Chief Economist’s Weekly Brief – Breaking (almost) all the rules

bw2_1121-copyLower growth forecasts meant the Chancellor had some tough choices to make in last week’s Budget. By pressing ahead with business and personal tax cuts now he chose to postpone a big chunk of austerity until the final year of this parliament. Austerity will have to be extended unless productivity and wages stage a dramatic recovery.

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Economic Gongs: Best actors in an increasingly unpopular drama


There is an increasingly unpopular drama unfolding in the global economy. It’s not quite the epic of 2007/8. But it certainly has economists and investors gripped, as we have witnessed the Big Short on oil prices and a Revenant-style bear market that has mauled the share prices of the stock markets’ biggest stars. Continue reading

An action-packed and politically charged budget

Economy photoDownload an extended note on the Budget here.

The 2015 general election was a speed camera for austerity, or so we thought. Given the content of the Budget back in March, the chancellor had been expected to put his foot down on the austerity accelerator. Instead, however, he is set to keep the austerity drive in cruise control, with the pace to remain steady.

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‘Comeback Country’ or Brokeback Debt Mountain?

One pound coin on fluctuating graph. Rate of the pound sterling

This is an extended version of an article appearing in today’s Belfast Telegraph Business Month published 13th April 2015.

Last month the Chancellor of the Exchequer delivered his sixth and perhaps final Budget. It was his most polished delivery to date. After five years of austerity, anyone listening to the 8,000 word speech would have felt uplifted.  Today, I report on a Britain that is growing, creating jobs and paying its way. We took difficult decisions in the teeth of opposition and it worked – Britain is walking tall again.”  The Chancellor highlighted that last year the UK expanded at a faster rate than any major advanced economy and “more people have jobs in Britain than ever before”. Meanwhile the UK’s much maligned “deficit” as a share of national income has halved over the last five years.

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Time to put economy where our mouth is?

Delivering a Budget is as much to do with presentation as it is fiscal substance, and any good Chancellor will have an acute sense of how things are going to play with the media and electorate. This means having up their sleeve a raft of populist policies that will take the limelight away from some of the more unpalatable realities.

Yesterday’s Autumn Statement was no exception, with a disproportionate amount of attention being focused on politically-savvy but relatively insignificant measures such as the abolition of Air Passenger Duty for under-12s.
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