A Yes supporter just got phone canvassed by Scottish Labour.
First, they asked him how he intended to vote in the IndyRef. He replied: Yes.
Then, fascinatingly, they asked if he intended to vote Labour in the first GE to the independent Scottish parliament.
The Scottish Labour Party are making pragmatic preparations for independence. You heard it here first.
Our man on the spot in Uppsala.
I'm afraid we're at that point where leaves blowing in the autumn breeze will be ascribed a special significance.
30 days of boring bollocks to go. Where's the fast forward button ?
60:40. Next.
well I suppose I must concede something to Salmond in that his lastest fatwa on currency is an even more untenable position that the last one, The squirming should keep us amused for the next couple of weeks.
As ever he's trying to square a circle by using a triangle.
Don't you have to have some professional qualification 'a driver's test' before being allowed to drive in F1? Any road up if it walks like a gimmick quacks like a gimmick then its a gimmick. There presumably is money following him around - this is F1 after all.
The breaking news is that WIND is reporting to the JNN the contents of the latest ARSE 2015 General Election and "JackW Dozen" Projections. (Change from 5th August Projection) :
Con 314 (+2) .. Lab 273 (-3) .. LibDem 32 (+2) .. SNP 8 (-1) .. PC 2 .. NI 18 .. UKIP 1 .. Respect 0 .. Green 1 .. Ind 0 .. Speaker 1
Conservatives 12 seats short of a majority Labour 53 seats short of a majority ......................................................................................
"JackW Dozen" - 13 seats that will shape the General Election result :
Bury North - Likely Con Hold Pudsey - TCTC Broxtowe - Likely Lab Gain Warwickshire North - Likely Lab Gain Cambridge - Likely LibDem Hold Ipswich - TCTC Watford - TCTC Croydon Central - Likely Con Hold Enfield - TCTC Cornwall North - TCTC Great Yarmouth - Con Hold Vale of Glamorgan - Con Hold Ochil and South Perthshire - Likely Lab Hold
Changes From 5th August - Bury North moves from TCTC to Likely Con Hold
TCTC - Too Close To Call - Less than 500 votes Likely Hold/Gain - 500 - 2500 votes Gain/Hold - Over 2500 votes .......................................................................................
WIND - Whimsical Independent News Division JNN - Jacobite News Network ARSE - Anonymous Random Selection of Electors
Neo-liberals pushing for an interest rate rise confounded again.
Deflation alert?
Alarmist much! Surely this is a good thing for people struggling with the cost of living.
It's quite something that Osborne has managed to engineer a cost of living crisis with inflation crashing through the floor.
A clear example of Osborne's glaring incompetence. Still, he'll be out of office soon.
As someone who has little time for Osborne, even I wouldn't call that bit of good news bad.
In the same way super low gilt yields absolutely does not mean everything's great in the economy or fiscal management (despite foolish Tory attempts to paint it otherwise), inflation heading towards 1% isn't great either as the ECBs much-too-late, desperate attempts to stoke inflation proves.
There should be inflation pressure should there not, if the economy was properly recovering?
And a cost-of-living crisis with inflation at 1.6%? How did Osborne get us into this mess? (Blinkered ideology is the answer of course)
Mr. Flightpath, you need a super licence, which I think requires X number of miles driven in an F1 car (he'll get the licence, for certain, apparently).
Money's always helpful but I doubt Toro Rosso needs it the way some teams do (it's owned by a billionaire).
Neo-liberals pushing for an interest rate rise confounded again.
Deflation alert?
Alarmist much! Surely this is a good thing for people struggling with the cost of living.
It's quite something that Osborne has managed to engineer a cost of living crisis with inflation crashing through the floor.
A clear example of Osborne's glaring incompetence. Still, he'll be out of office soon.
As someone who has little time for Osborne, even I wouldn't call that bit of good news bad.
In the same way super low gilt yields absolutely does not mean everything's great in the economy or fiscal management (despite foolish Tory attempts to paint it otherwise), inflation heading towards 1% isn't great either as the ECBs much-too-late, desperate attempts to stoke inflation proves.
There should be inflation pressure should there not, if the economy was properly recovering?
And a cost-of-living crisis with inflation at 1.6%? How did Osborne get us into this mess? (Blinkered ideology is the answer of course)
How's EdM's socialist pal Hollande doing in France ?
Neo-liberals pushing for an interest rate rise confounded again.
Deflation alert?
Alarmist much! Surely this is a good thing for people struggling with the cost of living.
It's quite something that Osborne has managed to engineer a cost of living crisis with inflation crashing through the floor.
A clear example of Osborne's glaring incompetence. Still, he'll be out of office soon.
As someone who has little time for Osborne, even I wouldn't call that bit of good news bad.
In the same way super low gilt yields absolutely does not mean everything's great in the economy or fiscal management (despite foolish Tory attempts to paint it otherwise), inflation heading towards 1% isn't great either as the ECBs much-too-late, desperate attempts to stoke inflation proves.
There should be inflation pressure should there not, if the economy was properly recovering?
And a cost-of-living crisis with inflation at 1.6%? How did Osborne get us into this mess? (Blinkered ideology is the answer of course)
There has been inflation pressure or don't you listen to EdM ?
That inflation pressure has eased for one month is hardly armageddon. If it goes on for the next 6 months you might have a point. But filling up for 125.9p a litre instead of 130.9p two months ago is a welcome relief, it's not a deflation spiral.
SNAFU - I have time for that one - It's a military term rather than business-speak. But please use the correct F or STFU ;-) FUBAR is another favourite.
(working in Software Development and Support, I hear these 2 a lot)
1.6% -petrol is down. The strong pound helping keep inflation low
So are Aldi and Lidl as they force the supermarket giants to cut their prices in a desperate attempt to avoid losing further volume to the discounters. This battle and therefore its effect on inflation is only just beginning.
Neo-liberals pushing for an interest rate rise confounded again.
Deflation alert?
Alarmist much! Surely this is a good thing for people struggling with the cost of living.
It's quite something that Osborne has managed to engineer a cost of living crisis with inflation crashing through the floor.
A clear example of Osborne's glaring incompetence. Still, he'll be out of office soon.
As someone who has little time for Osborne, even I wouldn't call that bit of good news bad.
In the same way super low gilt yields absolutely does not mean everything's great in the economy or fiscal management (despite foolish Tory attempts to paint it otherwise), inflation heading towards 1% isn't great either as the ECBs much-too-late, desperate attempts to stoke inflation proves.
There should be inflation pressure should there not, if the economy was properly recovering?
And a cost-of-living crisis with inflation at 1.6%? How did Osborne get us into this mess? (Blinkered ideology is the answer of course)
But who in the government wants to raise rates, Carney has been looking for basically any reason not to do it.
Our low inflation rate is a function of falling petrol prices and a slightly stronger currency year on year coupled with a highly flexible labour market which is creating jobs. When the latter slows down as we approach 5% unemployment wages will naturally start to rise. Next month YoY wage rises will be around 1.1% which is not that far below the inflation rate, and that's with financial services dragging the headline rate down by 20-40bp. I would have thought you of all people would support slower wage growth in that particular sector.
King Cole, but is it strong against the Vietnamese dong?
I really should get out more. The Dong is strengthening marginally against the pound.
That and the Laotion Kip are currencies where one does need a VERY large wallet to carry them about. I think a 10 minute taxi ride in Laos cost us 40,000 Kip a couple of years ago.
As Yougov has Labour at a 5% lead, the freshly fallen PB Hodges stare back up the polling crossover hill wondering where it all went wrong yet again. Get those marching boots back on Hodges and get back up that hill.
Average wages rates is an indication of the spare capacity in the UK.
We are still struggling to employ all the immigrants of the last 10+years, plus all those who are coming off incapacity benefits where they had been placed incorrectly by the last government.
Thatcher and Hodgkin: How chemistry overcame politics
This fascinating account of MT and her former tutor who won a Nobel Prize for Chemistry, is brought to life tomorrow afternoon: The Chemistry Between Them is the Afternoon Play on BBC Radio 4 at 14:15 BST on Wednesday 20 August.
This comment at the Telegraph article on the 'no currency union' / 'sterlingisation as a temporary stop gap' is about right:
What Salmond is suggesting is pretty close to the situation of 'Zero Hour,' in Germany immediately after the war when they had no currency. The result was that in the occupation zones the effective currency was cigarettes, sex, dollars or slices of bread. Is this what Salmond is envisaging as the bright future for Scotland? What will he be using to barter with?
It's just astounding that Wee Eck thought he could get as far as 1 month to go to a full Sindy referendum and not have even a coherent Plan A let alone a Plan B on the most important issue of all. What an utter clusterfu<k of a policy vacuum. He really, genuinely thought he could bluster through this one. What a tool.
As I've been saying for a while, I don't think interest rates are going to be increased anytime soon. The latest inflation figures provide additional evidence for that view. With the Eurozone flirting with outright deflation, the pound strong, and world commodity prices subdued, steady as she goes would seem to be the appropriate policy.
Note also: RPI 2.5%, and house prices easing off a smidgen.
Whilst I wouldn't disagree with that particularly, there is a valid school of thought that says that if things are good enough to enable you to increase rates without significant effect (even if you don't NEED to) you should do - as it is a way of 'reloading the gun' to provide you with ammunition for the future.
This comment at the Telegraph article on the 'no currency union' / 'sterlingisation as a temporary stop gap' is about right:
What Salmond is suggesting is pretty close to the situation of 'Zero Hour,' in Germany immediately after the war when they had no currency. The result was that in the occupation zones the effective currency was cigarettes, sex, dollars or slices of bread. Is this what Salmond is envisaging as the bright future for Scotland? What will he be using to barter with?
It's just astounding that Wee Eck thought he could get as far as 1 month to go to a full Sindy referendum and not have even a coherent Plan A let alone a Plan B on the most important issue of all. What an utter clusterfu
My father, a pipe-smoker, was posted to Denmark at the end of the war and kept writing home for cigarettes, which my mother could not understand. Turned out that the German PoW’s he was using as labourers wanted cigarettes to send home to their families as currency!
This comment at the Telegraph article on the 'no currency union' / 'sterlingisation as a temporary stop gap' is about right:
What Salmond is suggesting is pretty close to the situation of 'Zero Hour,' in Germany immediately after the war when they had no currency. The result was that in the occupation zones the effective currency was cigarettes, sex, dollars or slices of bread. Is this what Salmond is envisaging as the bright future for Scotland? What will he be using to barter with?
It's just astounding that Wee Eck thought he could get as far as 1 month to go to a full Sindy referendum and not have even a coherent Plan A let alone a Plan B on the most important issue of all. What an utter clusterfu
If Wee Eck has to follow the German 1945 example, then he will be limited to bread, pounds and fags - with perhaps a wee dram or few.
Average wages rates is an indication of the spare capacity in the UK.
We are still struggling to employ all the immigrants of the last 10+years, plus all those who are coming off incapacity benefits where they had been placed incorrectly by the last government.
The last one and the one before, Major/Thatcher started the incapacity benefit con, Blair and Brown just continued it. Whatever one might think of IDS, he has at least had the gumption to tackle incapacity benefit fraud.
Thatcher and Hodgkin: How chemistry overcame politics
This fascinating account of MT and her former tutor who won a Nobel Prize for Chemistry, is brought to life tomorrow afternoon: The Chemistry Between Them is the Afternoon Play on BBC Radio 4 at 14:15 BST on Wednesday 20 August.
It's a peculiar fact that the UK's Margaret Thatcher and Germany's Angela Merkel both studied science at university, yet no male leader of either country has had a science degree.
Neo-liberals pushing for an interest rate rise confounded again.
Deflation alert?
Alarmist much! Surely this is a good thing for people struggling with the cost of living.
It's quite something that Osborne has managed to engineer a cost of living crisis with inflation crashing through the floor.
A clear example of Osborne's glaring incompetence. Still, he'll be out of office soon.
As someone who has little time for Osborne, even I wouldn't call that bit of good news bad.
In the same way super low gilt yields absolutely does not mean everything's great in the economy or fiscal management (despite foolish Tory attempts to paint it otherwise), inflation heading towards 1% isn't great either as the ECBs much-too-late, desperate attempts to stoke inflation proves.
There should be inflation pressure should there not, if the economy was properly recovering?
And a cost-of-living crisis with inflation at 1.6%? How did Osborne get us into this mess? (Blinkered ideology is the answer of course)
How's EdM's socialist pal Hollande doing in France ?
The latest inflation figures don't prove much of themselves but do support the idea I was promoting yesterday of the Autumn Statement or March budget including another lift in the minimum wage. We need to get average wages rising again in real terms and to avoid deflation seeping into this country from the EZ.
The resources that Lord Ashcroft is putting into polling are remarkable but am I alone in wondering if his money is being spent as well as it might be? His weekly poll was ridiculously volatile and, so far, the marginal polling is not showing anything particularly different from UNS on the national polls, any difference being well within the MOE. It would be interesting indeed if that changed of course.
With optimal inflation reckoned to be at 2%, this is pretty much BANG ON.
@BenM You do like to cry wolf alot - there are issues with this Gov't but these inflation figures are certainly no problem whatsoever.
The target is 2pc and despite interest rates at 0.5pc there is a large undershoot.
I didn't say we're in a deflationary spiral. Not yet anyway. Just put an alert out there.
We were hearing similar denials from the eurozone 6 months ago. If the recovery had substance inflation would be higher and yes interest rates would be starting to track higher too.
But there is no guts to this consumer debt, McJob driven recovery.
Every party is marked by lukewarm support. Nobody gets enthusiastic about Cameron or Miliband, except in that the other might be worse, and Clegg's even less popular.
The public are against it and the parties have promised it won't happen. A u-turn would not break trust, it would confirm none of them are worthy of it. I cannot see it happening.
Even without the democratic aspect, the economic arguments against it (why should English, Welsh and Northern Irish taxpayers stand behind Scottish financial institutions?) are significant.
Salmond said he would view CU as just a stopgap in any case, which undermines the whole thing from the start. He'd break any agreement at the drop of a hat, so there is no point in negotiating with him.
Yeah, why bother with all the hassle in setting up a CU in the first place?
Oops, should have read the story better, he said using Sterling without a CU could be a viable stop-gap measure. He didn't elaborate on what would follow, however.
The Poond Scots, worth 5p.
I really don't understand why folks who are so contemptuous of Scotland, as evidenced by comments like this, wish to be in a political union with them never mind a currency union.
Average wages rates is an indication of the spare capacity in the UK.
We are still struggling to employ all the immigrants of the last 10+years, plus all those who are coming off incapacity benefits where they had been placed incorrectly by the last government.
The last one and the one before, Major/Thatcher started the incapacity benefit con, Blair and Brown just continued it. Whatever one might think of IDS, he has at least had the gumption to tackle incapacity benefit fraud.
Be fair, Mr.PB, didn't Labour set the ball rolling on that one.
For all Labour's cries of infamy several government policies were kicked off by Labour and merely continued by the coalition. One thinks for example of education reforms and introducing private providers into the NHS as well as starting to tackle welfare.
With optimal inflation reckoned to be at 2%, this is pretty much BANG ON.
@BenM You do like to cry wolf alot - there are issues with this Gov't but these inflation figures are certainly no problem whatsoever.
The target is 2pc and despite interest rates at 0.5pc there is a large undershoot.
I didn't say we're in a deflationary spiral. Not yet anyway. Just put an alert out there.
We were hearing similar denials from the eurozone 6 months ago. If the recovery had substance inflation would be higher and yes interest rates would be starting to track higher too.
But there is no guts to this consumer debt, McJob driven recovery.
We are seeing signs of the beginning of a deflationary spiral a la Japan.
The latest inflation figures don't prove much of themselves but do support the idea I was promoting yesterday of the Autumn Statement or March budget including another lift in the minimum wage. We need to get average wages rising again in real terms and to avoid deflation seeping into this country from the EZ.
Did not Osborne in his evidence to the Low Pay Commission state that he would like to see the minimum wage rise to around £7 per hour? It is of course the Commission that sets the rate and I think it would set a bad precedent for any government of whatever colour to over rule it.
The latest inflation figures don't prove much of themselves but do support the idea I was promoting yesterday of the Autumn Statement or March budget including another lift in the minimum wage. We need to get average wages rising again in real terms and to avoid deflation seeping into this country from the EZ.
The resources that Lord Ashcroft is putting into polling are remarkable but am I alone in wondering if his money is being spent as well as it might be? His weekly poll was ridiculously volatile and, so far, the marginal polling is not showing anything particularly different from UNS on the national polls, any difference being well within the MOE. It would be interesting indeed if that changed of course.
Why should marginal seats show a different swing ? I know it could but there is no reason that it MUST.
Every party is marked by lukewarm support. Nobody gets enthusiastic about Cameron or Miliband, except in that the other might be worse, and Clegg's even less popular.
The public are against it and the parties have promised it won't happen. A u-turn would not break trust, it would confirm none of them are worthy of it. I cannot see it happening.
Even without the democratic aspect, the economic arguments against it (why should English, Welsh and Northern Irish taxpayers stand behind Scottish financial institutions?) are significant.
Salmond said he would view CU as just a stopgap in any case, which undermines the whole thing from the start. He'd break any agreement at the drop of a hat, so there is no point in negotiating with him.
Yeah, why bother with all the hassle in setting up a CU in the first place?
Oops, should have read the story better, he said using Sterling without a CU could be a viable stop-gap measure. He didn't elaborate on what would follow, however.
The Poond Scots, worth 5p.
I really don't understand why folks who are so contemptuous of Scotland, as evidenced by comments like this, wish to be in a political union with them never mind a currency union.
As I've been saying for a while, I don't think interest rates are going to be increased anytime soon. The latest inflation figures provide additional evidence for that view. With the Eurozone flirting with outright deflation, the pound strong, and world commodity prices subdued, steady as she goes would seem to be the appropriate policy.
Note also: RPI 2.5%, and house prices easing off a smidgen.
Whilst I wouldn't disagree with that particularly, there is a valid school of thought that says that if things are good enough to enable you to increase rates without significant effect (even if you don't NEED to) you should do - as it is a way of 'reloading the gun' to provide you with ammunition for the future.
Things aren't good enough though, the state hasn't finished deleveraging so any rate rise will hit the economy very hard and government finances very hard. Until the deficit falls to below 2% of GDP interest rates will be anaemic. The government can't afford for gilt yields to rise above 3.5% for a sustained period as it will cause the interest bill to rise too rapidly and larger cuts will have to be made elsewhere to balance the budget. With the base rate at 0.5%, gilts that yield above 2% are a sound AAA/AA+ investment, with a 1.5% base rate they wouldn't be and gilt yields would naturally rise to around 4% as investors start looking elsewhere for returns.
Low interest rates also incentivise businesses to invest, a higher base rate would allow companies to sit on cash, at the moment cash in the bank gives practically no return.
In an economy such as ours low interest rates are absolutely key and until the state sector stops deleveraging we can't afford for them to rise. So the fall in inflation to 1.6% is good news. In fact a further fall could even be welcome as it may lead to further monetary stimulus to weaken the pound, though I think inflation at around 1.5% is optimal as it alleviates pretty much all the pressure to raise rates. Once the state has deleveraged then inflation will rise naturally and interest rates will follow. I don't think we will see rates above 2% for a very long time though, maybe after the next cycle, but not this time. Chinese wages are deflating again, so I expect that will play a key role in over the next few years as the cost of finished manufactured goods begins to fall again.
Every party is marked by lukewarm support. Nobody gets enthusiastic about Cameron or Miliband, except in that the other might be worse, and Clegg's even less popular.
The public are against it and the parties have promised it won't happen. A u-turn would not break trust, it would confirm none of them are worthy of it. I cannot see it happening.
Even without the democratic aspect, the economic arguments against it (why should English, Welsh and Northern Irish taxpayers stand behind Scottish financial institutions?) are significant.
Salmond said he would view CU as just a stopgap in any case, which undermines the whole thing from the start. He'd break any agreement at the drop of a hat, so there is no point in negotiating with him.
Yeah, why bother with all the hassle in setting up a CU in the first place?
Oops, should have read the story better, he said using Sterling without a CU could be a viable stop-gap measure. He didn't elaborate on what would follow, however.
The Poond Scots, worth 5p.
I really don't understand why folks who are so contemptuous of Scotland, as evidenced by comments like this, wish to be in a political union with them never mind a currency union.
Pique at their own political dependencies (e.g. 40-50 Scots Labour MPs) being shaken I'd guess.
With optimal inflation reckoned to be at 2%, this is pretty much BANG ON.
@BenM You do like to cry wolf alot - there are issues with this Gov't but these inflation figures are certainly no problem whatsoever.
The target is 2pc and despite interest rates at 0.5pc there is a large undershoot.
I didn't say we're in a deflationary spiral. Not yet anyway. Just put an alert out there.
We were hearing similar denials from the eurozone 6 months ago. If the recovery had substance inflation would be higher and yes interest rates would be starting to track higher too.
But there is no guts to this consumer debt, McJob driven recovery.
0.4% is a "Large" undershoot ?
Margin of error stuff, and I for one am glad that food and fuel seem to be going nowhere fast. Filling the car up for sub £1.30 (Diesel) feels good.
t is of course the Commission that sets the rate and I think it would set a bad precedent for any government of whatever colour to over rule it.
It isnt the Commission that sets the rate. This Government has already overruled the Commission.
Is it not? I thought it was I must go and read it up. My apologies, Mr. Neil.
The Commission considers the evidence and recommends a rate. The SoS lays the order so you could say it is Government or Parliament that actually sets the rate. This Government has already deviated from the Commission's recommendation at least once.
Edit: actually rates - it wasnt the main rate that the Government didnt follow the recommendation on
The latest inflation figures don't prove much of themselves but do support the idea I was promoting yesterday of the Autumn Statement or March budget including another lift in the minimum wage. We need to get average wages rising again in real terms and to avoid deflation seeping into this country from the EZ.
The resources that Lord Ashcroft is putting into polling are remarkable but am I alone in wondering if his money is being spent as well as it might be? His weekly poll was ridiculously volatile and, so far, the marginal polling is not showing anything particularly different from UNS on the national polls, any difference being well within the MOE. It would be interesting indeed if that changed of course.
Why should marginal seats show a different swing ? I know it could but there is no reason that it MUST.
I agree that it is by no means a given but if the marginals do not show different results marginal polling is a bit of a waste of time and money. That is all I was saying.
As I've been saying for a while, I don't think interest rates are going to be increased anytime soon. The latest inflation figures provide additional evidence for that view. With the Eurozone flirting with outright deflation, the pound strong, and world commodity prices subdued, steady as she goes would seem to be the appropriate policy.
Note also: RPI 2.5%, and house prices easing off a smidgen.
Whilst I wouldn't disagree with that particularly, there is a valid school of thought that says that if things are good enough to enable you to increase rates without significant effect (even if you don't NEED to) you should do - as it is a way of 'reloading the gun' to provide you with ammunition for the future.
Things aren't good enough though, the state hasn't finished deleveraging so any rate rise will hit the economy very hard and government finances very hard. Until the deficit falls to below 2% of GDP interest rates will be anaemic. The government can't afford for gilt yields to rise above 3.5% for a sustained period as it will cause the interest bill to rise too rapidly and larger cuts will have to be made elsewhere to balance the budget. With the base rate at 0.5%, gilts that yield above 2% are a sound AAA/AA+ investment, with a 1.5% base rate they wouldn't be and gilt yields would naturally rise to around 4% as investors start looking elsewhere for returns.
Low interest rates also incentivise businesses to invest, a higher base rate would allow companies to sit on cash, at the moment cash in the bank gives practically no return.
In an economy such as ours low interest rates are absolutely key and until the state sector stops deleveraging we can't afford for them to rise. So the fall in inflation to 1.6% is good news. In fact a further fall could even be welcome as it may lead to further monetary stimulus to weaken the pound, though I think inflation at around 1.5% is optimal as it alleviates pretty much all the pressure to raise rates. Once the state has deleveraged then inflation will rise naturally and interest rates will follow. I don't think we will see rates above 2% for a very long time though, maybe after the next cycle, but not this time. Chinese wages are deflating again, so I expect that will play a key role in over the next few years as the cost of finished manufactured goods begins to fall again.
Since when has this government started "deleveraging"?!!
These marginals have in aggregate a far larger sample size than a regular Ashcroft, so actually if the same weightings that are applied to his normal raw data (Sample size ~ 1000) are applied to these figures, then it should be possible to gauge a more accurate national picture than from his regular weekly polls.
With optimal inflation reckoned to be at 2%, this is pretty much BANG ON.
@BenM You do like to cry wolf alot - there are issues with this Gov't but these inflation figures are certainly no problem whatsoever.
The target is 2pc and despite interest rates at 0.5pc there is a large undershoot.
I didn't say we're in a deflationary spiral. Not yet anyway. Just put an alert out there.
We were hearing similar denials from the eurozone 6 months ago. If the recovery had substance inflation would be higher and yes interest rates would be starting to track higher too.
But there is no guts to this consumer debt, McJob driven recovery.
I wonder what you would be saying if infaltion had gone up tp 3%, infaltion spirally out of control, failed chancellor etc. If he cured cancer you would still criticise him.
This comment at the Telegraph article on the 'no currency union' / 'sterlingisation as a temporary stop gap' is about right:
What Salmond is suggesting is pretty close to the situation of 'Zero Hour,' in Germany immediately after the war when they had no currency. The result was that in the occupation zones the effective currency was cigarettes, sex, dollars or slices of bread. Is this what Salmond is envisaging as the bright future for Scotland? What will he be using to barter with?
It's just astounding that Wee Eck thought he could get as far as 1 month to go to a full Sindy referendum and not have even a coherent Plan A let alone a Plan B on the most important issue of all. What an utter clusterfu
The biggest mistake Salmond did was not stuck with the Euro. Agreed, he would have faced scorn to begin with, but he could have easily countered that 460m are using it, no country which went into the recession chose to come out of it and indeed countries like Ukraine can't wait to get in the queue.
It is still the second largest currency in the world. Interestingly, against the USD, on Aug 16, 2013, EUR = $1.334. On Friday, EUR = $ 1.3388. The world of Euro has not collapsed whatever the doomsdayers have to say.
If an independent Scotland were to join the EU, it would have to take on the Euro anyway.
As I said that whilst he would have faced some scorn, he would not be in the vacuum that he is in when faced with the rejection of Plan A by the rUK.
The latest inflation figures don't prove much of themselves but do support the idea I was promoting yesterday of the Autumn Statement or March budget including another lift in the minimum wage. We need to get average wages rising again in real terms and to avoid deflation seeping into this country from the EZ.
Did not Osborne in his evidence to the Low Pay Commission state that he would like to see the minimum wage rise to around £7 per hour? It is of course the Commission that sets the rate and I think it would set a bad precedent for any government of whatever colour to over rule it.
I don't like important economic decisions being delegated to the great and the good such as The Low Pay Commission. They can by all means have an important role in ingathering the evidence, objectively analysing it and even making recommendations but I have no problem at all with politicians saying thanks, but in my opinion we should do X. Of course politicians should then be held to account if X turns out to be disastrous.
For me, there is a legitimate complaint that those already in work are not benefitting from the recovery sufficiently. The increase in personal allowances helps as does the holding down of fuel duties etc but the complaint that the lower paid have disproportionately suffered seems right with benefit cuts aggravating the situation. Recognising that by increasing the Minimum Wage seems good economics, good policy (since it transfers more of the marginal cost of employment onto the employers and away from government) and good politics. I very much hope that George goes for it.
Average wages rates is an indication of the spare capacity in the UK.
We are still struggling to employ all the immigrants of the last 10+years, plus all those who are coming off incapacity benefits where they had been placed incorrectly by the last government.
The last one and the one before, Major/Thatcher started the incapacity benefit con, Blair and Brown just continued it. Whatever one might think of IDS, he has at least had the gumption to tackle incapacity benefit fraud.
Be fair, Mr.PB, didn't Labour set the ball rolling on that one.
For all Labour's cries of infamy several government policies were kicked off by Labour and merely continued by the coalition. One thinks for example of education reforms and introducing private providers into the NHS as well as starting to tackle welfare.
As pointed out the other day, Google Blair's Rights and Responsibilities speech from the late 90's and you'll see the origins of a number of policies bearing fruit today. Remember it was Labour who kicked off the Remploy "modernisation"*
* Labour management speak for factory closures and disabled people paid to sit at home instead.
Every party is marked by lukewarm support. Nobody gets enthusiastic about Cameron or Miliband, except in that the other might be worse, and Clegg's even less popular.
The public are against it and the parties have promised it won't happen. A u-turn would not break trust, it would confirm none of them are worthy of it. I cannot see it happening.
Even without the democratic aspect, the economic arguments against it (why should English, Welsh and Northern Irish taxpayers stand behind Scottish financial institutions?) are significant.
Salmond said he would view CU as just a stopgap in any case, which undermines the whole thing from the start. He'd break any agreement at the drop of a hat, so there is no point in negotiating with him.
Yeah, why bother with all the hassle in setting up a CU in the first place?
Oops, should have read the story better, he said using Sterling without a CU could be a viable stop-gap measure. He didn't elaborate on what would follow, however.
The Poond Scots, worth 5p.
I really don't understand why folks who are so contemptuous of Scotland, as evidenced by comments like this, wish to be in a political union with them never mind a currency union.
The contempt aimed at and opprobrium poured on the SNP's cockamaney plan is well deserved.
There is no reason why Scotland can't be a successful, prosperous independent nation.
Provided it sets out on a decent prospectus - Project Fib has morphed into Project Farce and in desperation is lashing out with Project Fear.... The Tories will wreck something we already control and claimed we would protect in our 2011 manifesto....
With optimal inflation reckoned to be at 2%, this is pretty much BANG ON.
@BenM You do like to cry wolf alot - there are issues with this Gov't but these inflation figures are certainly no problem whatsoever.
The target is 2pc and despite interest rates at 0.5pc there is a large undershoot.
I didn't say we're in a deflationary spiral. Not yet anyway. Just put an alert out there.
We were hearing similar denials from the eurozone 6 months ago. If the recovery had substance inflation would be higher and yes interest rates would be starting to track higher too.
But there is no guts to this consumer debt, McJob driven recovery.
We are seeing signs of the beginning of a deflationary spiral a la Japan.
Of all the daft comments on here today criticizing the inflation figure this is the funniest.
One important point, no commentators have raised. At least, I have not read anything about it. The point is Scottish bond yields post independence. Even in a currency union with the rUK, interest rates in Scotalnd will begin to diverge from the rUK. Euro countries have different bond yields as we know. Actually, I do not know which way it will go. Probably higher due to uncertainty.
With optimal inflation reckoned to be at 2%, this is pretty much BANG ON.
@BenM You do like to cry wolf alot - there are issues with this Gov't but these inflation figures are certainly no problem whatsoever.
The target is 2pc and despite interest rates at 0.5pc there is a large undershoot.
I didn't say we're in a deflationary spiral. Not yet anyway. Just put an alert out there.
We were hearing similar denials from the eurozone 6 months ago. If the recovery had substance inflation would be higher and yes interest rates would be starting to track higher too.
But there is no guts to this consumer debt, McJob driven recovery.
We are seeing signs of the beginning of a deflationary spiral a la Japan.
Of all the daft comments on here today criticizing the inflation figure this is the funniest.
Just wait and see. Service sector alone does not make the economy. I sell in the real world. Since July, demand has fallen off the cliff.
In any event, falling inflation of the kind we are seeing could indeed be a start of deflation.
Every party is marked by lukewarm support. Nobody gets enthusiastic about Cameron or Miliband, except in that the other might be worse, and Clegg's even less popular.
The public are against it and the parties have promised it won't happen. A u-turn would not break trust, it would confirm none of them are worthy of it. I cannot see it happening.
Even without the democratic aspect, the economic arguments against it (why should English, Welsh and Northern Irish taxpayers stand behind Scottish financial institutions?) are significant.
Salmond said he would view CU as just a stopgap in any case, which undermines the whole thing from the start. He'd break any agreement at the drop of a hat, so there is no point in negotiating with him.
Yeah, why bother with all the hassle in setting up a CU in the first place?
Oops, should have read the story better, he said using Sterling without a CU could be a viable stop-gap measure. He didn't elaborate on what would follow, however.
The Poond Scots, worth 5p.
I really don't understand why folks who are so contemptuous of Scotland, as evidenced by comments like this, wish to be in a political union with them never mind a currency union.
The contempt aimed at and opprobrium poured on the SNP's cockamaney plan is well deserved.
There is no reason why Scotland can't be a successful, prosperous independent nation.
Provided it sets out on a decent prospectus - Project Fib has morphed into Project Farce and in desperation is lashing out with Project Fear.... The Tories will wreck something we already control and claimed we would protect in our 2011 manifesto....
Well, I'm not convinced a decent prospectus would have found favour all around but I take your point... Why the NHS gambit I have no idea, Yes is failing due to an inability to explain a credible process to independence, even if there were to be righteous fury, about future NHS budgets, across the Scottish nation, the lack of a credible process to an independent state remains the problem with currency at the top of the list.
Rail fares: If the government subsidy in Europe is roughly the same as in the UK, why are our rail fares so high ? Are our rail companies inefficient or is it a licence to print money ?
I wonder what you would be saying if infaltion had gone up tp 3%, infaltion spirally out of control, failed chancellor etc. If he cured cancer you would still criticise him.
Yes, and of course if inflation had gone up Ben would be pointing to the RPI figures to make it sound even worse.
He seems to have gone quiet on his house price Armageddon posts, though.
The big picture is actually a remarkably good combination, despite the headwinds from the Eurozone:
- House prices stable after rising 10.2% over the last year, from a low base. That is just right for maintaining the very strong growth in housebuilding activity without risk of a bubble
- CPI 1.6%, RPI 2.5%: The CPI figure is a shade low, however that's better than inflation rearing its ugly head at this delicate stage in the recovery
- Growth strong at 3.2% - remarkable in the circumstances
- Unemployment falling more rapidly than expected, now just 6.4%, with most of the growth in employment coming from full-time jobs
- Rebalancing of employment from the public sector to the private sector going very well indeed
- Business investment rising fast (5% in first quarter of 2014)
It's really hard to see how things could be better placed. That's why Labour are reduced to the sterile argument about wages not yet rising much - a politically misguided line, like all of their previous ones on the economy this parliament, because it will be overtaken by events by May 2015.
Of course there's a lot further to go and the fall in the deficit is slower than we would like (although I think that with the current strong growth the OBR will soon revise its deficit forecasts in a favourable direction). We just have to hope that the Eurozone, and the risk of a Miliband government, don't blow us off-course again.
As I've been saying for a while, I don't think interest rates are going to be increased anytime soon. The latest inflation figures provide additional evidence for that view. With the Eurozone flirting with outright deflation, the pound strong, and world commodity prices subdued, steady as she goes would seem to be the appropriate policy.
Note also: RPI 2.5%, and house prices easing off a smidgen.
Whilst I wouldn't disagree with that particularly, there is a valid school of thought that says that if things are good enough to enable you to increase rates without significant effect (even if you don't NEED to) you should do - as it is a way of 'reloading the gun' to provide you with ammunition for the future.
Things aren't good enough though, the state hasn't finished deleveraging so any rate rise will hit the economy very hard and government finances very hard. Until the deficit falls to below 2% of GDP interest rates will be anaemic. The government can't afford for gilt yields to rise above 3.5% for a sustained period as it will cause the interest bill to rise too rapidly and larger cuts will have to be made elsewhere to balance the budget. With the base rate at 0.5%, gilts that yield above 2% are a sound AAA/AA+ investment, with a 1.5% base rate they wouldn't be and gilt yields would naturally rise to around 4% as investors start looking elsewhere for returns.
Low interest rates also incentivise businesses to invest, a higher base rate would allow companies to sit on cash, at the moment cash in the bank gives practically no return.
In an economy such as ours low interest rates are absolutely key and until the state sector stops deleveraging we can't afford for them to rise. So the fall in inflation to 1.6% is good news. In fact a further fall could even be welcome as it may lead to further monetary stimulus to weaken the pound, though I think inflation at around 1.5% is optimal as it alleviates pretty much all the pressure to raise rates. Once the state has deleveraged then inflation will rise naturally and interest rates will follow. I don't think we will see rates above 2% for a very long time though, maybe after the next cycle, but not this time. Chinese wages are deflating again, so I expect that will play a key role in over the next few years as the cost of finished manufactured goods begins to fall again.
Since when has this government started "deleveraging"?!!
The deficit has fallen from £159bn to £100bn, while it does not fit the classic definition of reducing leverage, on a governmental basis reducing the deficit would count as deleverage as they are reducing the fiscal stimulus every year by around £20bn (apparently more this year, but I don't see it).
As I've been saying for a while, I don't think interest rates are going to be increased anytime soon. The latest inflation figures provide additional evidence for that view. With the Eurozone flirting with outright deflation, the pound strong, and world commodity prices subdued, steady as she goes would seem to be the appropriate policy.
Note also: RPI 2.5%, and house prices easing off a smidgen.
Those who previously felt congenitally predisposed to attack Osborne said growth was all down to a housing bubble and the economy would explode. They have gone quiet. House prices are down, not least in the capital. Morgtgage lending is down. This is in no small measure due to new rules and stress tests by the Financial Conduct Authority. Osborne set up the FSA. He supported (probably instigated) the rules. http://www.politicshome.com/uk/story/41764/sign_up_pro.html Osborne is showing he is a good chancellor. If the critics heads are not exploding then their fantasy world is certainly imploding.
One important point, no commentators have raised. At least, I have not read anything about it. The point is Scottish bond yields post independence. Even in a currency union with the rUK, interest rates in Scotalnd will begin to diverge from the rUK. Euro countries have different bond yields as we know. Actually, I do not know which way it will go. Probably higher due to uncertainty.
It would be inevitable that Scottish bond rates would be considerably higher than those of rUK. The risk of default for a country which cannot print its own currency is inevitably higher. We have a political party in government who think that the solution to Scotland's problems is spending yet more public money and who have made a range of promises about how they would do that. The risks to the tax base, specifically the financial services and export industries are considerable. The importance of oil to the economy will increase volatility.
In time of course Scotland could establish a credit record, elect sane governments, rebalance their economy away from the public sector, either establish their own currency or join the euro and learn to live within its means. A counterbalance to the volatility of oil is that our economy would no longer be on the yoyo of London/SE England property prices which increases the volatility of the pound and, at least historically, has required the UK to have higher interest rates and a tendency to higher inflation.
Every party is marked by lukewarm support. Nobody gets enthusiastic about Cameron or Miliband, except in that the other might be worse, and Clegg's even less popular.
The public are against it and the parties have promised it won't happen. A u-turn would not break trust, it would confirm none of them are worthy of it. I cannot see it happening.
Even without the democratic aspect, the economic arguments against it (why should English, Welsh and Northern Irish taxpayers stand behind Scottish financial institutions?) are significant.
Salmond said he would view CU as just a stopgap in any case, which undermines the whole thing from the start. He'd break any agreement at the drop of a hat, so there is no point in negotiating with him.
Yeah, why bother with all the hassle in setting up a CU in the first place?
Oops, should have read the story better, he said using Sterling without a CU could be a viable stop-gap measure. He didn't elaborate on what would follow, however.
The Poond Scots, worth 5p.
I really don't understand why folks who are so contemptuous of Scotland, as evidenced by comments like this, wish to be in a political union with them never mind a currency union.
The contempt aimed at and opprobrium poured on the SNP's cockamaney plan is well deserved.
There is no reason why Scotland can't be a successful, prosperous independent nation.
Provided it sets out on a decent prospectus - Project Fib has morphed into Project Farce and in desperation is lashing out with Project Fear.... The Tories will wreck something we already control and claimed we would protect in our 2011 manifesto....
"24 hrs to save the Scottish NHS"
er, which is a devolved power Salmond has complete control over. - extraordinary cutzpah.
Every party is marked by lukewarm support. Nobody gets enthusiastic about Cameron or Miliband, except in that the other might be worse, and Clegg's even less popular.
The public are against it and the parties have promised it won't happen. A u-turn would not break trust, it would confirm none of them are worthy of it. I cannot see it happening.
Even without the democratic aspect, the economic arguments against it (why should English, Welsh and Northern Irish taxpayers stand behind Scottish financial institutions?) are significant.
Salmond said he would view CU as just a stopgap in any case, which undermines the whole thing from the start. He'd break any agreement at the drop of a hat, so there is no point in negotiating with him.
Yeah, why bother with all the hassle in setting up a CU in the first place?
Oops, should have read the story better, he said using Sterling without a CU could be a viable stop-gap measure. He didn't elaborate on what would follow, however.
The Poond Scots, worth 5p.
I really don't understand why folks who are so contemptuous of Scotland, as evidenced by comments like this, wish to be in a political union with them never mind a currency union.
The contempt aimed at and opprobrium poured on the SNP's cockamaney plan is well deserved.
There is no reason why Scotland can't be a successful, prosperous independent nation.
Provided it sets out on a decent prospectus - Project Fib has morphed into Project Farce and in desperation is lashing out with Project Fear.... The Tories will wreck something we already control and claimed we would protect in our 2011 manifesto....
Well, I'm not convinced a decent prospectus would have found favour all around but I take your point... Why the NHS gambit I have no idea, Yes is failing due to an inability to explain a credible process to independence, even if there were to be righteous fury, about future NHS budgets, across the Scottish nation, the lack of a credible process to an independent state remains the problem with currency at the top of the list.
Isn't the NHS an activity devolved to the Scottish parliament? If so then would independence make any difference?
Plus if 'privatisation' is the issue will an independent Scotland look to nationalise all the private GP surgeries?
The latest inflation figures don't prove much of themselves but do support the idea I was promoting yesterday of the Autumn Statement or March budget including another lift in the minimum wage. We need to get average wages rising again in real terms and to avoid deflation seeping into this country from the EZ.
The resources that Lord Ashcroft is putting into polling are remarkable but am I alone in wondering if his money is being spent as well as it might be? His weekly poll was ridiculously volatile and, so far, the marginal polling is not showing anything particularly different from UNS on the national polls, any difference being well within the MOE. It would be interesting indeed if that changed of course.
Why should marginal seats show a different swing ? I know it could but there is no reason that it MUST.
I agree that it is by no means a given but if the marginals do not show different results marginal polling is a bit of a waste of time and money. That is all I was saying.
But you would only know it is the same swing if you have undertaken the polls, not before.
One important point, no commentators have raised. At least, I have not read anything about it. The point is Scottish bond yields post independence. Even in a currency union with the rUK, interest rates in Scotalnd will begin to diverge from the rUK. Euro countries have different bond yields as we know. Actually, I do not know which way it will go. Probably higher due to uncertainty.
It would be inevitable that Scottish bond rates would be considerably higher than those of rUK. The risk of default for a country which cannot print its own currency is inevitably higher.
And yet Irish yields have been lower than UK yields in recent times.
With optimal inflation reckoned to be at 2%, this is pretty much BANG ON.
@BenM You do like to cry wolf alot - there are issues with this Gov't but these inflation figures are certainly no problem whatsoever.
The target is 2pc and despite interest rates at 0.5pc there is a large undershoot.
I didn't say we're in a deflationary spiral. Not yet anyway. Just put an alert out there.
We were hearing similar denials from the eurozone 6 months ago. If the recovery had substance inflation would be higher and yes interest rates would be starting to track higher too.
But there is no guts to this consumer debt, McJob driven recovery.
We are seeing signs of the beginning of a deflationary spiral a la Japan.
If house prices were to collapse that is possible, but at the moment I would say not likely.
There was quite a bit of comment in the Economics columns a few years ago of the Bank of England effectively abandoning the inflation target of 2%, and going for a target of 5% growth in nominal GDP. With annual real growth in GDP of 3.2% and CPI at 1.6% the implied growth in nominal GDP would be [roughly] 4.8%, pretty much on this target.
This is in very marked contrast to the Eurozone where nominal GDP growth is [roughly] 1.1% {CPI 0.4%, GDP growth 0.7%} and heading down.
Of course, the failure to see real increases in wages is disappointing, but for the moment it seems to be the inevitable counterpart to surprisingly rapid reductions in unemployment, and I don't think I would argue that I'd rather see higher unemployment and higher wage growth for the smaller number of people employed.
Rail fares: If the government subsidy in Europe is roughly the same as in the UK, why are our rail fares so high ? Are our rail companies inefficient or is it a licence to print money ?
Sadly a mix of both. It's not an easy problem to fix either, like water the railways allow for a regional monopoly, there is no competition and therefore no incentive to reduce prices. The franchise model is a busted flush and renationalisation will just increase the public subsidy to the railways. Whichever party gets in next time will have to have a look, but there are no easy answers.
One important point, no commentators have raised. At least, I have not read anything about it. The point is Scottish bond yields post independence. Even in a currency union with the rUK, interest rates in Scotalnd will begin to diverge from the rUK. Euro countries have different bond yields as we know. Actually, I do not know which way it will go. Probably higher due to uncertainty.
It would be inevitable that Scottish bond rates would be considerably higher than those of rUK. The risk of default for a country which cannot print its own currency is inevitably higher.
And yet Irish yields have been lower than UK yields in recent times.
The Irish government budget was not dependent on volatile returns from a dying oil and gas sector. If one of the major oil fields were to experience some down time it could cause a major shock to the Scottish government budget, while for the UK it would not. That would have to be priced in.
As I've been saying for a while, I don't think interest rates are going to be increased anytime soon. The latest inflation figures provide additional evidence for that view. With the Eurozone flirting with outright deflation, the pound strong, and world commodity prices subdued, steady as she goes would seem to be the appropriate policy.
Note also: RPI 2.5%, and house prices easing off a smidgen.
Whilst I wouldn't disagree with that particularly, there is a valid school of thought that says that if things are good enough to enable you to increase rates without significant effect (even if you don't NEED to) you should do - as it is a way of 'reloading the gun' to provide you with ammunition for the future.
....
Since when has this government started "deleveraging"?!!
The deficit has fallen from £159bn to £100bn, while it does not fit the classic definition of reducing leverage, on a governmental basis reducing the deficit would count as deleverage as they are reducing the fiscal stimulus every year by around £20bn (apparently more this year, but I don't see it).
The govt are acting decicively to cut the structural deficit. It has not done this, it is not doing this, too early in order to not pull the rug from under the economy. It has succeeeded. Looking back at its published plans it was always set to back load them not front load. The OBR is forecasting a declining deficit in the future, with borrowing falling to £95.5bn in 2014-15 before achieving a surplus of £4.8bn in 2018-19. The surplus will be caused by structural cuts and cyclical revenues.
Rail fares: If the government subsidy in Europe is roughly the same as in the UK, why are our rail fares so high ? Are our rail companies inefficient or is it a licence to print money ?
Sadly a mix of both. It's not an easy problem to fix either, like water the railways allow for a regional monopoly, there is no competition and therefore no competition to reduce prices. The franchise model is a busted flush and renationalisation will just increase the public subsidy to the railways. Whichever party gets in next time will have to have a look, but there are no easy answers.
The DofT commissioned a report on this very question; have a look at the McNulty report it makes interesting reading.
As I've been saying for a while, I don't think interest rates are going to be increased anytime soon. The latest inflation figures provide additional evidence for that view. With the Eurozone flirting with outright deflation, the pound strong, and world commodity prices subdued, steady as she goes would seem to be the appropriate policy.
Note also: RPI 2.5%, and house prices easing off a smidgen.
Whilst I wouldn't disagree with that particularly, there is a valid school of thought that says that if things are good enough to enable you to increase rates without significant effect (even if you don't NEED to) you should do - as it is a way of 'reloading the gun' to provide you with ammunition for the future.
....
Since when has this government started "deleveraging"?!!
The deficit has fallen from £159bn to £100bn, while it does not fit the classic definition of reducing leverage, on a governmental basis reducing the deficit would count as deleverage as they are reducing the fiscal stimulus every year by around £20bn (apparently more this year, but I don't see it).
The govt are acting decicively to cut the structural deficit. It has not done this, it is not doing this, too early in order to not pull the rug from under the economy. It has succeeeded. Looking back at its published plans it was always set to back load them not front load. The OBR is forecasting a declining deficit in the future, with borrowing falling to £95.5bn in 2014-15 before achieving a surplus of £4.8bn in 2018-19. The surplus will be caused by structural cuts and cyclical revenues.
Total crap, bring back Avery, at least his spinning was funny.
One important point, no commentators have raised. At least, I have not read anything about it. The point is Scottish bond yields post independence. Even in a currency union with the rUK, interest rates in Scotalnd will begin to diverge from the rUK. Euro countries have different bond yields as we know. Actually, I do not know which way it will go. Probably higher due to uncertainty.
It would be inevitable that Scottish bond rates would be considerably higher than those of rUK. The risk of default for a country which cannot print its own currency is inevitably higher.
And yet Irish yields have been lower than UK yields in recent times.
But Ireland has the ECB which can intervene and remove the currency risk (and even arguably the default risk) and it has gone through the steps I have described to establish its credit rating. It is not starting from scratch.
Also, I agree with those that point out that very low bond rates are not necessarily something to be proud of. They suggest an economy where opportunities for investment are poor, where there is a good deal of caution and people fear the worst. This has been driving rates in many of the EZ countries including Ireland although it is doing a lot better than most, partly because unlike us its major export market (us) is quite buoyant.
As I've been saying for a while, I don't think interest rates are going to be increased anytime soon. The latest inflation figures provide additional evidence for that view. With the Eurozone flirting with outright deflation, the pound strong, and world commodity prices subdued, steady as she goes would seem to be the appropriate policy.
Note also: RPI 2.5%, and house prices easing off a smidgen.
Whilst I wouldn't disagree with that particularly, there is a valid school of thought that says that if things are good enough to enable you to increase rates without significant effect (even if you don't NEED to) you should do - as it is a way of 'reloading the gun' to provide you with ammunition for the future.
....
Since when has this government started "deleveraging"?!!
The deficit has fallen from £159bn to £100bn, while it does not fit the classic definition of reducing leverage, on a governmental basis reducing the deficit would count as deleverage as they are reducing the fiscal stimulus every year by around £20bn (apparently more this year, but I don't see it).
The govt are acting decicively to cut the structural deficit. It has not done this, it is not doing this, too early in order to not pull the rug from under the economy. It has succeeeded. Looking back at its published plans it was always set to back load them not front load. The OBR is forecasting a declining deficit in the future, with borrowing falling to £95.5bn in 2014-15 before achieving a surplus of £4.8bn in 2018-19. The surplus will be caused by structural cuts and cyclical revenues.
I think waiting for Thursday would be a good idea before declaring this year's deficit figure. The government need a big July surplus to wipe away the awful first quarter. I'm not ruling out that the deficit will fall to below £100bn, it just doesn't seem all that likely given that spending is up YoY and tax yield is only up marginally. Last year was bad for corporation tax receipts so there should be a marked improvement, if there isn't then one does wonder how the economy can grow so quickly without higher a tax yield.
One important point, no commentators have raised. At least, I have not read anything about it. The point is Scottish bond yields post independence. Even in a currency union with the rUK, interest rates in Scotalnd will begin to diverge from the rUK. Euro countries have different bond yields as we know. Actually, I do not know which way it will go. Probably higher due to uncertainty.
It would be inevitable that Scottish bond rates would be considerably higher than those of rUK. The risk of default for a country which cannot print its own currency is inevitably higher.
And yet Irish yields have been lower than UK yields in recent times.
But Ireland has the ECB which can intervene and remove the currency risk (and even arguably the default risk) and it has gone through the steps I have described to establish its credit rating. It is not starting from scratch.
Also, I agree with those that point out that very low bond rates are not necessarily something to be proud of. They suggest an economy where opportunities for investment are poor, where there is a good deal of caution and people fear the worst. This has been driving rates in many of the EZ countries including Ireland although it is doing a lot better than most, partly because unlike us its major export market (us) is quite buoyant.
Oh and the ECB has shagged the Irish several times over as they struggled to cope with their debt mountain.
Every party is marked by lukewarm support. Nobody gets enthusiastic about Cameron or Miliband, except in that the other might be worse, and Clegg's even less popular.
The public are against it and the parties have promised it won't happen. A u-turn would not break trust, it would confirm none of them are worthy of it. I cannot see it happening.
Even without the democratic aspect, the economic arguments against it (why should English, Welsh and Northern Irish taxpayers stand behind Scottish financial institutions?) are significant.
Salmond said he would view CU as just a stopgap in any case, which undermines the whole thing from the start. He'd break any agreement at the drop of a hat, so there is no point in negotiating with him.
Yeah, why bother with all the hassle in setting up a CU in the first place?
Oops, should have read the story better, he said using Sterling without a CU could be a viable stop-gap measure. He didn't elaborate on what would follow, however.
The Poond Scots, worth 5p.
I really don't understand why folks who are so contemptuous of Scotland, as evidenced by comments like this, wish to be in a political union with them never mind a currency union.
I think you'd find they mostly don't.
I see the Scotch referendum as akin to asking the relevant region of Germany today if they want to flounce out of the BRD and reconstitute the DDR, along its previous ideological lines. There would be some misty, romantic opposition to this move from Germans outside the east, but most would take the view that if that region wanted to flounce off and take its poverty with it, the sooner the better.
Neither such secession would ever happen, because of the money tap.
Rail fares: If the government subsidy in Europe is roughly the same as in the UK, why are our rail fares so high ? Are our rail companies inefficient or is it a licence to print money ?
Can I have a linky for that assertion please? And what is roughly the same? The total subsidy, the subsidy per passenger journey? The subsidy per passenger mile?
Then there is the next question: comparatively speaking, are our rail fares higher?
With optimal inflation reckoned to be at 2%, this is pretty much BANG ON.
@BenM You do like to cry wolf alot - there are issues with this Gov't but these inflation figures are certainly no problem whatsoever.
The target is 2pc and despite interest rates at 0.5pc there is a large undershoot.
I didn't say we're in a deflationary spiral. Not yet anyway. Just put an alert out there.
We were hearing similar denials from the eurozone 6 months ago. If the recovery had substance inflation would be higher and yes interest rates would be starting to track higher too.
But there is no guts to this consumer debt, McJob driven recovery.
We are seeing signs of the beginning of a deflationary spiral a la Japan.
Of all the daft comments on here today criticizing the inflation figure this is the funniest.
Just wait and see. Service sector alone does not make the economy. I sell in the real world. Since July, demand has fallen off the cliff.
In any event, falling inflation of the kind we are seeing could indeed be a start of deflation.
Demand has fallen off the cliff???
Real world???
Do you work in business, in July our turnover (we are an electrical contractor) was up over 100% on the previous year, all our competitors are experiencing similar growth, the economy is booming, wake up!
The breaking news is that WIND is reporting to the JNN the contents of the latest ARSE 2015 General Election and "JackW Dozen" Projections. (Change from 5th August Projection) :
Con 314 (+2) .. Lab 273 (-3) .. LibDem 32 (+2) .. SNP 8 (-1) .. PC 2 .. NI 18 .. UKIP 1 .. Respect 0 .. Green 1 .. Ind 0 .. Speaker 1
Conservatives 12 seats short of a majority Labour 53 seats short of a majority ......................................................................................
JackW doesn't know his ARSE from the Sunil on Sunday's ELBOW*!
(*published Sunday evening and re-posted yesterday afternoon)
One important point, no commentators have raised. At least, I have not read anything about it. The point is Scottish bond yields post independence. Even in a currency union with the rUK, interest rates in Scotalnd will begin to diverge from the rUK. Euro countries have different bond yields as we know. Actually, I do not know which way it will go. Probably higher due to uncertainty.
It would be inevitable that Scottish bond rates would be considerably higher than those of rUK. The risk of default for a country which cannot print its own currency is inevitably higher.
And yet Irish yields have been lower than UK yields in recent times.
But Ireland has the ECB which can intervene and remove the currency risk (and even arguably the default risk) and it has gone through the steps I have described to establish its credit rating. It is not starting from scratch.
Also, I agree with those that point out that very low bond rates are not necessarily something to be proud of. They suggest an economy where opportunities for investment are poor, where there is a good deal of caution and people fear the worst. This has been driving rates in many of the EZ countries including Ireland although it is doing a lot better than most, partly because unlike us its major export market (us) is quite buoyant.
Oh and the ECB has shagged the Irish several times over as they struggled to cope with their debt mountain.
The way the ECB treated and treats the smaller countries like Ireland, Greece and Portugal is one of the many reasons that Salmond would never have been able to sell Euro membership. They were given too low interest rates and inadequate banking controls for years which distorted their economies driving housing booms and doubtful investment because Germany had its inflation under control and did not need higher interest rates.
When the inevitable hit the fan they had to listen to smug lectures about how it was all their own fault. I was in Portugal on holiday recently and the anger towards German economic policy is palpable.
Also, I agree with those that point out that very low bond rates are not necessarily something to be proud of. They suggest an economy where opportunities for investment are poor, where there is a good deal of caution and people fear the worst.
I remember the ridicule Balls used to come in for here when he used a similar line.
Total crap, bring back Avery, at least his spinning was funny.
Osborne has totally failed to make the impression on the deficit any proper conservative should.
Consequently he now has no money to give to the strivers whose votes win elections.
His complete failure on the deficit probably explains why he is in thrall to those at the treasury who think its a good idea to confiscate money without a court order. To shut down tax breaks on pensions for short term gain. Those who think that when the state has failed, citizens should be penalised to make up for it.
Osborne is the reason the tories are toxic. Even his own MPs are against him. See Mark Field in City am today.
I was only pointing out that a country that cant print its own currency can have lower bond rates than one that can.
Ireland is a part of a group that can print its own currency. The ECB is its bank in the same way that the BoE would be Scotland's in the event of currency union. It ignores their needs completely but it does exist.
Also, I agree with those that point out that very low bond rates are not necessarily something to be proud of. They suggest an economy where opportunities for investment are poor, where there is a good deal of caution and people fear the worst.
I remember the ridicule Balls used to come in for here when he used a similar line.
Not from me. Our bond rates were also deflated by an aggressive QE program which made buying UK bonds a one way bet.
They were given too low interest rates and inadequate banking controls for years which distorted their economies driving housing booms and doubtful investment because Germany had its inflation under control and did not need higher interest rates.
This is why the [apparently successful] use of market restrictions by the FCA to control house price growth in the UK is so interesting, as the UK experience outside the Euro was not really dramatically better. We had interest rates that were too high for most of the economy, but too low to avoid a house price boom.
If we have definitively abandoned a fixation with an entirely "free" market in mortgages, so that we can use sensible restrictions to control house price growth, and so not distort interest rates, then it would be a very helpful development for the long-term health of the UK economy.
Rail fares: If the government subsidy in Europe is roughly the same as in the UK, why are our rail fares so high ? Are our rail companies inefficient or is it a licence to print money ?
Alot of commuter fares are below the market rate. Great business to be a seller in, huge demand.
People always say its the final straw etc. But when push comes to shove they buy their season ticket.
They were given too low interest rates and inadequate banking controls for years which distorted their economies driving housing booms and doubtful investment because Germany had its inflation under control and did not need higher interest rates.
This is why the [apparently successful] use of market restrictions by the FCA to control house price growth in the UK is so interesting, as the UK experience outside the Euro was not really dramatically better. We had interest rates that were too high for most of the economy, but too low to avoid a house price boom.
If we have definitively abandoned a fixation with an entirely "free" market in mortgages, so that we can use sensible restrictions to control house price growth, and so not distort interest rates, then it would be a very helpful development for the long-term health of the UK economy.
Agreed but I think it is a little early to call Mission Accomplished on that one.
I was trying to find it but I read somewhere in the last week that the UK performance since the formation of the euro was actually pretty stellar despite having the worst recession and a slow recovery.
Rail fares: If the government subsidy in Europe is roughly the same as in the UK, why are our rail fares so high ? Are our rail companies inefficient or is it a licence to print money ?
Alot of commuter fares are below the market rate. Great business to be a seller in, huge demand.
People always say its the final straw etc. But when push comes to shove they buy their season ticket.
Probably propaganda, but I saw a poster at Coventry station the other day claiming that UK rail users rate the UK railway network more highly than French, Germans and Italians rate their networks. Maybe I should have taken a photo!
They were given too low interest rates and inadequate banking controls for years which distorted their economies driving housing booms and doubtful investment because Germany had its inflation under control and did not need higher interest rates.
This is why the [apparently successful] use of market restrictions by the FCA to control house price growth in the UK is so interesting, as the UK experience outside the Euro was not really dramatically better. We had interest rates that were too high for most of the economy, but too low to avoid a house price boom.
If we have definitively abandoned a fixation with an entirely "free" market in mortgages, so that we can use sensible restrictions to control house price growth, and so not distort interest rates, then it would be a very helpful development for the long-term health of the UK economy.
We need to wait and see how the situation develops and how the retail banks will move to get around the restrictions and then how the FCA reacts to them and if it sends them packing or if it turns a blind eye like the FSA did before them.
April 1.6628 May 1.6778 June 1.6878 July 1.6938 August 1.7042
EUR
April 1.1954 May 1.2132 June 1.2352 July 1.248 August 1.2658
OK So ? Go through the last 50 years, it has gone up and down.
It'll be keeping inflation down at the moment as it eliminates import inflation.
One of the functions of low inflation has been to send GBP down which will act as a stabiliser against further deflation by itself. With a proper monetary policy ending up in a deflationary spiral is difficult.
With optimal inflation reckoned to be at 2%, this is pretty much BANG ON.
@BenM You do like to cry wolf alot - there are issues with this Gov't but these inflation figures are certainly no problem whatsoever.
The target is 2pc and despite interest rates at 0.5pc there is a large undershoot.
I didn't say we're in a deflationary spiral. Not yet anyway. Just put an alert out there.
We were hearing similar denials from the eurozone 6 months ago. If the recovery had substance inflation would be higher and yes interest rates would be starting to track higher too.
But there is no guts to this consumer debt, McJob driven recovery.
I wonder what you would be saying if infaltion had gone up tp 3%, infaltion spirally out of control, failed chancellor etc. If he cured cancer you would still criticise him.
Nope, because just as I'm not a hysteric on the national debt, I'm not hysterical about moderate inflation either. Especially if we were seeing a real recovery.
"So why is Boston Consulting Group so optimistic, especially given that UK manufacturing stagnated between 2000 and 2008, even before the collapse of Lehman Brothers? The key is that the UK’s wage costs – defined as how much firms need to pay per unit of work – have gone up by 16pc over the past decade. In France, wage costs are up 52pc and in Italy they are up by 62pc, it calculates. Britain’s corporation tax cuts, one of Chancellor George Osborne’s best policies, have also helped contain overall costs, and our labour market remains far more flexible than that of many other rival locations. "
The long stagnation before the crash in manufacturing is a feature of our economy that is too often overlooked as well.
Total crap, bring back Avery, at least his spinning was funny.
Osborne has totally failed to make the impression on the deficit any proper conservative should.
Consequently he now has no money to give to the strivers whose votes win elections.
His complete failure on the deficit probably explains why he is in thrall to those at the treasury who think its a good idea to confiscate money without a court order. To shut down tax breaks on pensions for short term gain. Those who think that when the state has failed, citizens should be penalised to make up for it.
Osborne is the reason the tories are toxic. Even his own MPs are against him. See Mark Field in City am today.
The conservatives have a particularly poor record on the deficit.
So why you Tories still expect a different outcome to the shambles we're witnessing is bizarre.
Rail fares: If the government subsidy in Europe is roughly the same as in the UK, why are our rail fares so high ? Are our rail companies inefficient or is it a licence to print money ?
Alot of commuter fares are below the market rate. Great business to be a seller in, huge demand.
People always say its the final straw etc. But when push comes to shove they buy their season ticket.
Probably propaganda, but I saw a poster at Coventry station the other day claiming that UK rail users rate the UK railway network more highly than French, Germans and Italians rate their networks. Maybe I should have taken a photo!
(Note: this is an independent survey performed by the European Commission, and not be the British railways industry, as someone has previously claimed).
My preferred solution for the railways would be to have them state run and commuter season tickets sold at the revenue maximisation point.
There should be a formula linking season ticket prices to the distance travelled and the income of the person buying the ticket. Just like VAT, travel costs have a regressive impact on disposable income.
They were given too low interest rates and inadequate banking controls for years which distorted their economies driving housing booms and doubtful investment because Germany had its inflation under control and did not need higher interest rates.
This is why the [apparently successful] use of market restrictions by the FCA to control house price growth in the UK is so interesting, as the UK experience outside the Euro was not really dramatically better. We had interest rates that were too high for most of the economy, but too low to avoid a house price boom.
If we have definitively abandoned a fixation with an entirely "free" market in mortgages, so that we can use sensible restrictions to control house price growth, and so not distort interest rates, then it would be a very helpful development for the long-term health of the UK economy.
We need to wait and see how the situation develops and how the retail banks will move to get around the restrictions and then how the FCA reacts to them and if it sends them packing or if it turns a blind eye like the FSA did before them.
The situation has developed. Loans down prices down. And the whoe point of help to buy was that lenders were not lending - or rather they were requiring large deposits.
And in reflection of what 'OrbitusSumMe' says - well yes fair points but there have previously been restrictions on mortgages. I'm glad the absurdities of the Labour years have gone. I presume that the use and or overuse of the retail market has gone too, together with securitisation.
I think multiple operators on a single line could work, it may introduce some confusion, but it would also bring in real competition. Having Virgin run the ECML and First run the WCML both exclusively means very little in terms of direct competition, that only happens when the franchises come up for renewal and at that point the company who makes the most outrageously cynical promises tends to win (see Govia/GoAhead winning recently).
Introducing actual competition has to be the key to fixing our railways, that or a fully nationalised sector with no competition and centrally set pricing. Of those the former is surely better.
If both Virgin and First ran alternating services on the ECML with Virgin offering tickets for £30 each way and First at £25 each way, that's competition. People can use airports without any difficulty and you get hundreds of airlines leaving from the same port there, I think it wouldn't be too difficult to get people to adjust to multiple train operators running the same routes. It is because of Ryanair and Easyjet that short haul flights are so much cheaper than they used to be, if the government had stepped in back then and told Easyjet and Ryanair that the existing routes BA ran were exclusive to BA and they they would have to wait until BA's licence ran out to bid for them, air travel would be as expensive as they have ever been.
Comments
As ever he's trying to square a circle by using a triangle.
There should be inflation pressure should there not, if the economy was properly recovering?
And a cost-of-living crisis with inflation at 1.6%? How did Osborne get us into this mess? (Blinkered ideology is the answer of course)
Money's always helpful but I doubt Toro Rosso needs it the way some teams do (it's owned by a billionaire).
Get me a ticket now! Get me a ticket now! Get me a ticket now!
That inflation pressure has eased for one month is hardly armageddon. If it goes on for the next 6 months you might have a point. But filling up for 125.9p a litre instead of 130.9p two months ago is a welcome relief, it's not a deflation spiral.
This battle and therefore its effect on inflation is only just beginning.
Our low inflation rate is a function of falling petrol prices and a slightly stronger currency year on year coupled with a highly flexible labour market which is creating jobs. When the latter slows down as we approach 5% unemployment wages will naturally start to rise. Next month YoY wage rises will be around 1.1% which is not that far below the inflation rate, and that's with financial services dragging the headline rate down by 20-40bp. I would have thought you of all people would support slower wage growth in that particular sector.
That and the Laotion Kip are currencies where one does need a VERY large wallet to carry them about. I think a 10 minute taxi ride in Laos cost us 40,000 Kip a couple of years ago.
With optimal inflation reckoned to be at 2%, this is pretty much BANG ON.
@BenM You do like to cry wolf alot - there are issues with this Gov't but these inflation figures are certainly no problem whatsoever.
Tic Toc http://www.timeanddate.com/countdown/to?day=7&month=5&msg=UK+General+Election&p0=0&year=2015
We are still struggling to employ all the immigrants of the last 10+years, plus all those who are coming off incapacity benefits where they had been placed incorrectly by the last government.
Thatcher and Hodgkin: How chemistry overcame politics
This fascinating account of MT and her former tutor who won a Nobel Prize for Chemistry, is brought to life tomorrow afternoon:
The Chemistry Between Them is the Afternoon Play on BBC Radio 4 at 14:15 BST on Wednesday 20 August.
http://www.bbc.co.uk/news/uk-politics-28801302
What Salmond is suggesting is pretty close to the situation of 'Zero Hour,' in Germany immediately after the war when they had no currency. The result was that in the occupation zones the effective currency was cigarettes, sex, dollars or slices of bread. Is this what Salmond is envisaging as the bright future for Scotland? What will he be using to barter with?
It's just astounding that Wee Eck thought he could get as far as 1 month to go to a full Sindy referendum and not have even a coherent Plan A let alone a Plan B on the most important issue of all. What an utter clusterfu<k of a policy vacuum. He really, genuinely thought he could bluster through this one. What a tool.
As we get closer to the general election so long odds on bets become more viable
A 1-10 bet now has a 14% yield for instance.
No tips in particular but something to bear in mind.
Too many bl**dy PPEs!
The resources that Lord Ashcroft is putting into polling are remarkable but am I alone in wondering if his money is being spent as well as it might be? His weekly poll was ridiculously volatile and, so far, the marginal polling is not showing anything particularly different from UNS on the national polls, any difference being well within the MOE. It would be interesting indeed if that changed of course.
I didn't say we're in a deflationary spiral. Not yet anyway. Just put an alert out there.
We were hearing similar denials from the eurozone 6 months ago. If the recovery had substance inflation would be higher and yes interest rates would be starting to track higher too.
But there is no guts to this consumer debt, McJob driven recovery.
For all Labour's cries of infamy several government policies were kicked off by Labour and merely continued by the coalition. One thinks for example of education reforms and introducing private providers into the NHS as well as starting to tackle welfare.
Low interest rates also incentivise businesses to invest, a higher base rate would allow companies to sit on cash, at the moment cash in the bank gives practically no return.
In an economy such as ours low interest rates are absolutely key and until the state sector stops deleveraging we can't afford for them to rise. So the fall in inflation to 1.6% is good news. In fact a further fall could even be welcome as it may lead to further monetary stimulus to weaken the pound, though I think inflation at around 1.5% is optimal as it alleviates pretty much all the pressure to raise rates. Once the state has deleveraged then inflation will rise naturally and interest rates will follow. I don't think we will see rates above 2% for a very long time though, maybe after the next cycle, but not this time. Chinese wages are deflating again, so I expect that will play a key role in over the next few years as the cost of finished manufactured goods begins to fall again.
Margin of error stuff, and I for one am glad that food and fuel seem to be going nowhere fast. Filling the car up for sub £1.30 (Diesel) feels good.
Edit: actually rates - it wasnt the main rate that the Government didnt follow the recommendation on
It is still the second largest currency in the world. Interestingly, against the USD, on Aug 16, 2013, EUR = $1.334. On Friday, EUR = $ 1.3388. The world of Euro has not collapsed whatever the doomsdayers have to say.
If an independent Scotland were to join the EU, it would have to take on the Euro anyway.
As I said that whilst he would have faced some scorn, he would not be in the vacuum that he is in when faced with the rejection of Plan A by the rUK.
For me, there is a legitimate complaint that those already in work are not benefitting from the recovery sufficiently. The increase in personal allowances helps as does the holding down of fuel duties etc but the complaint that the lower paid have disproportionately suffered seems right with benefit cuts aggravating the situation. Recognising that by increasing the Minimum Wage seems good economics, good policy (since it transfers more of the marginal cost of employment onto the employers and away from government) and good politics. I very much hope that George goes for it.
* Labour management speak for factory closures and disabled people paid to sit at home instead.
There is no reason why Scotland can't be a successful, prosperous independent nation.
Provided it sets out on a decent prospectus - Project Fib has morphed into Project Farce and in desperation is lashing out with Project Fear.... The Tories will wreck something we already control and claimed we would protect in our 2011 manifesto....
In any event, falling inflation of the kind we are seeing could indeed be a start of deflation.
GBP vs USD
Official HMRC monthly rates
April 1.6628
May 1.6778
June 1.6878
July 1.6938
August 1.7042
EUR
April 1.1954
May 1.2132
June 1.2352
July 1.248
August 1.2658
He seems to have gone quiet on his house price Armageddon posts, though.
The big picture is actually a remarkably good combination, despite the headwinds from the Eurozone:
- House prices stable after rising 10.2% over the last year, from a low base. That is just right for maintaining the very strong growth in housebuilding activity without risk of a bubble
- CPI 1.6%, RPI 2.5%: The CPI figure is a shade low, however that's better than inflation rearing its ugly head at this delicate stage in the recovery
- Growth strong at 3.2% - remarkable in the circumstances
- Unemployment falling more rapidly than expected, now just 6.4%, with most of the growth in employment coming from full-time jobs
- Rebalancing of employment from the public sector to the private sector going very well indeed
- Business investment rising fast (5% in first quarter of 2014)
It's really hard to see how things could be better placed. That's why Labour are reduced to the sterile argument about wages not yet rising much - a politically misguided line, like all of their previous ones on the economy this parliament, because it will be overtaken by events by May 2015.
Of course there's a lot further to go and the fall in the deficit is slower than we would like (although I think that with the current strong growth the OBR will soon revise its deficit forecasts in a favourable direction). We just have to hope that the Eurozone, and the risk of a Miliband government, don't blow us off-course again.
They have gone quiet. House prices are down, not least in the capital. Morgtgage lending is down. This is in no small measure due to new rules and stress tests by the Financial Conduct Authority. Osborne set up the FSA. He supported (probably instigated) the rules.
http://www.politicshome.com/uk/story/41764/sign_up_pro.html
Osborne is showing he is a good chancellor. If the critics heads are not exploding then their fantasy world is certainly imploding.
On the 'indyref'.
How reliable is Panelbase?
http://www.heraldscotland.com/news/home-news/new-recruits-banned-by-panelbase-from-indyref-polls.1378556935
''The prominent group Panelbase has shut its polls to new members amid speculation about an "organised sign-up of Yes campaigners" trying to influence the outcome.'' (Sept 13)
Priceless (no pun intended).
In time of course Scotland could establish a credit record, elect sane governments, rebalance their economy away from the public sector, either establish their own currency or join the euro and learn to live within its means. A counterbalance to the volatility of oil is that our economy would no longer be on the yoyo of London/SE England property prices which increases the volatility of the pound and, at least historically, has required the UK to have higher interest rates and a tendency to higher inflation.
But it would be a bumpy ride, no doubt about it.
er, which is a devolved power Salmond has complete control over. - extraordinary cutzpah.
Isn't the NHS an activity devolved to the Scottish parliament? If so then would independence make any difference?
Plus if 'privatisation' is the issue will an independent Scotland look to nationalise all the private GP surgeries?
There was quite a bit of comment in the Economics columns a few years ago of the Bank of England effectively abandoning the inflation target of 2%, and going for a target of 5% growth in nominal GDP. With annual real growth in GDP of 3.2% and CPI at 1.6% the implied growth in nominal GDP would be [roughly] 4.8%, pretty much on this target.
This is in very marked contrast to the Eurozone where nominal GDP growth is [roughly] 1.1% {CPI 0.4%, GDP growth 0.7%} and heading down.
Of course, the failure to see real increases in wages is disappointing, but for the moment it seems to be the inevitable counterpart to surprisingly rapid reductions in unemployment, and I don't think I would argue that I'd rather see higher unemployment and higher wage growth for the smaller number of people employed.
Also, I agree with those that point out that very low bond rates are not necessarily something to be proud of. They suggest an economy where opportunities for investment are poor, where there is a good deal of caution and people fear the worst. This has been driving rates in many of the EZ countries including Ireland although it is doing a lot better than most, partly because unlike us its major export market (us) is quite buoyant.
I see the Scotch referendum as akin to asking the relevant region of Germany today if they want to flounce out of the BRD and reconstitute the DDR, along its previous ideological lines. There would be some misty, romantic opposition to this move from Germans outside the east, but most would take the view that if that region wanted to flounce off and take its poverty with it, the sooner the better.
Neither such secession would ever happen, because of the money tap.
Then there is the next question: comparatively speaking, are our rail fares higher?
Real world???
Do you work in business, in July our turnover (we are an electrical contractor) was up over 100% on the previous year, all our competitors are experiencing similar growth, the economy is booming, wake up!
(*published Sunday evening and re-posted yesterday afternoon)
When the inevitable hit the fan they had to listen to smug lectures about how it was all their own fault. I was in Portugal on holiday recently and the anger towards German economic policy is palpable.
I was only pointing out that a country that cant print its own currency can have lower bond rates than one that can. I remember the ridicule Balls used to come in for here when he used a similar line.
Osborne has totally failed to make the impression on the deficit any proper conservative should.
Consequently he now has no money to give to the strivers whose votes win elections.
His complete failure on the deficit probably explains why he is in thrall to those at the treasury who think its a good idea to confiscate money without a court order. To shut down tax breaks on pensions for short term gain. Those who think that when the state has failed, citizens should be penalised to make up for it.
Osborne is the reason the tories are toxic. Even his own MPs are against him. See Mark Field in City am today.
Not from me. Our bond rates were also deflated by an aggressive QE program which made buying UK bonds a one way bet.
If we have definitively abandoned a fixation with an entirely "free" market in mortgages, so that we can use sensible restrictions to control house price growth, and so not distort interest rates, then it would be a very helpful development for the long-term health of the UK economy.
People always say its the final straw etc. But when push comes to shove they buy their season ticket.
I was trying to find it but I read somewhere in the last week that the UK performance since the formation of the euro was actually pretty stellar despite having the worst recession and a slow recovery.
"So why is Boston Consulting Group so optimistic, especially given that UK manufacturing stagnated between 2000 and 2008, even before the collapse of Lehman Brothers? The key is that the UK’s wage costs – defined as how much firms need to pay per unit of work – have gone up by 16pc over the past decade. In France, wage costs are up 52pc and in Italy they are up by 62pc, it calculates. Britain’s corporation tax cuts, one of Chancellor George Osborne’s best policies, have also helped contain overall costs, and our labour market remains far more flexible than that of many other rival locations. "
The long stagnation before the crash in manufacturing is a feature of our economy that is too often overlooked as well.
So why you Tories still expect a different outcome to the shambles we're witnessing is bizarre.
http://www.railtechnologymagazine.com/Rail-News/uk-ranked-second-in-european-passenger-survey
http://www.raildeliverygroup.com/media-centre/press-releases/uks-rail-passengers-most-satisfied-in-europe-says-new-research/
(Note: this is an independent survey performed by the European Commission, and not be the British railways industry, as someone has previously claimed).
And in reflection of what 'OrbitusSumMe' says - well yes fair points but there have previously been restrictions on mortgages. I'm glad the absurdities of the Labour years have gone. I presume that the use and or overuse of the retail market has gone too, together with securitisation.
Introducing actual competition has to be the key to fixing our railways, that or a fully nationalised sector with no competition and centrally set pricing. Of those the former is surely better.
If both Virgin and First ran alternating services on the ECML with Virgin offering tickets for £30 each way and First at £25 each way, that's competition. People can use airports without any difficulty and you get hundreds of airlines leaving from the same port there, I think it wouldn't be too difficult to get people to adjust to multiple train operators running the same routes. It is because of Ryanair and Easyjet that short haul flights are so much cheaper than they used to be, if the government had stepped in back then and told Easyjet and Ryanair that the existing routes BA ran were exclusive to BA and they they would have to wait until BA's licence ran out to bid for them, air travel would be as expensive as they have ever been.