf]: The fundamental problem is that the private interests of banks and bankers can diverge from those of society at large. This is

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[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2012/10/constructbad.jpg?ssl=1] Four years on from the start of the crisis, the output of Britain’s construction sector is still 18% down – worse than in the last two recessions. From a speech by Ben Broadbent of the

How GDP Is Put Together Really Matters

I’ve covered economics for a decade or so, but I confess that until very recently I didn’t really know what GDP really is. I mean, like most of you I knew it was the broadest and most widely-used measure of our economy’s health – that it determines whether

Did David Cameron just divulge tomorrow's GDP figures?

The Prime Minister caused a bit of a stir earlier today by apparently hinting that tomorrow’s GDP figures might be positive. In Prime Minister’s Questions David Cameron said “the good news will keep on coming”. Apparently some traders ended up making a turn [https://twitter.com/RedFxTrade/status/

Sir Mervyn's smackdown for Lord Turner

An interesting speech from the Bank of England Governor tonight – including, for the first time in a long while, a suggestion that the economy might well be starting to bounce back. But what most stands out from Sir Mervyn King’s speech in Cardiff was a pretty direct slap-down to

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[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2012/10/depositetc.jpg?ssl=1] The economic squeeze in a nutshell: before 2008 savings rates were well above inflation. Since then the reverse has been true

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[https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2012/10/NNIperhead.jpg?ssl=1] Staggering chart from ONS shows collapse in wealth this recession compared with previous slumps

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[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2012/10/realincomeperhead.jpg?ssl=1] UK has leapfrogged Belgium in terms of disposable income per head – but is still shy of France, Austria and Germany.

Is there a North-South divide in unemployment?

There’s no doubt there is a serious inequality between economic experience in different parts of the UK. This is manifesting itself in various different ways – as we’ll explore in a forthcoming series of pieces on Sky News. However, the recent improvement in unemployment has been felt in almost

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[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2012/10/financingneeds.jpg?ssl=1] By next year, the US will need to issue more debt (as a % of GDP) than Italy, Greece and, for that matter, any country save for Japan. (IMF figs)

OBR: so far, we're less reliable than the Treasury

When the incoming coalition Government established the Office for Budget Responsibility back in 2010, there were many in the UK economic cosmos who breathed a sigh of relief. Time and time again in the preceding years, the Treasury missed its economic and fiscal forecasts; Gordon Brown repeatedly borrowed more than

IMF: European banks emergency asset sale accelerates

European banks are in the midst of an emergency firesale of assets worth more than €10,000 (£8,000) for every single household in the continent, it has emerged. The warning from the International Monetary Fund came 24 hours after it slashed its growth forecast for Britain’s economy by

IMF: We All Underestimated The Pain of the Cuts

What if the fundamental assumptions upon which we’ve based our economic plans were flawed? What if Britain’s fiscal plan – the “plan A” we hear so much about – was predicated on an economic model which vastly underestimated the crippling economic impact of austerity? Those are the questions buried away

IMF's unwavering confidence in Plan A

A year ago, the International Monetary Fund said that Britain should only reconsider its fiscal plan if GDP was significantly worse than its forecast. At that point it was projecting economic growth of 2.3%. Roll on to today and the Fund has slashed its forecast for the UK economy

We're all in it together, unless you're an employee: Osborne's new employee share plan

Britain is facing the worst recession in living memory, the biggest financial crisis in history and the threat of an epochal currency collapse a few miles over the Channel. Against that backdrop it might seem odd that what the Conservatives are most at pains to talk about today is an

IMF: world financial system just as risky as before crisis

What if all the efforts to overhaul the financial sector in the wake of the crisis had yet to make us safer? What if, far from behaving themselves, the bankers and financiers involved in the last collapse were up to their old tricks again? If this were the case it

Britain's Marshall Plan? Vince's New Investment Bank

Vince Cable should be congratulated on having secured £1bn for the balance sheet of his new British Business Bank – if only for the fact that he managed to squeeze anything out of the Treasury. I’m told that up until last week, the Treasury was desperate not to provide any

100

[/content/images/wordpress/2012/09/100-copy.jpg]Precisely 100 minutes of music featuring some utterly brilliant songs, the majority of them out in the last few months. This is my first new mix of songs in what feels like ages, and it was a joy to put together. Hope it’

Ben Bernanke has just gatecrashed the US Presidential election

The Federal Reserve has just unveiled QE3 – its third round of quantitative easing. It has some traits in common with the first couple of rounds of QE: from the way it works (the Fed pumps cash into the economy by buying up bonds) to the fact that it comes alongside

Sorry - the euro crisis isn't over yet

The eurosceptic case against the single currency has suffered two sizeable blows in the past week. First was the European Central Bank’s (ECB) decision last week to buy up unlimited amounts of bonds [http://news.sky.com/story/981758/markets-boom-after-ecb-reveals-rescue-plan] to bring down struggling euro members’ borrowing costs. Then,

What The Bank of England Governor Job Ad Really Means

It’s arguably the most important unelected job in Britain, and on Friday it will, for the first time, be advertised. The role of Bank of England Governor will become available when Sir Mervyn King steps down next July. Historically, the succession has been decided privately by the Prime Minister

Here's what the Bank of England Governor ad will read

Will be placed in The Economist on Friday. No mention of salary, but Sir Mervyn currently receives £305,368. HM TREASURY Governor of the Bank of England The position of Governor of the Bank of England will fall vacant when Sir Mervyn King retires in June 2013. The Governor leads

OMT it's the ECB's bazooka

As weapons go, the bazooka is a pretty simple one: you take a hollow tube, shove a rocket inside, pull the trigger and watch the bang. The bazooka the European Central Bank has pulled out today is, well, of a different order of complexity. Starting with the name. You may

Monetary union is already breaking up - OECD

We are already witnessing a break-up of monetary union along national lines. Quite a statement – particularly given it comes from the chief economist of the Organization for Economic Co-operation and Development. For that is precisely how Pier Carlo Padoan described what you can see going on in Europe’s financial

The best economic charts you'll see for weeks

Ever wondered what inflation was like in the dark ages, or what the price of gold was in medieval times? Wonder no longer. Jim Reid of Deutsche Bank has helpfully collected together a whole load of magical historical statistics in his latest assessment of the markets.The overriding point is

Innovation: the Apple era vs Industrial Revolution

In the yards of coverage about the Apple vs Samsung battle [http://news.sky.com/story/977463/samsung-shares-plunge-after-apple-verdict], I’ve read quite a few justifications as to why it was right of the US court to demand that Samsung pay its competitor $1bn for infringing its patents. One economic one

New Business Bank: not as new as it looks

The collapse in the banking system has been bad for the entire economy [https://www.edmundconway.com/2012/08/why-do-britains-banks-always-win/]– but the people feeling it most are those who run and work for small and medium sized enterprises. They are too small to be able to raise money on capital

Bank Policymaker Calls For Less Financial Regulation

“We need less regulation – not more.” It’s hardly a fashionable idea these days, with the world still reeling from the biggest financial crisis since the Great Depression. As far as many are concerned, it was a lack of financial regulation which got us into this mess to start with.

Don't pre-judge it: instant take on Bernanke's Jackson Hole speech

They expected something special. They expected a speech which would set the stage for another round of quantitative easing. They expected a speech which would yank the US back from the brink of recession again. In the event, what investors got was, well, a disappointment. It might be worth asking

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[https://i2.wp.com/www.edmundconway.com/wp-content/uploads/2012/08/housespend.jpg?ssl=1] UK household spending is currently more than 6% below its pre-crisis peak (source: Capital Economics)

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[https://i0.wp.com/www.edmundconway.com/wp-content/uploads/2012/08/20120831-141822.jpg?ssl=1] The US can usually borrow more cheaply than the UK. Today UK 10yr gilt rates are sub-1.5%, compared to over 1.6% for the US

Quick housing market update

According to Nationwide, house prices rebounded in August, rising by 1.3% – the biggest monthly increase since 2010. The annual rate of change is still negative, at -0.7%; and of course these figures disguise enormous disparities between different regions (most notably, prices in London are still buoyant, but they’

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The catastrophic collapse in lending to UK households since the start of the crisis

Why do Britain's banks always win?

Why is it that, even after the worst financial crisis in our history, after countless examples of wrongdoing and some flagrant examples of fraud, of blatantly excessive rewards for underperformance, we are still so reliant on our big banks? It is hardly a new question. Back in the wake of

Euro's make-or-break moment is looming

You have to hand it to the eurocrats of Brussels. The continent may be in economic turmoil; its biggest and most ambitious project is close to collapse and it is stuck in recession. And yet they still manage to engineer a month of relative calm so that they can enjoy

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Other than Japan, Britain has had the biggest collapse in GDP over the crisis of these major countries examined by the Bank for International Settlements

Is Mitt Romney Entirely Economically Illiterate?

One has to ask, because the latest idea being spouted by the Republican party is, in economic terms at least, madness. That idea, in case you missed it, is, in the words of the FT headline today, to “eye a return to the gold standard [http://www.ft.com/cms/

Britain's balance sheet recession

Imagine you’re a bank manager. You have a customer who keeps getting deeper and deeper into debt. You’ve set him targets for spending and borrowing but he has repeatedly missed them. A few weeks ago it transpired that his annual income had fallen even more than expected and

Why is unemployment defying gravity?

It’s the great conundrum of the UK economy today. Why is the labour market looking ever healthier, even as the economy slips into a double-dip recession? The latest labour market figures from the Office for National Statistics are almost uniformly positive: employment up, unemployment down, the number of people

How the Bank of England is making the rich even richer

We’ve suspected it for some time but now it’s been confirmed. Quantitative easing (QE) – the emergency economic measure carried out by the Bank of England (BoE) in recent years – has made the wealthy even wealthier. It has hardly benefited the poor at all – in direct asset terms, at

A Bad Time For Barclays To Ditch Free Banking

There is no such thing as a free bank account – just as there is no such thing as a free lunch. The reason most UK banks offer current accounts without fees attached to them is that the costs of running each account is generally recouped through the fees charged when

A permanent crisis of confidence for banking

The world has become more insecure – and that insecurity may last a generation. That’s the issue underlying Martin Wheatley’s investigation into Libor, which published an interim discussion paper [http://hm-treasury.gov.uk/d/condoc_wheatley_review.pdf] oday. Granted, that’s rather more profound than the immediate issue

Gold-Tinted Glasses

Gold-Tinted Glasses [http://www.mixcloud.com/edmundconway/gold-tinted-glasses/?utm_source=widget&amp;utm_medium=web&amp;utm_campaign=base_links&amp;utm_term=resource_link] by Ed Conway [http://www.mixcloud.com/edmundconway/?utm_source=widget&amp;utm_medium=web&amp;utm_campaign=base_links&

Britain can borrow at lowest rates in history

UK borrowing rates – lowest since William of Orange If you’re after one striking fact that shows you just how topsy-turvy are the economic times we’re living in, perhaps this one will do the trick. Despite having one of the biggest deficits in the Western world; despite worries about

The Euro Is Already Disintegrating

To the naked eye, the euro is still alive. From a financial perspective, on the other hand, it is already pretty much kaput. In just the same way as the currency union was preceded by an invisible rise in financial integration across the euro area, its demise is already being

The Looming European Bank Run

When is a bank run not a bank run? Spain and Greece have, as the charts below will attest, been facing an exodus of cash from their banks for the past year and a bit. Some €50bn of Spanish bank deposits have left the country since last January, while Greece

Ode 2 Joy

You have to hand it to the poor old euro. Always somehow capable of snatching defeat from the jaws of victory. There could hardly have been a more unpropitious time for the single currency, or indeed the broader European project. It is with that in mind, along with the European

The Moment The Bank of England Predicted The Financial Crisis

The Bank of England did see the crisis coming. It did make noise about it. It did foresee a banking collapse and a house price slump. It did see the recession coming. Given how much criticism the Bank’s Governor, Sir Mervyn King, has come in for in the wake

Britain’s IMF Contribution is Least Generous of All

Was George Osborne’s decision to provide $15bn (£10bn) to the International Monetary Fund designed to prevent him having to go to Parliament to vote it through? The Chancellor is adamant that it wasn’t. I asked him precisely that question when I spoke to him here in Washington. He

The Captain's Not For Moving: The Full Lagarde Interview

Here, for those who like these things, are the full quotes from our Christine Lagarde interview earlier today. The captain stays with the ship Given it’s the centenary of the sinking of the Titanic, the choice of metaphor was probably a little unfortunate – but the message is clear nonetheless.

Britain Has World's Most Over-indebted Banking System

Britain now has the world’s most over-indebted banking system, according to new figures from the International Monetary Fund. The Fund’s Global Financial Stability Report has revealed that the total gross debt of Britain’s banks is equivalent to 742% of the UK’s total economic output – equivalent to

The Global Financial Stability Report in Eight Easy Steps

The Global Financial Stability Report [http://www.imf.org/external/pubs/ft/gfsr/2012/01/index.htm] is the IMF’s big assessment of how well the world’s financial system is holding up. To save you from having to read the whole thing here, in a few key pictures,

The IMF's World Economic Outlook In Pictures

The International Monetary Fund’s World Economic Outlook is an intimidating beast – the most comprehensive and well-respected survey of the global economy. So rather than go through the entire thing, which you’re welcome to do at your leisure [http://www.imf.org/external/pubs/ft/weo/2012/01/index.

Any takers for the toughest job in Britain?

Wanted: a unique candidate for Britain’s biggest economics job. Must thrive in high-stress situations. Economics background preferable. Backstabbing and spinning skills helpful. Some job experience optional. Salary: £375,000 plus almost limitless spending money (£325bn or as much as you can print). Applications to 10 Downing Street; don’t

Are We Getting Too Social?

There is nothing particularly original about what Instagram does. When it started 552 days ago, the company wasn’t really offering anything you couldn’t get elsewhere. You’ve been able to share photos over the web for years. You were able to create vintage-style shots on your smartphone through

What Beer Tells You About The Fate Of The Euro

[https://i1.wp.com/www.edmundconway.com/wp-content/uploads/2012/08/48c3a4c8-8a46-45b7-96a8-8d3ded09956d.Full_.jpg?ssl=1] How much does a pint of beer cost? The answer, of course, depends on where you’re buying it. I can tell you that if you’re in a tavern in Athens, the answer

What The Bank of England Could Buy With Its Billions

So the Bank of England will now spend a whopping £325bn on its quantitative easing programme. Clearly there are some big questions: about whether the Bank was right to resume its pumping operation today – in the face of relatively encouraging news on the UK economy – and, perhaps more importantly, whether

Electronic

Electronic [http://www.mixcloud.com/edmundconway/electronic/?utm_source=widget&amp;utm_medium=web&amp;utm_campaign=base_links&amp;utm_term=resource_link] by Ed Conway [http://www.mixcloud.com/edmundconway/?utm_source=widget&amp;utm_medium=web&amp;utm_campaign=base_links&

Sensation

[https://www.edmundconway.com/2011/12/sensation/sensation/] Some amazing songs both from the past few months and one or two from a little longer ago. Sensation, by Ed Conway [https://www.edmundconway.com/Site/Media/sensation.mp3] Subscribe to my podcast (iTunes) [itpc://feeds.feedburner.com/EdmundosPodcast] Tracklist: Rain

The European Central Bank is already "printing money"

The European Central Bank must not print money. Printing money is inflationary, evokes episodes of hyperinflation in the past which makes it repellent to the people of Germany. It would be tantamount to economic disaster. All familiar points – we’ve heard them from Angela Merkel countless times in recent weeks,

It's Only Music

[https://www.edmundconway.com/2011/09/its-only-music/onlymusic/] It’s been a while, but here is a selection of my latest and greatest favourite songs. Hope you enjoy. It’s Only Music [https://www.edmundconway.com/Site/Media/onlymusic.mp3] Subscribe to my podcast (iTunes) [itpc://feeds.feedburner.com/EdmundosPodcast]

Eurozone leaders' comedy of errors brings monetary union to the brink

‘I love deadlines. I like the whooshing sound they make as they fly by,” said Douglas Adams. There’s a thin line between tragedy and comedy, and this weekend the finance ministers of the euro area blundered over it. They gathered in Washington in the shadow of the darkest economic

Bankers pay too low a price for high risks; The Vickers reforms won't go far enough – limited liability should be abolished for banks

Today, Sir John Vickers publishes his Independent Banking Commission’s report into the problems and solutions for the financial system. The contents of the report – a few hundred pages in total – are likely to be largely as predicted: the ring–fencing of retail banks from their investment arms, plus new

Sir John Vickers' banking report: bankers pay too low a price for high risks

Today, Sir John Vickers publishes his Independent Banking Commission’s report into the problems and solutions for the financial system. The contents of the report – a few hundred pages in total – are likely to be largely as predicted: the ring-fencing of retail banks from their investment arms, plus new capital

Abandoning the gold standard was a seminal moment, and one we're now all paying for

Roll out the bunting. Tomorrow is the 40th anniversary of the modern global economy. That’s right: come Monday morning we will have managed to survive four decades of fiat money – though, given the chaos in markets in recent weeks, it is anyone’s guess how much longer it will

My year at Harvard

When, earlier this summer, eagle-eyed snappers caught Ed Miliband lugging a pile of holiday reading off to Devon with him, the book that most commentators fixated on was one called Leadership on the Line. What did this choice say about the Labour leader? Had he suffered a crisis of confidence?

News

[https://www.edmundconway.com/2011/07/news/dsc_2344/] My latest mix, put together on Fri 8 July, containing all my favourite music from the past few months. Enjoy. News by Edmundo [https://www.edmundconway.com/Site/Media/News.mp3] Subscribe to my podcast (iTunes) [itpc://feeds.feedburner.com/EdmundosPodcast]

Forget Greece, Germany should exit euro

Imagine you’re in charge of Europe. Not, I grant you, the opportunity of a lifetime, but let’s narrow down the job description to one specific question. The only way you can save the single currency is to eject one country from the eurozone. So, who is it to

Why Germany must exit the euro

Imagine you’re in charge of Europe. Not, I grant you, the opportunity of a lifetime, but let’s narrow down the job description to one specific question. The only way you can save the single currency is to eject one country from the eurozone. So, who is it to

Better Fitter Happier

[https://www.edmundconway.com/2011/04/better-fitter-happier/dsc_0254/] Listening to this will make you better, fitter, happier than you’ve ever been before. Or your money back.Better Fitter Happier by Edmundo [https://www.edmundconway.com/Site/Media/Nails.mp3] Subscribe to my podcast (iTunes) [itpc://feeds.feedburner.com/

The sorry story of the credit rating agencies

First published in the Telegraph on 31 December 2010 We all know how atrocious a job the credit rating agencies did in the run-up to the financial crisis. And yet far from sinking into obscurity and irrelevance, as one might have assumed, they have if anything become more influential. Now,

Why WikiLeaks could be great news for the White House

First published in the Telegraph on 14 December 2010 ”I know in the Ten Commandments it says ‘Thou shalt not lie’. But if the Elephant Man came in here now, with some lipstick on, and a nice dress, and said, ‘how do I look?’ would you say, Lynn – bearing in

How Wikileaks is copying 16th-century Amsterdam

First published in the Telegraph on 1 December 2010 There was a period when British MPs would spend their every night quivering at home in terror as they waited for the latest in the Telegraph’sexpenses revelations [http://www.telegraph.co.uk/news/newstopics/mps-expenses/]to break, hoping and praying

How the Tea Party is brewing up trouble for the world's currencies

When, decades in the future, historians write the definitive account of the great economic crisis of the early 21st century, the chances are they won’t waste too much ink on the G20 summit that just concluded in Seoul. Or will they? For the past few months, leaders from the

Why the iPad will take over the world

Apple is on the verge of releasing the latest iteration in its operating system for the iPhone and iPad. Sometime in the coming months, it is also likely to bring out a newly beefed up version of the iPad. These may not seem like particularly momentous moments to anyone but

10,000ft

[https://www.edmundconway.com/2010/11/10000ft/ed-13/] Here, mixed and shaken up and ready to serve, is a collection of my favourite tracks from recent months. 10,000ft by Edmundo [https://www.edmundconway.com/Site/Media/10,000ft.mp3] Subscribe to my podcast (iTunes) [itpc://feeds.feedburner.com/EdmundosPodcast]

First Tony Blair, then Gordon Brown. What has poor old Harvard done to deserve this?

Yesterday I bought a ticket for the worst lottery ever. The jackpot? An hour-long lecture from Gordon Brown. The former Prime Minister is in Harvard next week, breaking his self-imposed silence to take on a visiting fellowship at the Kennedy School of Government. In most circumstances, I would have no

The Bank must reassure Britain it has not lost its grip on policy

First published in the Telegraph on 15 August 2010 What would you guess is the world’s most highly-geared financial institution? One of the lessons of the financial crisis – now gratifyingly drummed into most of us – is that if a bank tries to support a leviathan balance sheet atop a

The Bank must reassure Britain it has not lost its grip on policy

What would you guess is the world’s most highly-geared financial institution? One of the lessons of the financial crisis – now gratifyingly drummed into most of us – is that if a bank tries to support a leviathan balance sheet atop a tiny sliver of safe cash (shareholders’ capital) its prospects

West's recovery encounters hitch as harness slips off Chinese dragon

One of the stories Mervyn King likes to tell is of the moment it dawned on him that recovery from what he calls the Great Recession would be almost as difficult as dealing with the crisis itself. Sitting at a summit listening to his fellow central bankers and finance ministers

Independence

[https://www.edmundconway.com/2010/07/independence/independence/] My final mix before upping sticks and heading for the US, compiled, appropriately, on Independence Day. Independence by Edmundo [https://www.edmundconway.com/Site/Media/Independence.mp3] Subscribe to my podcast (iTunes) [itpc://feeds.feedburner.com/EdmundosPodcast] Tracklist Life’s What You

Middle class families face a triple whammy

You don’t usually expect radical neo-Marxism from the International Monetary Fund – the last great bastion of capitalism, spreading the gospel about the free market to the furthest reaches of the world. And yet, hidden away in an obscure IMF report a few years back is a short sentence that

A triple whammy for the middle classes; Falling pensions, cuts and the banking crisis will impoverish many families, says Edmund Conway

First published in the Telegraph on 1 July 2010 You don’t usually expect radical neo-Marxism from the International Monetary Fund – the last great bastion of capitalism, spreading the gospel about the free market to the furthest reaches of the world. And yet, hidden away in an obscure IMF report

A kind of bye

First published in the Telegraph on 1 July 2010 Today is my final day in the Telegraph offices, where I’ve spent all but one year of my career since university. From later this month I will be back at university – at the Kennedy School of Government at Harvard, where

Please read this before trying to claim the Government is not cutting spending

First published in the Telegraph on 28 June 2010 Depending on who you listen to, Britain is facing either a spending squeeze the likes of which we haven’t seen since the 1920s or a healthy 9pc increase in Government spending over the course of the Parliament. So which is

Does the Coalition have the courage to carry out these cuts?

First published in the Telegraph on 24 June 2010 Since Angel Gurria is Mexican, I presume he is not a connoisseur of Yes, Minister. So when the head of the Organisation for Economic Co-operation and Development described George Osborne’s first Budget this week as “courageous”, I doubt he meant

Osborne delivers medicine for dealing with the deficit

First published in the Telegraph on 23 June 2010 BRITAIN must endure a period of austerity as deep and searing as the one which preceded the General Strike of the 1920s, following a Budget described by the Chancellor as “tough but fair”. George Osborne received plaudits from ratings agencies, international

Approval for cuts now, but beware the brickbats later

First published in the Telegraph on 22 June 2010 ONE of the perks of being Chancellor is that, alone among ministers, you are entitled to take a dram of whisky into the Commons with you to sip while you deliver your big set piece. For once, this is a tradition

Will we be a world-beater or an also-ran?

First published in the Telegraph on 17 June 2010 The trouble with granting people independence is that they often develop a mind of their own. George Osborne learnt this to his cost this week, when his new Office for Budget Responsibility (OBR) published its assessment of the British economy and

A little more nasty talk may yet be in order

First published in the Telegraph on 9 June 2010 WE Britons love it when our government talks nasty to us. If you don’t believe me, consult the history books. Every time a government has had to cut public spending, it has only done so after informing the public, in

The gamblers betting on Britain going bust

First published in the Telegraph on 3 June 2010 Since more or less the dawn of time, the British have loved to present themselves as that bit better – and better-off – than their counterparts overseas. Back in the 19th century, Gustave Flaubert’s not entirely sincere definition of Englishmen in his

European drama, but a global crisis; It is not just the euro that is under threat, but our entire system of free trade

First published in the Telegraph on 20 May 2010 It is now accepted, even by Angela Merkel, that as Europe battles its financial crisis, the very fate of the euro is at stake. Her belated discovery of this home truth is welcome, but she does not go far enough. The

The Greek horror story should scare us all

First published in the Telegraph on 29 April 2010 It has all the ingredients for a perfect Hollywood sequel. The cliffhanger plot kicks off right where its predecessor ended; the cast is stellar, some characters from the original reprising their roles. But this time the stakes are even higher, the

It's all Greek to me

First published in the Telegraph on 23 April 2010 Don’t be fooled into thinking that the Greek fiscal crisis, which today culminated in the stricken country officially requesting a bail-out package from the IMF and euro states, is an isolated problem. Although ministers are keen to try to characterise

Time to start worrying about higher interest rates

First published in the Telegraph on 20 April 2010 I doubt any of the politicians will spend much time today worrying about the increase in inflation just reported by the Office for National Statistics. In the grand scheme of things, with the country facing a serious economic crisis and a

We need a revolution in the tax system; The Tories need to stop tinkering at the margins and show same boldness

First published in the Telegraph on 8 April 2010 Just as Barack Obama did in the US last year, David Cameron wants “change” to be the rallying cry for the Conservative charge this election. Unfortunately, looking at his economic programme, he seems to stand for more of the same. Take

Four lessons from the National Insurance row

First published in the Telegraph on 8 April 2010 National Insurance turns 100 next year, an anniversary which looks likely to be marked by about as much controversy as its birth. Back in 1911, the fuss surrounded the creation of the early welfare state (which NI was set up to

How to understand Japan

First published in the Telegraph on 15 March 2010 I’ve just returned from a fascinating trip to Japan, where, as a guest of the Keizo Koho Centre – the economics offshoot of their business lobby – I was trying to get my head round the place, and work out what lessons

We have to learn from Japan's lost years The turbulence in the currency markets is a welcome warning sign, says Edmund Conway

First published in the Telegraph on 4 March 2010 Here in Japan, one of the first things everyone wants to discuss, once they find out that you’re from the UK, is the prospect of a hung parliament. The second is the collapse of the pound. The third is the

We must arm ourselves for a class war

First published in the Telegraph on 25 February 2010 If you don’t work in the City or in economics, you may not have heard of the annual Mais lecture, which was delivered last night by George Osborne. But it’s a big deal, arguably the most important set-piece speech

Don't panic about inflation - that can wait

First published in the Telegraph on 18 February 2010 Back in the good old days, economics used to be about numbers, charts and dweebs with calculators. These days, it turns out, it is all about letters. For while those of us in the real world have moved on to email,

The financial reporting bubble

First published in the Telegraph on 12 February 2010 Sorry, but I’m afraid I’m about to embark on a rant. I’ve tried to hold this one in, but I can no longer contain myself. Two particular features of financial (and other) journalism irritate me on such a

Greece could bring euroland to its knees

First published in the Telegraph on 11 February 2010 Pigs are dispensable; or, at least, so says the Ministry of Defence, which yesterday owned up to detonating more than 100 of the poor sow-and-sows in its bid to improve the lot of soldiers blasted by roadside bombs in Iraq and

It is essential that Britain learns from the crisis that has plunged Greece into turmoil

First published in the Telegraph on 4 February 2010 It was one of those moments that can only happen in a place like Davos. There I was last week, having a coffee and minding my own business, when from a nearby table I heard a desperate voice. I assumed it

A jubilee could be the answer to our prayers

First published in the Telegraph on 14 January 2010 A few decades ago, archaelogists digging in modern-day Iraq made a remarkable discovery: the world’s first-known legal contract. The inscription was carved, 4,400 years ago, in Cuneiform text on the bricks of a temple in ancient Lagash, somewhere between

The 'experts' who stopped making sense

First published in the Telegraph on 31 December 2009 After a night at the orgy, the ancient Romans would cure their hangovers by stuffing themselves with deep-fried canaries. The Greeks favoured frying up sheep’s lungs. For decades, we Britons have relied on bacon sandwiches to soak away the headache

I’m dreaming of a cashless Christmas

First published in the Telegraph on 24 December 2009 If you’re anything like me, this was the day you finally realised it was time to start shopping for presents. Of course, if there’s one day you don’t want to be stuck in a queue at the cashpoint,

There's only one escape from our debt trap

First published in the Telegraph on 17 December 2009 Something important happened this week: for the first time since the start of the financial crisis, investors demanded a bigger premium in return for holding British debt than Spanish. Indeed, the cost of our government borrowing – as measured by the interest

There's only one escape from our debt trap

First published in the Telegraph on 17 December 2009 Something important happened this week: for the first time since the start of the financial crisis, investors demanded a bigger premium in return for holding British debt than Spanish. Indeed, the cost of our government borrowing – as measured by the interest

The deal that really could save the world

First published in the Telegraph on 3 December 2009 Did you know that one of the main causes of the spread of Aids is truck drivers? In the early days of HIV, a study showed that more than half of all freight drivers in Africa had the virus, and more

Shock news - Britain still makes things

First published in the Telegraph on 26 November 2009 As Britons, we tend to think about our economy in the same way as our national sports teams. We know we should be world-beaters, but deep down suspect we’re doomed to perennial disappointment. Lifting the World Cup is all very

You don't need a Bill to cut the budget deficit

First published in the Telegraph on 19 November 2009 Let’s kick off with a multiple-choice question. Yesterday, the Queen announced that the next government will be forced, under a new Fiscal Responsibility Bill, to halve the budget deficit in four years. Afterwards, did the gilt markets – the ultimate judge

China's economic miracle is a fragile one

First published in the Telegraph on 12 November 2009 Every economist has a favourite fact about the Chinese economy. Mine is this: every month, the country generates so much surplus cash from trade that it could afford to go out and buy three of Britain’s biggest companies – say, British

Balearic Chic

Balearic Chic by Edmundo [https://www.edmundconway.com/Site/Media/novmix.mp3] Subscribe to my podcast (iTunes) [itpc://feeds.feedburner.com/EdmundosPodcast] Tracklist: Carry On Turn Me On (The Time & Space Machine Remix)- Space Cosmic Rave – Junkie XL Passion (Motor City Drum Ensemble remix) – Tom Trago Love On

Our black gold is dragging us into the red

First published in the Telegraph on 5 November 2009 What was the industry that powered Britain towards prosperity in the 1980s, and made us one of the most dynamic and successful nations in the Western world? I’ll give you a clue: it was described by a prime minister as

A social timebomb is set to explode in Britain

First published in the Telegraph on 29 October 2009 One of my favourite moments from the television series The Wire comes towards the end of the first season. Two of the police officers who have been monitoring drug dealers arrive one morning to find that the area is deserted: no

Up creek, no paddle, blindfolded, without map

First published in the Telegraph on 22 October 2009 We are letting this crisis go to waste. This is not a new sentiment, but when coming from the lips of the Governor of the Bank of England, it carries a certain added weight. If Mervyn King didn’t put it

Britain's secret weapon against a fiscal crisis

First published in the Telegraph on 22 October 2009 Warning: this blog is about the government debt market. But hold on – before you click the “back” button or expunge this blog from your RSS feed, know this: it is also, by extension, about two of the biggest questions facing us

Bonanza! A year ago, the financial system was in meltdown and bankers were the villains of the piece. So how can it be that Goldman Sachs and JP Morga

First published in the Telegraph on 16 October 2009 Anyone looking for an example of the bizarre turn our mutant economy has taken in the wake of the financial crisis should have been in Istanbul a couple of weeks ago. In the granite conference centre that looms over one of

What the economic crisis needs is 'The Wire'

First published in the Telegraph on 15 October 2009 The “definitive” take on the financial crisis most probably will not be written for some decades. Neither Galbraith’s nor Friedman’s accounts of the depression appeared until some decades after the 1930s – and even now the depression is still being

Britain can still be a power in a changing world

First published in the Telegraph on 9 October 2009 It was not the decoration of the Hagia Sophia that left Alistair Darling’s mouth agape last week, nor the grandeur of its dome. It was the fact that this place of worship, in the heart of Istanbul, was built more

An inconvenient truth: crises are inevitable

First published in the Telegraph on 1 October 2009 The story will be instantly familiar to anyone who has read The Hitchhiker’s Guide to the Galaxy: some of the world’s most intelligent beings decide they want to know the answer to the Ultimate Question; they spend years creating

We are entering a new age of protectionism

First published in the Telegraph on 24 September 2009 When Barack Obama, Gordon Brown and their colleagues in the G20 conclude this week’s summit in Pittsburgh, at least one item in the final communiqué is a dead cert. As they did in London six months ago, and Washington six

Osborne's secret weapon to cut the deficit

First published in the Telegraph on 9 September 2009 Within the next nine months, George Osborne should become the youngest Chancellor of the Exchequer since Lord Randolph Churchill in 1886, at just over 39 years of age. By most yardsticks, it ought to be a magnificent achievement. The problem is,

Boom and bust capitalism won't be fixed

First published in the Telegraph on 3 September 2009 There is a hideous hissing noise escaping from the world economy, the piercing sound of deflating ambitions. Any hopes that, in this crisis, we would find an opportunity to redesign our system of capitalism and finance are all but forlorn. Any

How to save the economy and make a fortune - set up a bank

First published in the Telegraph on 19 August 2009 What would you say if I told you I had discovered a solution to the credit crunch? One that didn’t involve throwing billions in good (taxpayers’) money after bad (bankers’); one that would leave the country and the economy in

The empty crisp bag that shows how Britain is beating recession

First published in the Telegraph on 13 August 2009 Isaac Newton’s epiphany came courtesy of an apple; mine was down to an empty packet of crisps. A bright green packet of Walkers’ salt and vinegar crisps, to be precise, which slapped into my goggles as I tumbled down the

Beware - our sins may return to haunt us

This article was first published on the Telegraph on 6 August 2009 The year is 2010. The Tories have won the general election and the stage is set for the long road to recovery. As David Cameron and George Osborne huddle in Downing Street, an adviser enters with baleful news.

Economic crisis, and a crisis for economics

First published in the Telegraph on 30 July 2009 Some things can be reliably forecast: the movements of the planets, the boiling point of water, the likelihood that an English sports team will fail dismally in at least one tournament a year. But the rest of life is far more

A recession for the many, not the few

First published in the Telegraph on 23 July 2009 This was supposed to be a middle-class meltdown – a “risotto recession”, as I labelled it last year. The Government even set out emergency plans to help job centres cope with an influx of unemployed City bigwigs, corporate lawyers and hedge fund

Brace yourselves for a miserable recovery

First published in the Telegraph on 9 July 2009 It’s a game of far more than two halves: more tactical than cricket, more stomach-churning than boxing and more complex than bridge. Throughout a magnificent summer of sport, one competition has lasted longer than any other, and generated the most

A dangerous time to go into political denial

First published in the Telegraph on 2 July 2009 Yesterday’s instalment of Prime Minister’s Questions made clear that we are at the start of a lost year for policy-making. Real decisions, real debates are now off the table. We are left instead with dreary volleys back and forth:

An Englishman doesn't have to own his castle

First published in the Telegraph on 25 June 2009 Most of us have a vague notion that home ownership is a peculiarly British thing. We entertain Arcadian fantasies about our houses and gardens, assuming that having your own slice of this green and pleasant land is part and parcel of

The Summer Celebration

As heard at the summer celebration at the Muse Summer Celebration by Edmundo [https://www.edmundconway.com/Site/Media/summercelebration.mp3] Subscribe to my podcast (iTunes) [itpc://feeds.feedburner.com/EdmundosPodcast] Tracklist: Crockett’s Theme – Jan Hammer Raise the Roof (Beyond the Wizard’s Sleeve Re-Animation) – Tracey Thorn Lisztomania (Classixx

Brutal truths in the banqueting hall The banks aren't being fixed - and Mervyn King knows who's to blame

First published in the Telegraph on 19 June 2009 The financial and economic crisis has led to a Cold War between the Treasury and the Bank of England, and this week saw its equivalent of the Cuban missile crisis. The setting was the gilded banqueting hall of the Mansion House

Back from the dead - but watch out for zombies Debt - public and private - could still be our undoing

First published in the Telegraph on 11 June 2009 In their unguarded moments, policymakers at the Bank of England and the Treasury like to compare themselves to MI5. The tools of the trade may be different – interest rates and taxes, rather than wires and guns – but the purpose is the

We're still waiting for a banking shake-up So far, the punishment does not fit the crime

First published in the Telegraph on 4 June 2009 At first glance, the expenses scandal is a crisis with plenty of losers and no winners. It undermines politicians, the country’s constitutional framework and the foundations that have historically made Britain a great place for people to invest. But one

Only a new Bretton Woods will solve this crisis

28 May 2009 Earlier this week, a group of America’s most intelligent and influential thinkers published a report heralded as the definitive solution to the financial crisis. The Committee on Capital Markets Regulation’s study is getting on for 300 pages, so let me give you the gist: we

We'll have to work until we drop

First published in the Telegraph on 7 May 2009 When she died six years ago, there was little on the face of it to distinguish Gertrude Janeway from any other elderly American. Bedridden for the best part of a decade, the 93-year-old from Tennessee spent her final days contemplating her

KK's Party

This is my set from KK’s party on Mayday bank holiday weekend. Lots of familiar stuff. Shamelessly cheesy and loads of fun to mix up… KK by Edmundo [https://www.edmundconway.com/Site/Media/KK.mp3] Subscribe to my podcast (iTunes) [itpc://feeds.feedburner.com/EdmundosPodcast] Tracklist: Tubular Bells

Mayday Mix

Mayday Mix by Edmundo [https://www.edmundconway.com/Site/Media/Mayday.mp3] Subscribe to my podcast (iTunes) [itpc://feeds.feedburner.com/EdmundosPodcast]

Trusting to luck isn't going to help Obama

First published in the Telegraph on 30 April 2009 Barack Obama is a pretty superstitious guy. During the marathon presidential campaign, he made a routine of playing basketball on each of the various polling days, and carried with him a pocketful of lucky trinkets, including a poker chip and a

Our borrowing would pay for a world war

First published in the Telegraph on 23 April 2009 There is a long-observed tradition in the Treasury on Budget Day: civil servants, economists and advisers leave their desks, file downstairs and watch the Chancellor deliver his speech on the big screens in the canteen. The atmosphere is usually pretty festive

Even the Great Depression had green shoots We will repeat the 1930s if we stop the stimulus too soon

First published in the Telegraph on 9 April 2009 What does a Great Depression feel like? Everyone has seen the pictures of the breadlines and the starving families in the American Dust Bowl; everyone knows about the deprivation, the suicides and the despondency. Today doesn’t feel like the 1930s.

Economic horror show is reaching its climax

First published in the Telegraph on 19 March 2009 In the horror movie that is the UK recession we are rapidly approaching the climax. Those early scenes when blissful ignorance turned to trepidation and then suspense are over. The ghastly face of this ordeal has emerged from the shadows. It

This is how depression looked in the 1930s; Politicians are posing rather than acting

First published in the Telegraph on 12 March 2009 No-business meetings, John Kenneth Galbraith called them. They sprout in the wake of a crisis like weeds in scorched earth, nourished by the overwhelming sense that Something Must Be Done. Men gather, they sit in a room, they look pious; they

Green Shoots

Green Shoots by Edmundo [https://www.edmundconway.com/Site/Media/springmix.mp3] Subscribe to my podcast (iTunes) [itpc://feeds.feedburner.com/EdmundosPodcast] Tracklist Otto’s Golden Journey (Andy Webb’s Dreamy Blend) – Whitest Boy Alive Down In L.A. (Shazam Vocal Remix) – Munk Who is he? (Henrik Schwarz edit) – Bill

If you see green shoots, it's time to watch out

First published in the Telegraph on 26 February 2009 It is that time of the year. The frost is starting to give over, the cold weather is abating, the days are lengthening, and before long the leaves will be sprouting on the trees. That’s right: it’s green shoots

RECESSION BRITAIN It's bad - but it's worse for everyone else

First published in the Telegraph on 19 February 2009 Perhaps in the end it all comes down to the Great British psyche: the subconscious yearning to be the underdog, the knee-jerk reaction that prompts us to say “no” when we mean “yes”. For whatever reason, from the earliest throes of

So, just how bad will it be?

First published in the Telegraph on 11 February 2009 You say depression, I say recession. Depression, recession, depression, recession – what difference does it make? Given that everyone from the Prime Minister, Gordon Brown, and his former adviser Ed Balls to the head of the International Monetary Fund have admitted that

There is no alternative Desperate measures to deal with the financial crisis are the only way to avoid a prolonged recession, insists Edmund Conway

First published in the Telegraph on 9 January 2009 Time for a controversial statement: the economic medicine might just be working. The Government and the Bank of England’s drastic attempts to rescue the financial system from collapse and the economy from a depression could actually succeed. This is, it

I’m partly to blame for the recession

First published in the Telegraph on 5 January 2009 Daddy, what did you do in the credit crunch? As we sit around the embers of the financial system it is time I got something off my chest: I must take some responsibility for the economic crisis. This may come as

The last throw of the dice - now comes judgment day

First published in the Telegraph on 12 October 2008 As the sun sets tonight, so begin the longest few hours the financial world has ever known. We will wait in nervous silence as the time ticks steadily on towards 1am – judgment hour for the world economy. That is the moment

Dithering will make Britain the sick man of the global crisis

First published in the Telegraph on 5 October 2008 Here they come – the credit crunch cavalry; here to sweep us away from all this economic misery. In they waft from the five-star hotels and embassies of Washington, carried aloft on a ribbon of dry ice and dollar bills. The crowd

The next decade could be our own 1930s

First published in the Telegraph on 27 September 2008 For the first time in as long as I can remember, I find myself on George W. Bush’s side. It’s rather lonely. The US President has been wrong about so much during his eight years in office that it

Yes, we're in for a tough time, but it's not the end of the world

First published in the Telegraph on 1 August 2008 Contrary to the received wisdom, life does not grind to a halt in a recession. It didn’t in the early 1990s and it won’t this time around. Yes, I know that house prices are falling at the fastest rate

Fasten your seat-belts: things will get worse

First published in the Telegraph on 11 June 2008 It had to happen sooner or later. We have an economic disaster that cannot be blamed on Gordon Brown. No, not the collapse of Northern Rock, which the Prime Minister wrongly tried to attribute to problems in the American sub-prime market.

History is repeating itself, to the bitter end

First published in the Telegraph on 15 May 2008 The twilight years of Labour governments are always like this: the pound in freefall, the economy sliding towards a possible recession and the public finances out of control. And the ultimate bill left in the hands of households, blameless in every

Tighten your belts: this is going to hurt

First published in the Telegraph on 11 October 2007 We Britons tend to import stuff. It won’t have escaped your notice that the vast majority of things you buy in the shops these days – whether it’s trinkets, televisions or toys – comes from foreign climes. To this long list,

In the chaos economy, one man's debt is the whole world's burden

First published in the Telegraph on 14 September 2007 Globalisation is eating itself. The past few weeks have seen the world’s financial system turn itself upside down. Not so long ago it was the bankers who decided the fate of the lowliest in society. Now, in a bizarre reversal