On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.
But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.
Something somewhere is clearly quite wrong with the media narrative on Cummings.
Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.
Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.
Javid resigned over his SPADS having to answer to Cummings. To lose a second CofE would look very bad, so Sunaks SPADS may get nominal control by Cummings, but in practice very little.
The other thing is that Cummings agenda is unusual for a UK right winger. It is Cultural and organisational, not economic. He hates the Civil Service in all its forms, and wants to smash what he sees as the Blob. Brexit too is driven by culture war, not economics. Cummings is not bothered by economics, or whether the countries debts are sustainable.
Both Cummings and Sunak have one thing in common. Both were wealthy from the start, but then married into very wealthy families. Neither has ever had to go short personally and never will, as such culturally they are very happy spending money, as there has always been an inexhaustible supply. We will see if that is true of the Treasury...
I think that the real finance implications take a year to hit. The July 31 tax payments have been deferred, and the income tax due on Jan 31 is 11 months of normal income. Corporation tax is also paid 9 months after fin year finishes. Tax reciepts will appear to be OK for some time yet, but will fall off a cliff in 2021, while spending remains very high. We are at the running in the air stage of a Wile E Coyote cartoon.
I guess the question is, does it matter? Everyone everywhere is running huge deficits now. Everyone who can is debasing their fiat currency through money printing to monetise these deficits. And gilt prices evyerwhere are still sky high. At some point orthodoxy says this all feeds through to high inflation. But of what, goods or assets? If I were writing the full budget, I'd equalise capital gains tax with income tax ahead of asset price inflation, just in case gilt yields start spiking beyond the control of our highly interventionist central bank.
The factor largely overlooked through this crisis has been the extent of balance sheet restructuring. From large caps, to SMEs to households. Massive amounts of corporate debt have been refinanced at negative real interest rates and with longer durations. Bye bye debt cliff edge. SMEs have been given a lifeline with often unsuitable very high interest short term debt, refinanced with longer term state guaranteed facilities. As for households, they've been given mortgage holidays and low rates to refinance at, a furlough scheme an order of magnitude more generous than redundancy and in many cases, no reduction in disposable income (or even an increase given commuting costs) but highly reduced avenues to blow that disposable income.
Glass half full says there's no meaningful second wave and we're at the start of a roaring decade. Albeit with as many losers as winners (poor old Pret).
But doesn't a rise in M3, which as you say tends to be inflationary also tend to lead to a hike in interest rates. As we are financing the pandemic by personal borrowing be that from HMRC deferments, which we might have to refinance by a bank loan in January, or from an extension to the mortgage, isn't that sub-optimal?
Ceteris paribus the country is facing massive deflation.
A boost in inflation right now is a good thing, not a bad thing.
Not if you are mortgaged up to the hilt and interest rates rise to 15%. During the Major Government my mortgage IIRC was for a while at around 18%.
Add general inflation to that and we have a heady cocktail of serious debt to deal with.
Part of me thinks Johnson is a lucky politician and the normal economic rules don't apply to him and we can all carry on as normal without consequence. Is that wishful thinking?
We aren't facing 15% interest or 4% inflation rates. We are facing 0.25% interest rates and deflation.
We need to get inflation away from deflation and back up to betweeen 2-3%.
You don't know that. The more money is pumped into the economy the higher the inflation. There are already some supply issues from imported and domestically produced material.
You might be right, but a consumer debt lead recovery can be problematic.
We do know that. What we are facing is deflation not high inflation, we know that from history and we know that from the evidence we have before us.
Yes the actions being taken now lead to "higher" inflation but "higher" than what?
When your inflation rate is 5% then higher inflation is bad. When your inflation rate is 10% then higher inflation is terrible. When your inflation is close to 0% and heading down then higher inflation is a good thing.
What is the inflation rate today?
What we are going through is a catastrophe not seen since the Spanish Flu. What was the inflation rate in the early 1920s in the UK after the Spanish Flu?
It is a long time since I was a student of economics but I could see inflation rising to five percent and interest rates likewise. That is catastrophic if one is already (as many will be) on the limit of their borrowing.
|People said the same on the back of QE after the GFC but in fact interest rates struggled to get over 1% and are now at 0.1%. It may be different this time because it is a different kind of shock but gilt markets indicate that we are going to have very low interest rates for some considerable time to come.
You may be right. However this flies in the face of what I was taught 40 years ago
The lack of impact from QE in particular after the GFC remains a mystery to me. My best guess is that it counterbalanced what would otherwise have been a severe cut in the money supply as a lot of the money that had been created by the monetisation of CDOs etc unwound and disappeared. In other words it off set a strong deflationary trend in the economy.
Of course politicians noticed that it became a free hit and it was inevitable that QE would be one of the first tools out of the box this time around. It is possible that we again have deflationary trends caused by a collapse in demand, much reduced earnings and a sharp rise in unemployment but it is equally possible that a lot of people have done rather well out of the lockdown and have money to burn.
Politicians are a selfish and short sighted breed and sooner or later we are going to use QE in unsuitable circumstances with disastrous consequences. Pandora's box is wide open. But we just might get away with it this time.
The thing that some people clearly understand about economics and others clearly don't is that it is circulation that matters.
Giving money to struggling businesses/individuals does absolutely nothing for the macro economy whatsoever as they cling on to that cash (and then continue to struggle if they're not getting anything circulated back to them).
What is needed is to get money circulating again. That is why I have been calling for a VAT cut here for months. And I've been laughed at here saying we need tax cuts with replies like "yeah and I'd like a supermodel".
A VAT cut is not the right way to go, however crowd-pleasing it might be in the short term.
First, there is a huge deadweight effect. Most of the purchases would have been made anyway, so all you're doing is cutting prices to individuals. They will save the difference.
Second, depending on the sector, people will often just bring forward future spending, leading to reduced economic growth when you take it away.
Third, there are often surprisingly large administrative costs involved in cutting VAT then raising it again, which is why, when they did it during the financial crisis, a lot of businesses did not even bother cutting their prices.
Fourth, sector-specific cuts lead to reclassifications and other inefficiencies.
Cutting less sexy business taxes, like payroll levies, or increasing capital allowances, gets you much more bang for your buck.
Isn't the point that businesses won't cut their prices and will therefore pocket the difference themselves making the business more viable.
(You could say the same about the stamp duty cut, eventually it gets worked into house-prices and they just go up by the difference - its what happened last time)
In terms of "bringing purchases forward", this is a natural consequence of having inflation of any level in the economy, people buy things now because they will cost more in the future. The alternative, deferring purchases, is worse for the economy and is usually driven by deflation.
The VAT cut is a quick way to save businesses money. The job retention schemes and half price meal system, clunky and unlikely to be terribly effective as it is, are the ways of maintaing consumer spending so that businesses can actually get the revenue in they will be keeping more of.
Targeting it to immediate consumables limits the bringing forward issue
How many people don’t go out for a meal because they went out a month ago? (Budget aside, in which case bringing forward isn’t an issue). The problem is with one time purchases like white goods*
* (it’s a little depressing that I hesitated before using that term for a domestic appliance)
Do suppose we are going to get complaints about "Brown Furniture", as it is the deprecated, devalued, unwanted antiques?
The problem was really introduced when 'black' became the designation for those with darker skin, way back when the ignorami of the middle ages saw their first darker skinned person and said 'black'. Black is the colour of darkness and night - the absence of light. It has always been synonymous with fear, death, unexpected violence etc. for obvious reasons. It shouldn't really be the designation for brown skin, though I completely appreciate there's no going back.
Prediction: Soon Sunak is going to be retenlessly undermined by Downing Street gnomes via anonymous briefing, whispering etc etc.
Even the idiots who surround Johnson must see that the contrast between Sunak's performances and his oration compared to the blathering, empty bluster of an old, tired, worn out looking Johnson are now stark to say the least.
Have a look at Johnson's face and body language during the wide shots during Sunak's Commons speech yesterday.....
Rule 1 of Tory Leadership challenges - the assassin never gets the crown.
So if Sunak wants to be leader, he needs to stay loyal(ish)
Did that apply to Boris?
Yes - supporting the other side in the referendum, when Cameron had given leave for people to do so, didn't count as back stabbing as far as the party was concerned.
It took him three years and two Prime Ministerial casualties before he was crowned. It wasn't all plain sailing.
Sunak was very good on R4 this morning - he really didn't put a foot wrong: he answered the questions, he explained the rationale well, he came over as open-minded and showing empathy, and best of all he didn't try to deny that his policies won't help everyone and will carry a deadweight. This is the kind of realism which used to be the core strength of the Conservative Party.
It's just a pity that the rest of the Cabinet doesn't show any of these characteristics, although the leaked Liz Truss letter suggests that she's at least beginning to get some contact with reality. Unfortunately it's too late to do much about the Dec 31st cliff-edge.
Err, yes. One more senior CS for the bin. Their job is to implement government policy, not to brief the BBC about how evil it is.
I dont know the details but presumably it is part of his job description to give approval or not on such schemes rather than just a random comment. If so, his duty is indeed to carry out an assessment and give his view, which the minister can then choose to agree with or overrule as he did. Sounds like the process worked as intended. Just blindly saying yes to whatever would be a failed process.
Indeed, of course he can argue his case to the minister in private, and robust discussion is of course part of these things. What he can't do is then go to the press, purely because he didn't get his way.
He works for the government, not the other way around.
Doing my bit for BA, booked tickets to Sicily for next month. Was advised to book the cheapest economy seat, wait for two days and get the club class upgrade. It worked, overall ticket cost for club class for two people came in at £370, 100% tier points as well.
I'd recommend everyone to do it this way around and book cheaper and wait for the upgrade promo. A friend got return tickets to Tokyo for £1300 club class this way instead of the £3400 ticket price.
Thanks for the tip, presumably this is specific to the current times rather than something that has worked generally in the past?
The thing that some people clearly understand about economics and others clearly don't is that it is circulation that matters.
Giving money to struggling businesses/individuals does absolutely nothing for the macro economy whatsoever as they cling on to that cash (and then continue to struggle if they're not getting anything circulated back to them).
What is needed is to get money circulating again. That is why I have been calling for a VAT cut here for months. And I've been laughed at here saying we need tax cuts with replies like "yeah and I'd like a supermodel".
A VAT cut is not the right way to go, however crowd-pleasing it might be in the short term.
First, there is a huge deadweight effect. Most of the purchases would have been made anyway, so all you're doing is cutting prices to individuals. They will save the difference.
Second, depending on the sector, people will often just bring forward future spending, leading to reduced economic growth when you take it away.
Third, there are often surprisingly large administrative costs involved in cutting VAT then raising it again, which is why, when they did it during the financial crisis, a lot of businesses did not even bother cutting their prices.
Fourth, sector-specific cuts lead to reclassifications and other inefficiencies.
Cutting less sexy business taxes, like payroll levies, or increasing capital allowances, gets you much more bang for your buck.
Isn't the point that businesses won't cut their prices and will therefore pocket the difference themselves making the business more viable.
(You could say the same about the stamp duty cut, eventually it gets worked into house-prices and they just go up by the difference - its what happened last time)
In terms of "bringing purchases forward", this is a natural consequence of having inflation of any level in the economy, people buy things now because they will cost more in the future. The alternative, deferring purchases, is worse for the economy and is usually driven by deflation.
The VAT cut is a quick way to save businesses money. The job retention schemes and half price meal system, clunky and unlikely to be terribly effective as it is, are the ways of maintaing consumer spending so that businesses can actually get the revenue in they will be keeping more of.
Targeting it to immediate consumables limits the bringing forward issue
How many people don’t go out for a meal because they went out a month ago? (Budget aside, in which case bringing forward isn’t an issue). The problem is with one time purchases like white goods*
* (it’s a little depressing that I hesitated before using that term for a domestic appliance)
Do suppose we are going to get complaints about "Brown Furniture", as it is the deprecated, devalued, unwanted antiques?
The problem was really introduced when 'black' became the designation for those with darker skin, way back when the ignorami of the middle ages saw their first darker skinned person and said 'black'. Black is the colour of darkness and night - the absence of light. It has always been synonymous with fear, death, unexpected violence etc. for obvious reasons. It shouldn't really be the designation for brown skin, though I completely appreciate there's no going back.
In the modern era, this was actually from Afro-American communities themselves, in the late 1960s. Reclaiming the word from the connotations above with something like pride or confidence was part of the idea, because "coloured" was seen as both evasive and perjorative, and negro simply as offensive.
Sunak's package will be popular with many, but for the poorest in our society it will go down like a bucket of sick, particularly the measures that are getting the headlines. Indirect benefits to the poor are well hidden, though I'm not denying there may be some. Save£10 a head when you go out to eat? We haven't been able to go to a restaurant for years. Cut in stamp duty? Do me a favour.
I know it's not a popular view on here, but many people are really struggling, and if you rely on food banks or even universal credit there's not a lot for you, unless you are young and a traineeship or apprenticeship comes through.
'Eat out to help out' may also simply postpone a lot of restaurant visits from July to August, for those whom a £10 saving makes a significant difference, so I'm not sure it will be a huge success.
But for most habitual restaurant-goers it's the fear of eating out that needs reducing, not the cost.
I am not sure the U3a Lunch Group to which my wife and I belong will be meeting in a room any time soon.
I can see it helping get the pensioner lunch and parents with adult children groups out again, and perhaps restaurants in shopping sites. Our local Macarthur Glen is open again (reduced hours to 10-6 not 10-8) and limited to 1500 customers on site at once. Their restaurant offering is Pizza Express and Wagamamas plus a small food court. For a lot of people it was shopping plus lunch.
Also perhaps people still on furlough who are bored?
The car park is filling up very much, and the shops seem to be ramping back up, according to the couple I asked, with high average transactions per customer. The place is approx 6m+ visitors a year.
Costs would be £15-30 a head plus drinks so the £10 would make a difference. Similarly at more attractive local pubs.
I wonder if anyone will be able to identify it as a Corona surcharge, as the reduced capacity is visible as an explicit cost?
Doing my bit for BA, booked tickets to Sicily for next month. Was advised to book the cheapest economy seat, wait for two days and get the club class upgrade. It worked, overall ticket cost for club class for two people came in at £370, 100% tier points as well.
I'd recommend everyone to do it this way around and book cheaper and wait for the upgrade promo. A friend got return tickets to Tokyo for £1300 club class this way instead of the £3400 ticket price.
Good for you - we`re off the Croatia on Sunday - a cheapo airline though.
Doing my bit for BA, booked tickets to Sicily for next month. Was advised to book the cheapest economy seat, wait for two days and get the club class upgrade. It worked, overall ticket cost for club class for two people came in at £370, 100% tier points as well.
I'd recommend everyone to do it this way around and book cheaper and wait for the upgrade promo. A friend got return tickets to Tokyo for £1300 club class this way instead of the £3400 ticket price.
Thanks for the tip, presumably this is specific to the current times rather than something that has worked generally in the past?
BA are usually stingy buggers with upgrades. No matter how much you fly with them, there's always a few people on the plane with the gold cards who are in front of you in the queue!
Err, yes. One more senior CS for the bin. Their job is to implement government policy, not to brief the BBC about how evil it is.
I dont know the details but presumably it is part of his job description to give approval or not on such schemes rather than just a random comment. If so, his duty is indeed to carry out an assessment and give his view, which the minister can then choose to agree with or overrule as he did. Sounds like the process worked as intended. Just blindly saying yes to whatever would be a failed process.
Indeed, of course he can argue his case to the minister in private, and robust discussion is of course part of these things. What he can't do is then go to the press, purely because he didn't get his way.
He works for the government, not the other way around.
No-one knows who went to the press. It may have been Cummings leaking to further his anti civil service programme, who knows?
Err, yes. One more senior CS for the bin. Their job is to implement government policy, not to brief the BBC about how evil it is.
That said, I share the concern. I am a director of the company that provides clerking and support services to the Scottish bar. We have about 70 staff on furlough. We will presumably receive £70k when they are all still in employment next year. But their jobs were never at risk.
It is a very blunt tool but I accept that finding a way to target it more effectively would have been difficult.
Sunak was very good on R4 this morning - he really didn't put a foot wrong: he answered the questions, he explained the rationale well, he came over as open-minded and showing empathy, and best of all he didn't try to deny that his policies won't help everyone and will carry a deadweight. This is the kind of realism which used to be the core strength of the Conservative Party.
It's just a pity that the rest of the Cabinet doesn't show any of these characteristics, although the leaked Liz Truss letter suggests that she's at least beginning to get some contact with reality. Unfortunately it's too late to do much about the Dec 31st cliff-edge.
Bloodlet Cummings. BINO trade deal in the Autumn. 80 seat majority, Boris is home and dry.
François, Bone, Bridgen and Philip Davis are seething, but what's not to like about that?
Prediction: Soon Sunak is going to be retenlessly undermined by Downing Street gnomes via anonymous briefing, whispering etc etc.
Even the idiots who surround Johnson must see that the contrast between Sunak's performances and his oration compared to the blathering, empty bluster of an old, tired, worn out looking Johnson are now stark to say the least.
Have a look at Johnson's face and body language during the wide shots during Sunak's Commons speech yesterday.....
Rule 1 of Tory Leadership challenges - the assassin never gets the crown.
So if Sunak wants to be leader, he needs to stay loyal(ish)
Did that apply to Boris?
Yes - supporting the other side in the referendum, when Cameron had given leave for people to do so, didn't count as back stabbing as far as the party was concerned.
It took him three years and two Prime Ministerial casualties before he was crowned. It wasn't all plain sailing.
Yes - and each time he wasn't the one wielding the knife.
Emirates have 120 parked A380s, they reckon they might get half of them flying again by the end of the year.
According to FB several crew have topped themselves as the redundancy notices came at the end of a long, mind sapping confined-to-barracks lockdown. Morale among the survivors does not seem to be high.
Emirates have 120 parked A380s, they reckon they might get half of them flying again by the end of the year.
According to FB several crew have topped themselves as the redundancy notices came at the end of a long, mind sapping confined-to-barracks lockdown. Morale among the survivors does not seem to be high.
Prediction: Soon Sunak is going to be retenlessly undermined by Downing Street gnomes via anonymous briefing, whispering etc etc.
Even the idiots who surround Johnson must see that the contrast between Sunak's performances and his oration compared to the blathering, empty bluster of an old, tired, worn out looking Johnson are now stark to say the least.
Have a look at Johnson's face and body language during the wide shots during Sunak's Commons speech yesterday.....
Rule 1 of Tory Leadership challenges - the assassin never gets the crown.
So if Sunak wants to be leader, he needs to stay loyal(ish)
Did that apply to Boris?
Yes - supporting the other side in the referendum, when Cameron had given leave for people to do so, didn't count as back stabbing as far as the party was concerned.
It took him three years and two Prime Ministerial casualties before he was crowned. It wasn't all plain sailing.
Yes - and each time he wasn't the one wielding the knife.
I doubt Mrs May agrees with you! In Camerons I think hed blame Gove most.
Sunak's package will be popular with many, but for the poorest in our society it will go down like a bucket of sick, particularly the measures that are getting the headlines. Indirect benefits to the poor are well hidden, though I'm not denying there may be some. Save£10 a head when you go out to eat? We haven't been able to go to a restaurant for years. Cut in stamp duty? Do me a favour.
I know it's not a popular view on here, but many people are really struggling, and if you rely on food banks or even universal credit there's not a lot for you, unless you are young and a traineeship or apprenticeship comes through.
'Eat out to help out' may also simply postpone a lot of restaurant visits from July to August, for those whom a £10 saving makes a significant difference, so I'm not sure it will be a huge success.
But for most habitual restaurant-goers it's the fear of eating out that needs reducing, not the cost.
The object of these benefits is not to save the better off customer a few quid, it is to ensure that there is work for the poorly paid waiter or bar tender. It is designed to be a continuation of the furlough scheme by other and better means and focused specifically on areas of marginal employment on minimum wage.
Yes, I get that. I'm just not sure that it will have sufficient impact, given my last sentence. And the fact that it is only for a month.
There is no doubt that the poorest paid in the least secure employment will be at the sharp end of this. I had a lot of sympathy for your earlier post and it is a view not often enough expressed.
You can be free to give a view and feel the appropriate comment is no comment.
No view on if thats the case but the two statements are in no way inconsistent.
I remember watching the CEO of a leading American comms provider sitting tight-lipped when asked if the US Government had any interception orders on their equipment, since it would have been illegal for him to confirm.
Doing my bit for BA, booked tickets to Sicily for next month. Was advised to book the cheapest economy seat, wait for two days and get the club class upgrade. It worked, overall ticket cost for club class for two people came in at £370, 100% tier points as well.
I'd recommend everyone to do it this way around and book cheaper and wait for the upgrade promo. A friend got return tickets to Tokyo for £1300 club class this way instead of the £3400 ticket price.
Thanks for the tip, presumably this is specific to the current times rather than something that has worked generally in the past?
Yes, I've never been offered upgrades for this kind of low cost before. I'm guessing BA would rather do someone pay £185 for the return flight than £67.
Prediction: Soon Sunak is going to be retenlessly undermined by Downing Street gnomes via anonymous briefing, whispering etc etc.
Even the idiots who surround Johnson must see that the contrast between Sunak's performances and his oration compared to the blathering, empty bluster of an old, tired, worn out looking Johnson are now stark to say the least.
Have a look at Johnson's face and body language during the wide shots during Sunak's Commons speech yesterday.....
Rule 1 of Tory Leadership challenges - the assassin never gets the crown.
So if Sunak wants to be leader, he needs to stay loyal(ish)
Did that apply to Boris?
Yes - supporting the other side in the referendum, when Cameron had given leave for people to do so, didn't count as back stabbing as far as the party was concerned.
It took him three years and two Prime Ministerial casualties before he was crowned. It wasn't all plain sailing.
Yes - and each time he wasn't the one wielding the knife.
Sunak was very good on R4 this morning - he really didn't put a foot wrong: he answered the questions, he explained the rationale well, he came over as open-minded and showing empathy, and best of all he didn't try to deny that his policies won't help everyone and will carry a deadweight. This is the kind of realism which used to be the core strength of the Conservative Party.
It's just a pity that the rest of the Cabinet doesn't show any of these characteristics, although the leaked Liz Truss letter suggests that she's at least beginning to get some contact with reality. Unfortunately it's too late to do much about the Dec 31st cliff-edge.
Bloodlet Cummings. BINO trade deal in the Autumn. 80 seat majority, Boris is home and dry.
François, Bone, Bridgen and Philip Davis are seething, but what's not to like about that?
80-seat majority and most of the leading Brexiteers are in the Cabinet and thus bound by collective responsibility to declare BINO as our greatest foreign policy success since Berlin fell.
It is interesting to speculate about how many billions have been saved from our balance of payments by the collapse of the holiday market this year. All other things being equal that will be a fiscal boost to our economy of a similar scale to what was announced by Sunak yesterday.
And without getting all global emergency about it, a major reduction in flights is almost certainly a good thing.
Emirates have 120 parked A380s, they reckon they might get half of them flying again by the end of the year.
According to FB several crew have topped themselves as the redundancy notices came at the end of a long, mind sapping confined-to-barracks lockdown. Morale among the survivors does not seem to be high.
The actual government house arrest was only three weeks, back in April, but there's still restrictions about meeting friends and most staff at the larger companies are in company accommodation. No parties.
Suicide is something that doesn't get discussed in these parts, it's un-islamic, but fair to say some of the younger cabin crew especially joined up to fly around the world and party non-stop, not to spend a few months in a small apartment.
No sorry, I was taking that as read (It could be wrong) and thinking through the implications on 'R'. One factor is that the death rate may well go down as you get control of the virus becuase you're hospitalising more mild cases that would otherwise be queued out by the most severe ones. If you're testing more, you'd also have a lower apparent death rate. It's difficult to establish a ground truth IFR as you've got lots of moving factors including treatment improving, testing criteria and hospital capacity and treatment of milder cases so they don't progress.
It is interesting to speculate about how many billions have been saved from our balance of payments by the collapse of the holiday market this year. All other things being equal that will be a fiscal boost to our economy of a similar scale to what was announced by Sunak yesterday.
And without getting all global emergency about it, a major reduction in flights is almost certainly a good thing.
Yes but remember all those foreign tourists who used to come here count as invisible exports.
It is interesting to speculate about how many billions have been saved from our balance of payments by the collapse of the holiday market this year. All other things being equal that will be a fiscal boost to our economy of a similar scale to what was announced by Sunak yesterday.
And without getting all global emergency about it, a major reduction in flights is almost certainly a good thing.
Yes but remember all those foreign tourists who used to come here count as invisible exports.
And the fee paying students. Hence the crisis in the University sector. I was surprised something wasn't said about that yesterday.
It is interesting to speculate about how many billions have been saved from our balance of payments by the collapse of the holiday market this year. All other things being equal that will be a fiscal boost to our economy of a similar scale to what was announced by Sunak yesterday.
And without getting all global emergency about it, a major reduction in flights is almost certainly a good thing.
Yes but remember all those foreign tourists who used to come here count as invisible exports.
Sunak was very good on R4 this morning - he really didn't put a foot wrong: he answered the questions, he explained the rationale well, he came over as open-minded and showing empathy, and best of all he didn't try to deny that his policies won't help everyone and will carry a deadweight. This is the kind of realism which used to be the core strength of the Conservative Party.
It's just a pity that the rest of the Cabinet doesn't show any of these characteristics, although the leaked Liz Truss letter suggests that she's at least beginning to get some contact with reality. Unfortunately it's too late to do much about the Dec 31st cliff-edge.
Bloodlet Cummings. BINO trade deal in the Autumn. 80 seat majority, Boris is home and dry.
François, Bone, Bridgen and Philip Davis are seething, but what's not to like about that?
80-seat majority and most of the leading Brexiteers are in the Cabinet and thus bound by collective responsibility to declare BINO as our greatest foreign policy success since Berlin fell.
Johnson could make that work. "Look at my fantastic deal with the EU that saved us from a calamitous WTO Brexit and preserved a million of your jobs. Has there every been a greater Prime Minister than me, Boris Johnson". It would be like hypnosis, the cabinet would all fall into line, because they know they do not want to be associated with "no deal".
It is interesting to speculate about how many billions have been saved from our balance of payments by the collapse of the holiday market this year. All other things being equal that will be a fiscal boost to our economy of a similar scale to what was announced by Sunak yesterday.
And without getting all global emergency about it, a major reduction in flights is almost certainly a good thing.
Good to see the positives! I think UK residents spend about £20bn more on foreign travel than we get back from foreign tourists here, so maybe around £10bn "saved" depending on how things pick up from here.
Sunak was very good on R4 this morning - he really didn't put a foot wrong: he answered the questions, he explained the rationale well, he came over as open-minded and showing empathy, and best of all he didn't try to deny that his policies won't help everyone and will carry a deadweight. This is the kind of realism which used to be the core strength of the Conservative Party.
It's just a pity that the rest of the Cabinet doesn't show any of these characteristics, although the leaked Liz Truss letter suggests that she's at least beginning to get some contact with reality. Unfortunately it's too late to do much about the Dec 31st cliff-edge.
Bloodlet Cummings. BINO trade deal in the Autumn. 80 seat majority, Boris is home and dry.
François, Bone, Bridgen and Philip Davis are seething, but what's not to like about that?
80-seat majority and most of the leading Brexiteers are in the Cabinet and thus bound by collective responsibility to declare BINO as our greatest foreign policy success since Berlin fell.
Johnson could make that work. "Look at my fantastic deal with the EU that saved us from a calamitous WTO Brexit and preserved a million of your jobs. Has there every been a greater Prime Minister than me, Boris Johnson". It would be like hypnosis, the cabinet would all fall into line, because they know they do not want to be associated with "no deal".
Genuinely, Johnson could sell EEA and probably get it through the HoC with little trouble
Err, yes. One more senior CS for the bin. Their job is to implement government policy, not to brief the BBC about how evil it is.
That said, I share the concern. I am a director of the company that provides clerking and support services to the Scottish bar. We have about 70 staff on furlough. We will presumably receive £70k when they are all still in employment next year. But their jobs were never at risk.
It is a very blunt tool but I accept that finding a way to target it more effectively would have been difficult.
The Chancellor's calculation is going to be that it will have some effect at the margins, and it doesn't need that many people unemployed for a few months to eat the cost of the bonus package.
(Very rough numbers, if there's 9m on furlough, then the £9bn cost of the scheme is the same as 1m people each paid out £9k in benefits over a year if they lose their jobs).
Prediction: Soon Sunak is going to be retenlessly undermined by Downing Street gnomes via anonymous briefing, whispering etc etc.
Even the idiots who surround Johnson must see that the contrast between Sunak's performances and his oration compared to the blathering, empty bluster of an old, tired, worn out looking Johnson are now stark to say the least.
Have a look at Johnson's face and body language during the wide shots during Sunak's Commons speech yesterday.....
Rule 1 of Tory Leadership challenges - the assassin never gets the crown.
So if Sunak wants to be leader, he needs to stay loyal(ish)
Did that apply to Boris?
Yes - supporting the other side in the referendum, when Cameron had given leave for people to do so, didn't count as back stabbing as far as the party was concerned.
It took him three years and two Prime Ministerial casualties before he was crowned. It wasn't all plain sailing.
Yes - and each time he wasn't the one wielding the knife.
So a Marc Anthony figure. Et tu, Brute?
Which can work a number if ways - depending on your view of how... in the loop Marc Anthony was on the whole Liberator* thing.
*A farcical name for a gang of oligarchs. Brutus was apparently worried that Caesar was going to put a crimp on his extortion business.
The government is giving a lot of companies money to take back employees they were going to take back anyway, while not giving enough to make much difference to redundancy plans - except at the very margins. The more I think about yesterday's announcements as they will affect the real world, the less effective they look. The one undoubtedly good move was the apprenticeships funding. It was very smart to make it available, albeit at a slightly lower level, for the over-25s, too.
Err, yes. One more senior CS for the bin. Their job is to implement government policy, not to brief the BBC about how evil it is.
I dont know the details but presumably it is part of his job description to give approval or not on such schemes rather than just a random comment. If so, his duty is indeed to carry out an assessment and give his view, which the minister can then choose to agree with or overrule as he did. Sounds like the process worked as intended. Just blindly saying yes to whatever would be a failed process.
Indeed, of course he can argue his case to the minister in private, and robust discussion is of course part of these things. What he can't do is then go to the press, purely because he didn't get his way.
He works for the government, not the other way around.
Did he go to the press? Someone else may have leaked it.
You can be free to give a view and feel the appropriate comment is no comment.
No view on if thats the case but the two statements are in no way inconsistent.
Technically, perhaps, but I think it not unreasonable to infer in this instance that their reason for not thinking it appropriate to comment had just a little to do with the consequences to them if they spoke freely. It isnt an assumption conjured out of the aether.
Sunak was very good on R4 this morning - he really didn't put a foot wrong: he answered the questions, he explained the rationale well, he came over as open-minded and showing empathy, and best of all he didn't try to deny that his policies won't help everyone and will carry a deadweight. This is the kind of realism which used to be the core strength of the Conservative Party.
It's just a pity that the rest of the Cabinet doesn't show any of these characteristics, although the leaked Liz Truss letter suggests that she's at least beginning to get some contact with reality. Unfortunately it's too late to do much about the Dec 31st cliff-edge.
Bloodlet Cummings. BINO trade deal in the Autumn. 80 seat majority, Boris is home and dry.
François, Bone, Bridgen and Philip Davis are seething, but what's not to like about that?
80-seat majority and most of the leading Brexiteers are in the Cabinet and thus bound by collective responsibility to declare BINO as our greatest foreign policy success since Berlin fell.
Johnson could make that work. "Look at my fantastic deal with the EU that saved us from a calamitous WTO Brexit and preserved a million of your jobs. Has there every been a greater Prime Minister than me, Boris Johnson". It would be like hypnosis, the cabinet would all fall into line, because they know they do not want to be associated with "no deal".
Genuinely, Johnson could sell EEA and probably get it through the HoC with little trouble
Err, yes. One more senior CS for the bin. Their job is to implement government policy, not to brief the BBC about how evil it is.
I dont know the details but presumably it is part of his job description to give approval or not on such schemes rather than just a random comment. If so, his duty is indeed to carry out an assessment and give his view, which the minister can then choose to agree with or overrule as he did. Sounds like the process worked as intended. Just blindly saying yes to whatever would be a failed process.
Indeed, of course he can argue his case to the minister in private, and robust discussion is of course part of these things. What he can't do is then go to the press, purely because he didn't get his way.
He works for the government, not the other way around.
Did he go to the press? Someone else may have leaked it.
Well, quite, and if it turned out this was leaked to set him up to be fired, that would be as bad, if not worse.
Err, yes. One more senior CS for the bin. Their job is to implement government policy, not to brief the BBC about how evil it is.
I dont know the details but presumably it is part of his job description to give approval or not on such schemes rather than just a random comment. If so, his duty is indeed to carry out an assessment and give his view, which the minister can then choose to agree with or overrule as he did. Sounds like the process worked as intended. Just blindly saying yes to whatever would be a failed process.
Indeed, of course he can argue his case to the minister in private, and robust discussion is of course part of these things. What he can't do is then go to the press, purely because he didn't get his way.
He works for the government, not the other way around.
Did he go to the press? Someone else may have leaked it.
Well, quite, and if it turned out this was leaked to set him up to be fired, that would be as bad, if not worse.
Its not even a leak, its a government public letter he has to write as part of his job.
The government is giving a lot of companies money to take back employees they were going to take back anyway, while not giving enough to make much difference to redundancy plans - except at the very margins. The more I think about yesterday's announcements as they will affect the real world, the less effective they look. The one undoubtedly good move was the apprenticeships funding. It was very smart to make it available, albeit at a slightly lower level, for the over-25s, too.
Yeah biggest credit was the apprenticeships but the rest of the announcements (as I am afraid to say is common) fall apart with a bit of scrutiny.
Sunak was very good on R4 this morning - he really didn't put a foot wrong: he answered the questions, he explained the rationale well, he came over as open-minded and showing empathy, and best of all he didn't try to deny that his policies won't help everyone and will carry a deadweight. This is the kind of realism which used to be the core strength of the Conservative Party.
It's just a pity that the rest of the Cabinet doesn't show any of these characteristics, although the leaked Liz Truss letter suggests that she's at least beginning to get some contact with reality. Unfortunately it's too late to do much about the Dec 31st cliff-edge.
Bloodlet Cummings. BINO trade deal in the Autumn. 80 seat majority, Boris is home and dry.
François, Bone, Bridgen and Philip Davis are seething, but what's not to like about that?
80-seat majority and most of the leading Brexiteers are in the Cabinet and thus bound by collective responsibility to declare BINO as our greatest foreign policy success since Berlin fell.
Johnson could make that work. "Look at my fantastic deal with the EU that saved us from a calamitous WTO Brexit and preserved a million of your jobs. Has there every been a greater Prime Minister than me, Boris Johnson". It would be like hypnosis, the cabinet would all fall into line, because they know they do not want to be associated with "no deal".
Genuinely, Johnson could sell EEA and probably get it through the HoC with little trouble
For his legacy, it's his least worst option.
If the economy is at an absolutely catastrophic level, selling EEA may be surprisingly easy.
Err, yes. One more senior CS for the bin. Their job is to implement government policy, not to brief the BBC about how evil it is.
I dont know the details but presumably it is part of his job description to give approval or not on such schemes rather than just a random comment. If so, his duty is indeed to carry out an assessment and give his view, which the minister can then choose to agree with or overrule as he did. Sounds like the process worked as intended. Just blindly saying yes to whatever would be a failed process.
Indeed, of course he can argue his case to the minister in private, and robust discussion is of course part of these things. What he can't do is then go to the press, purely because he didn't get his way.
He works for the government, not the other way around.
Did he go to the press? Someone else may have leaked it.
Well, quite, and if it turned out this was leaked to set him up to be fired, that would be as bad, if not worse.
Just seen @noneoftheabove 's post a few posts below, which clears it up very well!
Err, yes. One more senior CS for the bin. Their job is to implement government policy, not to brief the BBC about how evil it is.
That said, I share the concern. I am a director of the company that provides clerking and support services to the Scottish bar. We have about 70 staff on furlough. We will presumably receive £70k when they are all still in employment next year. But their jobs were never at risk.
It is a very blunt tool but I accept that finding a way to target it more effectively would have been difficult.
The Chancellor's calculation is going to be that it will have some effect at the margins, and it doesn't need that many people unemployed for a few months to eat the cost of the bonus package.
(Very rough numbers, if there's 9m on furlough, then the £9bn cost of the scheme is the same as 1m people each paid out £9k in benefits over a year if they lose their jobs).
I don't think as many as 9m are still on the scheme, I think that was the peak figure, loads of people are already back to work. I'm pretty sure my employer won't be getting the £1k bonus for bringing me back as I've already started working after 5 weeks out of action. If my employer is eligible then the government needs to rethink eligibility criteria.
The government is giving a lot of companies money to take back employees they were going to take back anyway, while not giving enough to make much difference to redundancy plans - except at the very margins. The more I think about yesterday's announcements as they will affect the real world, the less effective they look. The one undoubtedly good move was the apprenticeships funding. It was very smart to make it available, albeit at a slightly lower level, for the over-25s, too.
My business partner was very excited that we will be paid for keeping people on that we were keeping on anyway, although I am yet to check this applies to Wales.
Having been involved in the delivery of funded apprenticeships previously, the added value, both in terms of learning and for career progression can be patchy. Although targeted investment in education and training makes much more sense to me than McDonalds vouchers.
Rishi sounding none too confident about the economy today. I reckon he's seen the economic data and it is dreadful
Smart politics. If things go well he's a cautious hand on the tiller empathetic about the risks and consequences. If things go badly he isn't caught out by bombast who did what he could. His boss might learn a bit from paying attention to this.
Prediction: Soon Sunak is going to be retenlessly undermined by Downing Street gnomes via anonymous briefing, whispering etc etc.
Even the idiots who surround Johnson must see that the contrast between Sunak's performances and his oration compared to the blathering, empty bluster of an old, tired, worn out looking Johnson are now stark to say the least.
Have a look at Johnson's face and body language during the wide shots during Sunak's Commons speech yesterday.....
Rule 1 of Tory Leadership challenges - the assassin never gets the crown.
So if Sunak wants to be leader, he needs to stay loyal(ish)
Did that apply to Boris?
Yes - supporting the other side in the referendum, when Cameron had given leave for people to do so, didn't count as back stabbing as far as the party was concerned.
It took him three years and two Prime Ministerial casualties before he was crowned. It wasn't all plain sailing.
Yes - and each time he wasn't the one wielding the knife.
So a Marc Anthony figure. Et tu, Brute?
Which can work a number if ways - depending on your view of how... in the loop Marc Anthony was on the whole Liberator* thing.
*A farcical name for a gang of oligarchs. Brutus was apparently worried that Caesar was going to put a crimp on his extortion business.
Isn't Liberator the leading LibDem in house journal, edited by Lord Bonkers and a collection of (mainly) Men, 27% women, and a Horse?
* Though TBF "gang of oligarchs" is probably a defensible description.
Err, yes. One more senior CS for the bin. Their job is to implement government policy, not to brief the BBC about how evil it is.
I dont know the details but presumably it is part of his job description to give approval or not on such schemes rather than just a random comment. If so, his duty is indeed to carry out an assessment and give his view, which the minister can then choose to agree with or overrule as he did. Sounds like the process worked as intended. Just blindly saying yes to whatever would be a failed process.
Indeed, of course he can argue his case to the minister in private, and robust discussion is of course part of these things. What he can't do is then go to the press, purely because he didn't get his way.
He works for the government, not the other way around.
Did he go to the press? Someone else may have leaked it.
Without knowing more I'm inclined to agree with @Noneoftheabove on this. Both Sunak and the boss of the HMRC should know their way around these topics - forthright discussions are needed - the ultimate decision rests with the Chancellor. Non approval is fine so long as it's implemented which of course it would be.
Err, yes. One more senior CS for the bin. Their job is to implement government policy, not to brief the BBC about how evil it is.
That said, I share the concern. I am a director of the company that provides clerking and support services to the Scottish bar. We have about 70 staff on furlough. We will presumably receive £70k when they are all still in employment next year. But their jobs were never at risk.
It is a very blunt tool but I accept that finding a way to target it more effectively would have been difficult.
The Chancellor's calculation is going to be that it will have some effect at the margins, and it doesn't need that many people unemployed for a few months to eat the cost of the bonus package.
(Very rough numbers, if there's 9m on furlough, then the £9bn cost of the scheme is the same as 1m people each paid out £9k in benefits over a year if they lose their jobs).
I don't think as many as 9m are still on the scheme, I think that was the peak figure, loads of people are already back to work. I'm pretty sure my employer won't be getting the £1k bonus for bringing me back as I've already started working after 5 weeks out of action. If my employer is eligible then the government needs to rethink eligibility criteria.
Email from HMRC yesterday suggests everyone ever on the scheme is eligible.
"To be eligible, employees will need to:
earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January have been furloughed by you at any point and legitimately claimed for under the Coronavirus Job Retention Scheme have been continuously employed by you up until at least 31 January 2021."
Err, yes. One more senior CS for the bin. Their job is to implement government policy, not to brief the BBC about how evil it is.
That said, I share the concern. I am a director of the company that provides clerking and support services to the Scottish bar. We have about 70 staff on furlough. We will presumably receive £70k when they are all still in employment next year. But their jobs were never at risk.
It is a very blunt tool but I accept that finding a way to target it more effectively would have been difficult.
The Chancellor's calculation is going to be that it will have some effect at the margins, and it doesn't need that many people unemployed for a few months to eat the cost of the bonus package.
(Very rough numbers, if there's 9m on furlough, then the £9bn cost of the scheme is the same as 1m people each paid out £9k in benefits over a year if they lose their jobs).
It's also worthwhile noting that quite a few companies have stated they will pay the furlough money they received eg Barratt's. I think what the Chancellor is expecting is that the big companies will, on the whole, repay the £1000 when they can do so and / or do not take it but that it is an incredibly helpful tool for smaller businesses. So, the overall net cost of the scheme may not be as high as appears at first sight.
The thing that some people clearly understand about economics and others clearly don't is that it is circulation that matters.
Giving money to struggling businesses/individuals does absolutely nothing for the macro economy whatsoever as they cling on to that cash (and then continue to struggle if they're not getting anything circulated back to them).
What is needed is to get money circulating again. That is why I have been calling for a VAT cut here for months. And I've been laughed at here saying we need tax cuts with replies like "yeah and I'd like a supermodel".
A VAT cut is not the right way to go, however crowd-pleasing it might be in the short term.
First, there is a huge deadweight effect. Most of the purchases would have been made anyway, so all you're doing is cutting prices to individuals. They will save the difference.
Second, depending on the sector, people will often just bring forward future spending, leading to reduced economic growth when you take it away.
Third, there are often surprisingly large administrative costs involved in cutting VAT then raising it again, which is why, when they did it during the financial crisis, a lot of businesses did not even bother cutting their prices.
Fourth, sector-specific cuts lead to reclassifications and other inefficiencies.
Cutting less sexy business taxes, like payroll levies, or increasing capital allowances, gets you much more bang for your buck.
Isn't the point that businesses won't cut their prices and will therefore pocket the difference themselves making the business more viable.
(You could say the same about the stamp duty cut, eventually it gets worked into house-prices and they just go up by the difference - its what happened last time)
In terms of "bringing purchases forward", this is a natural consequence of having inflation of any level in the economy, people buy things now because they will cost more in the future. The alternative, deferring purchases, is worse for the economy and is usually driven by deflation.
The VAT cut is a quick way to save businesses money. The job retention schemes and half price meal system, clunky and unlikely to be terribly effective as it is, are the ways of maintaing consumer spending so that businesses can actually get the revenue in they will be keeping more of.
Targeting it to immediate consumables limits the bringing forward issue
How many people don’t go out for a meal because they went out a month ago? (Budget aside, in which case bringing forward isn’t an issue). The problem is with one time purchases like white goods*
* (it’s a little depressing that I hesitated before using that term for a domestic appliance)
Do suppose we are going to get complaints about "Brown Furniture", as it is the deprecated, devalued, unwanted antiques?
The problem was really introduced when 'black' became the designation for those with darker skin, way back when the ignorami of the middle ages saw their first darker skinned person and said 'black'. Black is the colour of darkness and night - the absence of light. It has always been synonymous with fear, death, unexpected violence etc. for obvious reasons. It shouldn't really be the designation for brown skin, though I completely appreciate there's no going back.
I see where your are coming from, but the other half of the dichotomy is also inaccurate. Most people who are described as "white" would be more accurately described as "pink".
"Melanin-deficient" or "low-melanin" and "high-melanin", might be even more accurate, and linguistically reverse the positive/negative associations.
Err, yes. One more senior CS for the bin. Their job is to implement government policy, not to brief the BBC about how evil it is.
That said, I share the concern. I am a director of the company that provides clerking and support services to the Scottish bar. We have about 70 staff on furlough. We will presumably receive £70k when they are all still in employment next year. But their jobs were never at risk.
It is a very blunt tool but I accept that finding a way to target it more effectively would have been difficult.
The Chancellor's calculation is going to be that it will have some effect at the margins, and it doesn't need that many people unemployed for a few months to eat the cost of the bonus package.
(Very rough numbers, if there's 9m on furlough, then the £9bn cost of the scheme is the same as 1m people each paid out £9k in benefits over a year if they lose their jobs).
I don't think as many as 9m are still on the scheme, I think that was the peak figure, loads of people are already back to work. I'm pretty sure my employer won't be getting the £1k bonus for bringing me back as I've already started working after 5 weeks out of action. If my employer is eligible then the government needs to rethink eligibility criteria.
The £9bn figure was given yesterday, so yes, I think it does apply to your bosses too. Clearly the £1k won't make a lot of difference to City workers, but it will to the coffee shops and sandwich bars.
OT Ladbrokes and Corals (both in the same ownership, of course) seem to have pulled out of Oddschecker.
GVC pulls Ladbrokes, Coral and Betdaq brands from oddschecker
Renewal price could not be reached to showcase operator’s key UK brands on popular pricing grid
Sports betting GVC pulls Ladbrokes, Coral and Betdaq brands from oddschecker Renewal price could not be reached to showcase operator’s key UK brands on popular pricing gridJake Evans08 July 2020EmailPrint Share GVC has surprisingly called time on its deal with oddschecker after deciding to remove its Ladbrokes, Coral and Betdaq brands from the affiliate firm’s pricing grid. GVC’s UK-facing brands will be pulled from 9 July 2020 as EGR understands a price could not be agreed on a renewal between the operator and Flutter Entertainment-owned oddschecker.… https://egr.global/intel/news/gvc-pulls-ladbrokes-coral-and-betdaq-brands-from-oddschecker/ (£££, h-t Betfair forum)
Prediction: Soon Sunak is going to be retenlessly undermined by Downing Street gnomes via anonymous briefing, whispering etc etc.
Even the idiots who surround Johnson must see that the contrast between Sunak's performances and his oration compared to the blathering, empty bluster of an old, tired, worn out looking Johnson are now stark to say the least.
Have a look at Johnson's face and body language during the wide shots during Sunak's Commons speech yesterday.....
Rule 1 of Tory Leadership challenges - the assassin never gets the crown.
So if Sunak wants to be leader, he needs to stay loyal(ish)
What about Maggie T? Didn't a couple of "serious contenders" step back to let her challenge initially on that logic?
There is now an incentive for employers to bring back their staff from furlough and then select those who worked throughout during Covid for redundancy.
This stat has had remarkable publicity given how meaningless it is.
% of care home deaths out of total deaths in a country
The easiest way to make that % the lowest is to have lots of deaths outside of care homes, which is what has happened here! It is not a sign of success in any way.
Prediction: Soon Sunak is going to be retenlessly undermined by Downing Street gnomes via anonymous briefing, whispering etc etc.
Even the idiots who surround Johnson must see that the contrast between Sunak's performances and his oration compared to the blathering, empty bluster of an old, tired, worn out looking Johnson are now stark to say the least.
Have a look at Johnson's face and body language during the wide shots during Sunak's Commons speech yesterday.....
Rule 1 of Tory Leadership challenges - the assassin never gets the crown.
So if Sunak wants to be leader, he needs to stay loyal(ish)
What about Maggie T? Didn't a couple of "serious contenders" step back to let her challenge initially on that logic?
There is now an incentive for employers to bring back their staff from furlough and then select those who worked throughout during Covid for redundancy.
Nice.
Ha ha, I like the cynicism but in reality if they have chosen someone to work through furlough ahead of someone else they will nearly always be worth more than £1k extra to that business.
OT Ladbrokes and Corals (both in the same ownership, of course) seem to have pulled out of Oddschecker.
GVC pulls Ladbrokes, Coral and Betdaq brands from oddschecker
Renewal price could not be reached to showcase operator’s key UK brands on popular pricing grid
Sports betting GVC pulls Ladbrokes, Coral and Betdaq brands from oddschecker Renewal price could not be reached to showcase operator’s key UK brands on popular pricing gridJake Evans08 July 2020EmailPrint Share GVC has surprisingly called time on its deal with oddschecker after deciding to remove its Ladbrokes, Coral and Betdaq brands from the affiliate firm’s pricing grid. GVC’s UK-facing brands will be pulled from 9 July 2020 as EGR understands a price could not be agreed on a renewal between the operator and Flutter Entertainment-owned oddschecker.… https://egr.global/intel/news/gvc-pulls-ladbrokes-coral-and-betdaq-brands-from-oddschecker/ (£££, h-t Betfair forum)
Just at the time there's both a comet and a test match on...
Ah but they are playing again this morning. Decision at the toss still looks suspect, really looks like a bowler's morning.
Heh, still annoyed by our cloudy skies. Neowise should be the best comet since Hale Bopp here though, they don't come around too often ><. If it's clear I'll get up early.
On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.
But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.
Something somewhere is clearly quite wrong with the media narrative on Cummings.
Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.
Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.
Javid resigned over his SPADS having to answer to Cummings. To lose a second CofE would look very bad, so Sunaks SPADS may get nominal control by Cummings, but in practice very little.
The other thing is that Cummings agenda is unusual for a UK right winger. It is Cultural and organisational, not economic. He hates the Civil Service in all its forms, and wants to smash what he sees as the Blob. Brexit too is driven by culture war, not economics. Cummings is not bothered by economics, or whether the countries debts are sustainable.
Both Cummings and Sunak have one thing in common. Both were wealthy from the start, but then married into very wealthy families. Neither has ever had to go short personally and never will, as such culturally they are very happy spending money, as there has always been an inexhaustible supply. We will see if that is true of the Treasury...
I think that the real finance implications take a year to hit. The July 31 tax payments have been deferred, and the income tax due on Jan 31 is 11 months of normal income. Corporation tax is also paid 9 months after fin year finishes. Tax reciepts will appear to be OK for some time yet, but will fall off a cliff in 2021, while spending remains very high. We are at the running in the air stage of a Wile E Coyote cartoon.
I guess the question is, does it matter? Everyone everywhere is running huge deficits now. Everyone who can is debasing their fiat currency through money printing to monetise these deficits. And gilt prices evyerwhere are still sky high. At some point orthodoxy says this all feeds through to high inflation. But of what, goods or assets? If I were writing the full budget, I'd equalise capital gains tax with income tax ahead of asset price inflation, just in case gilt yields start spiking beyond the control of our highly interventionist central bank.
The factor largely overlooked through this crisis has been the extent of balance sheet restructuring. From large caps, to SMEs to households. Massive amounts of corporate debt have been refinanced at negative real interest rates and with longer durations. Bye bye debt cliff edge. SMEs have been given a lifeline with often unsuitable very high interest short term debt, refinanced with longer term state guaranteed facilities. As for households, they've been given mortgage holidays and low rates to refinance at, a furlough scheme an order of magnitude more generous than redundancy and in many cases, no reduction in disposable income (or even an increase given commuting costs) but highly reduced avenues to blow that disposable income.
Glass half full says there's no meaningful second wave and we're at the start of a roaring decade. Albeit with as many losers as winners (poor old Pret).
But doesn't a rise in M3, which as you say tends to be inflationary also tend to lead to a hike in interest rates. As we are financing the pandemic by personal borrowing be that from HMRC deferments, which we might have to refinance by a bank loan in January, or from an extension to the mortgage, isn't that sub-optimal?
Ceteris paribus the country is facing massive deflation.
A boost in inflation right now is a good thing, not a bad thing.
Not if you are mortgaged up to the hilt and interest rates rise to 15%. During the Major Government my mortgage IIRC was for a while at around 18%.
Add general inflation to that and we have a heady cocktail of serious debt to deal with.
Part of me thinks Johnson is a lucky politician and the normal economic rules don't apply to him and we can all carry on as normal without consequence. Is that wishful thinking?
We aren't facing 15% interest or 4% inflation rates. We are facing 0.25% interest rates and deflation.
We need to get inflation away from deflation and back up to betweeen 2-3%.
You don't know that. The more money is pumped into the economy the higher the inflation. There are already some supply issues from imported and domestically produced material.
You might be right, but a consumer debt lead recovery can be problematic.
We do know that. What we are facing is deflation not high inflation, we know that from history and we know that from the evidence we have before us.
Yes the actions being taken now lead to "higher" inflation but "higher" than what?
When your inflation rate is 5% then higher inflation is bad. When your inflation rate is 10% then higher inflation is terrible. When your inflation is close to 0% and heading down then higher inflation is a good thing.
What is the inflation rate today?
What we are going through is a catastrophe not seen since the Spanish Flu. What was the inflation rate in the early 1920s in the UK after the Spanish Flu?
It is a long time since I was a student of economics but I could see inflation rising to five percent and interest rates likewise. That is catastrophic if one is already (as many will be) on the limit of their borrowing.
|People said the same on the back of QE after the GFC but in fact interest rates struggled to get over 1% and are now at 0.1%. It may be different this time because it is a different kind of shock but gilt markets indicate that we are going to have very low interest rates for some considerable time to come.
You may be right. However this flies in the face of what I was taught 40 years ago
No it doesn't.
You've got to always consider the baseline. Yes inflation will go up relatively but not all "going up" is created equal.
If inflation goes up by 2% is that good or bad? 40 years ago it would have been considered bad based on what inflation was at the time but our base is different now.
Going up from 5% to 7% is bad Going up from 10% to 12% is terrible Going up from 0% to 2% is good. Going up from -1% to 1% is great.
Not all changes are equal. You need to think about the start point too and our start point is below-target inflation and has been for years and with a deflationary environment.
On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.
But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.
Something somewhere is clearly quite wrong with the media narrative on Cummings.
Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.
Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.
Javid resigned over his SPADS having to answer to Cummings. To lose a second CofE would look very bad, so Sunaks SPADS may get nominal control by Cummings, but in practice very little.
The other thing is that Cummings agenda is unusual for a UK right winger. It is Cultural and organisational, not economic. He hates the Civil Service in all its forms, and wants to smash what he sees as the Blob. Brexit too is driven by culture war, not economics. Cummings is not bothered by economics, or whether the countries debts are sustainable.
Both Cummings and Sunak have one thing in common. Both were wealthy from the start, but then married into very wealthy families. Neither has ever had to go short personally and never will, as such culturally they are very happy spending money, as there has always been an inexhaustible supply. We will see if that is true of the Treasury...
I think that the real finance implications take a year to hit. The July 31 tax payments have been deferred, and the income tax due on Jan 31 is 11 months of normal income. Corporation tax is also paid 9 months after fin year finishes. Tax reciepts will appear to be OK for some time yet, but will fall off a cliff in 2021, while spending remains very high. We are at the running in the air stage of a Wile E Coyote cartoon.
I guess the question is, does it matter? Everyone everywhere is running huge deficits now. Everyone who can is debasing their fiat currency through money printing to monetise these deficits. And gilt prices evyerwhere are still sky high. At some point orthodoxy says this all feeds through to high inflation. But of what, goods or assets? If I were writing the full budget, I'd equalise capital gains tax with income tax ahead of asset price inflation, just in case gilt yields start spiking beyond the control of our highly interventionist central bank.
The factor largely overlooked through this crisis has been the extent of balance sheet restructuring. From large caps, to SMEs to households. Massive amounts of corporate debt have been refinanced at negative real interest rates and with longer durations. Bye bye debt cliff edge. SMEs have been given a lifeline with often unsuitable very high interest short term debt, refinanced with longer term state guaranteed facilities. As for households, they've been given mortgage holidays and low rates to refinance at, a furlough scheme an order of magnitude more generous than redundancy and in many cases, no reduction in disposable income (or even an increase given commuting costs) but highly reduced avenues to blow that disposable income.
Glass half full says there's no meaningful second wave and we're at the start of a roaring decade. Albeit with as many losers as winners (poor old Pret).
But doesn't a rise in M3, which as you say tends to be inflationary also tend to lead to a hike in interest rates. As we are financing the pandemic by personal borrowing be that from HMRC deferments, which we might have to refinance by a bank loan in January, or from an extension to the mortgage, isn't that sub-optimal?
Ceteris paribus the country is facing massive deflation.
A boost in inflation right now is a good thing, not a bad thing.
Not if you are mortgaged up to the hilt and interest rates rise to 15%. During the Major Government my mortgage IIRC was for a while at around 18%.
Add general inflation to that and we have a heady cocktail of serious debt to deal with.
Part of me thinks Johnson is a lucky politician and the normal economic rules don't apply to him and we can all carry on as normal without consequence. Is that wishful thinking?
We aren't facing 15% interest or 4% inflation rates. We are facing 0.25% interest rates and deflation.
We need to get inflation away from deflation and back up to betweeen 2-3%.
You don't know that. The more money is pumped into the economy the higher the inflation. There are already some supply issues from imported and domestically produced material.
You might be right, but a consumer debt lead recovery can be problematic.
We do know that. What we are facing is deflation not high inflation, we know that from history and we know that from the evidence we have before us.
Yes the actions being taken now lead to "higher" inflation but "higher" than what?
When your inflation rate is 5% then higher inflation is bad. When your inflation rate is 10% then higher inflation is terrible. When your inflation is close to 0% and heading down then higher inflation is a good thing.
What is the inflation rate today?
What we are going through is a catastrophe not seen since the Spanish Flu. What was the inflation rate in the early 1920s in the UK after the Spanish Flu?
It is a long time since I was a student of economics but I could see inflation rising to five percent and interest rates likewise. That is catastrophic if one is already (as many will be) on the limit of their borrowing.
|People said the same on the back of QE after the GFC but in fact interest rates struggled to get over 1% and are now at 0.1%. It may be different this time because it is a different kind of shock but gilt markets indicate that we are going to have very low interest rates for some considerable time to come.
You may be right. However this flies in the face of what I was taught 40 years ago
No it doesn't.
You've got to always consider the baseline. Yes inflation will go up relatively but not all "going up" is created equal.
If inflation goes up by 2% is that good or bad? 40 years ago it would have been considered bad based on what inflation was at the time but our base is different now.
Going up from 5% to 7% is bad Going up from 10% to 12% is terrible Going up from 0% to 2% is good. Going up from -1% to 1% is great.
Not all changes are equal. You need to think about the start point too and our start point is below-target inflation and has been for years and with a deflationary environment.
Um no, going from 5% to 7% would be terrible, going from 10% to 12% would likely be unavoidable if inflation hit 10%. At higher levels of inflation you are likely to see even higher rates before things go lower simply because companies will increases prices early.
Sunak's package will be popular with many, but for the poorest in our society it will go down like a bucket of sick, particularly the measures that are getting the headlines. Indirect benefits to the poor are well hidden, though I'm not denying there may be some. Save£10 a head when you go out to eat? We haven't been able to go to a restaurant for years. Cut in stamp duty? Do me a favour.
I know it's not a popular view on here, but many people are really struggling, and if you rely on food banks or even universal credit there's not a lot for you, unless you are young and a traineeship or apprenticeship comes through.
'Eat out to help out' may also simply postpone a lot of restaurant visits from July to August, for those whom a £10 saving makes a significant difference, so I'm not sure it will be a huge success.
But for most habitual restaurant-goers it's the fear of eating out that needs reducing, not the cost.
Agreed. We are habitual lunchtime restaurant goers and went out for the first time yesterday. Chose an upmarket place on the grounds that we thought they were more likely to be thorough on precautions. None of the staff wearing masks or visors, waitress talking to us 12 inches from our faces when putting the food down. Back to self-catering for us! Cost definitely not the issue
On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.
But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.
Something somewhere is clearly quite wrong with the media narrative on Cummings.
Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.
Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.
Javid resigned over his SPADS having to answer to Cummings. To lose a second CofE would look very bad, so Sunaks SPADS may get nominal control by Cummings, but in practice very little.
The other thing is that Cummings agenda is unusual for a UK right winger. It is Cultural and organisational, not economic. He hates the Civil Service in all its forms, and wants to smash what he sees as the Blob. Brexit too is driven by culture war, not economics. Cummings is not bothered by economics, or whether the countries debts are sustainable.
Both Cummings and Sunak have one thing in common. Both were wealthy from the start, but then married into very wealthy families. Neither has ever had to go short personally and never will, as such culturally they are very happy spending money, as there has always been an inexhaustible supply. We will see if that is true of the Treasury...
I think that the real finance implications take a year to hit. The July 31 tax payments have been deferred, and the income tax due on Jan 31 is 11 months of normal income. Corporation tax is also paid 9 months after fin year finishes. Tax reciepts will appear to be OK for some time yet, but will fall off a cliff in 2021, while spending remains very high. We are at the running in the air stage of a Wile E Coyote cartoon.
I guess the question is, does it matter? Everyone everywhere is running huge deficits now. Everyone who can is debasing their fiat currency through money printing to monetise these deficits. And gilt prices evyerwhere are still sky high. At some point orthodoxy says this all feeds through to high inflation. But of what, goods or assets? If I were writing the full budget, I'd equalise capital gains tax with income tax ahead of asset price inflation, just in case gilt yields start spiking beyond the control of our highly interventionist central bank.
The factor largely overlooked through this crisis has been the extent of balance sheet restructuring. From large caps, to SMEs to households. Massive amounts of corporate debt have been refinanced at negative real interest rates and with longer durations. Bye bye debt cliff edge. SMEs have been given a lifeline with often unsuitable very high interest short term debt, refinanced with longer term state guaranteed facilities. As for households, they've been given mortgage holidays and low rates to refinance at, a furlough scheme an order of magnitude more generous than redundancy and in many cases, no reduction in disposable income (or even an increase given commuting costs) but highly reduced avenues to blow that disposable income.
Glass half full says there's no meaningful second wave and we're at the start of a roaring decade. Albeit with as many losers as winners (poor old Pret).
But doesn't a rise in M3, which as you say tends to be inflationary also tend to lead to a hike in interest rates. As we are financing the pandemic by personal borrowing be that from HMRC deferments, which we might have to refinance by a bank loan in January, or from an extension to the mortgage, isn't that sub-optimal?
Ceteris paribus the country is facing massive deflation.
A boost in inflation right now is a good thing, not a bad thing.
Not if you are mortgaged up to the hilt and interest rates rise to 15%. During the Major Government my mortgage IIRC was for a while at around 18%.
Add general inflation to that and we have a heady cocktail of serious debt to deal with.
Part of me thinks Johnson is a lucky politician and the normal economic rules don't apply to him and we can all carry on as normal without consequence. Is that wishful thinking?
We aren't facing 15% interest or 4% inflation rates. We are facing 0.25% interest rates and deflation.
We need to get inflation away from deflation and back up to betweeen 2-3%.
You don't know that. The more money is pumped into the economy the higher the inflation. There are already some supply issues from imported and domestically produced material.
You might be right, but a consumer debt lead recovery can be problematic.
We do know that. What we are facing is deflation not high inflation, we know that from history and we know that from the evidence we have before us.
Yes the actions being taken now lead to "higher" inflation but "higher" than what?
When your inflation rate is 5% then higher inflation is bad. When your inflation rate is 10% then higher inflation is terrible. When your inflation is close to 0% and heading down then higher inflation is a good thing.
What is the inflation rate today?
What we are going through is a catastrophe not seen since the Spanish Flu. What was the inflation rate in the early 1920s in the UK after the Spanish Flu?
It is a long time since I was a student of economics but I could see inflation rising to five percent and interest rates likewise. That is catastrophic if one is already (as many will be) on the limit of their borrowing.
|People said the same on the back of QE after the GFC but in fact interest rates struggled to get over 1% and are now at 0.1%. It may be different this time because it is a different kind of shock but gilt markets indicate that we are going to have very low interest rates for some considerable time to come.
You may be right. However this flies in the face of what I was taught 40 years ago
No it doesn't.
You've got to always consider the baseline. Yes inflation will go up relatively but not all "going up" is created equal.
If inflation goes up by 2% is that good or bad? 40 years ago it would have been considered bad based on what inflation was at the time but our base is different now.
Going up from 5% to 7% is bad Going up from 10% to 12% is terrible Going up from 0% to 2% is good. Going up from -1% to 1% is great.
Not all changes are equal. You need to think about the start point too and our start point is below-target inflation and has been for years and with a deflationary environment.
Um no, going from 5% to 7% would be terrible, going from 10% to 12% would likely be unavoidable if inflation hit 10%. At higher levels of inflation you are likely to see even higher rates before things go lower simply because companies will increases prices early.
Fair point eek. My point though is we are currently facing deflation and below target - and have been for years. We aren't at the above-inflation starting point.
On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.
But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.
Something somewhere is clearly quite wrong with the media narrative on Cummings.
Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.
Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.
Javid resigned over his SPADS having to answer to Cummings. To lose a second CofE would look very bad, so Sunaks SPADS may get nominal control by Cummings, but in practice very little.
The other thing is that Cummings agenda is unusual for a UK right winger. It is Cultural and organisational, not economic. He hates the Civil Service in all its forms, and wants to smash what he sees as the Blob. Brexit too is driven by culture war, not economics. Cummings is not bothered by economics, or whether the countries debts are sustainable.
Both Cummings and Sunak have one thing in common. Both were wealthy from the start, but then married into very wealthy families. Neither has ever had to go short personally and never will, as such culturally they are very happy spending money, as there has always been an inexhaustible supply. We will see if that is true of the Treasury...
I think that the real finance implications take a year to hit. The July 31 tax payments have been deferred, and the income tax due on Jan 31 is 11 months of normal income. Corporation tax is also paid 9 months after fin year finishes. Tax reciepts will appear to be OK for some time yet, but will fall off a cliff in 2021, while spending remains very high. We are at the running in the air stage of a Wile E Coyote cartoon.
I guess the question is, does it matter? Everyone everywhere is running huge deficits now. Everyone who can is debasing their fiat currency through money printing to monetise these deficits. And gilt prices evyerwhere are still sky high. At some point orthodoxy says this all feeds through to high inflation. But of what, goods or assets? If I were writing the full budget, I'd equalise capital gains tax with income tax ahead of asset price inflation, just in case gilt yields start spiking beyond the control of our highly interventionist central bank.
The factor largely overlooked through this crisis has been the extent of balance sheet restructuring. From large caps, to SMEs to households. Massive amounts of corporate debt have been refinanced at negative real interest rates and with longer durations. Bye bye debt cliff edge. SMEs have been given a lifeline with often unsuitable very high interest short term debt, refinanced with longer term state guaranteed facilities. As for households, they've been given mortgage holidays and low rates to refinance at, a furlough scheme an order of magnitude more generous than redundancy and in many cases, no reduction in disposable income (or even an increase given commuting costs) but highly reduced avenues to blow that disposable income.
Glass half full says there's no meaningful second wave and we're at the start of a roaring decade. Albeit with as many losers as winners (poor old Pret).
But doesn't a rise in M3, which as you say tends to be inflationary also tend to lead to a hike in interest rates. As we are financing the pandemic by personal borrowing be that from HMRC deferments, which we might have to refinance by a bank loan in January, or from an extension to the mortgage, isn't that sub-optimal?
Ceteris paribus the country is facing massive deflation.
A boost in inflation right now is a good thing, not a bad thing.
Not if you are mortgaged up to the hilt and interest rates rise to 15%. During the Major Government my mortgage IIRC was for a while at around 18%.
Add general inflation to that and we have a heady cocktail of serious debt to deal with.
Part of me thinks Johnson is a lucky politician and the normal economic rules don't apply to him and we can all carry on as normal without consequence. Is that wishful thinking?
We aren't facing 15% interest or 4% inflation rates. We are facing 0.25% interest rates and deflation.
We need to get inflation away from deflation and back up to betweeen 2-3%.
You don't know that. The more money is pumped into the economy the higher the inflation. There are already some supply issues from imported and domestically produced material.
You might be right, but a consumer debt lead recovery can be problematic.
We do know that. What we are facing is deflation not high inflation, we know that from history and we know that from the evidence we have before us.
Yes the actions being taken now lead to "higher" inflation but "higher" than what?
When your inflation rate is 5% then higher inflation is bad. When your inflation rate is 10% then higher inflation is terrible. When your inflation is close to 0% and heading down then higher inflation is a good thing.
What is the inflation rate today?
What we are going through is a catastrophe not seen since the Spanish Flu. What was the inflation rate in the early 1920s in the UK after the Spanish Flu?
It is a long time since I was a student of economics but I could see inflation rising to five percent and interest rates likewise. That is catastrophic if one is already (as many will be) on the limit of their borrowing.
|People said the same on the back of QE after the GFC but in fact interest rates struggled to get over 1% and are now at 0.1%. It may be different this time because it is a different kind of shock but gilt markets indicate that we are going to have very low interest rates for some considerable time to come.
You may be right. However this flies in the face of what I was taught 40 years ago
There’s too much money washing around. Interest rates are just the price of money
OT Ladbrokes and Corals (both in the same ownership, of course) seem to have pulled out of Oddschecker.
GVC pulls Ladbrokes, Coral and Betdaq brands from oddschecker
Renewal price could not be reached to showcase operator’s key UK brands on popular pricing grid
Sports betting GVC pulls Ladbrokes, Coral and Betdaq brands from oddschecker Renewal price could not be reached to showcase operator’s key UK brands on popular pricing gridJake Evans08 July 2020EmailPrint Share GVC has surprisingly called time on its deal with oddschecker after deciding to remove its Ladbrokes, Coral and Betdaq brands from the affiliate firm’s pricing grid. GVC’s UK-facing brands will be pulled from 9 July 2020 as EGR understands a price could not be agreed on a renewal between the operator and Flutter Entertainment-owned oddschecker.… https://egr.global/intel/news/gvc-pulls-ladbrokes-coral-and-betdaq-brands-from-oddschecker/ (£££, h-t Betfair forum)
It is now, and quite deliberately by GVC after Oddschecker was acquired by a rival. The only people who will mourn the loss of the site are us punters.
The thing that some people clearly understand about economics and others clearly don't is that it is circulation that matters.
Giving money to struggling businesses/individuals does absolutely nothing for the macro economy whatsoever as they cling on to that cash (and then continue to struggle if they're not getting anything circulated back to them).
What is needed is to get money circulating again. That is why I have been calling for a VAT cut here for months. And I've been laughed at here saying we need tax cuts with replies like "yeah and I'd like a supermodel".
A VAT cut is not the right way to go, however crowd-pleasing it might be in the short term.
First, there is a huge deadweight effect. Most of the purchases would have been made anyway, so all you're doing is cutting prices to individuals. They will save the difference.
Second, depending on the sector, people will often just bring forward future spending, leading to reduced economic growth when you take it away.
Third, there are often surprisingly large administrative costs involved in cutting VAT then raising it again, which is why, when they did it during the financial crisis, a lot of businesses did not even bother cutting their prices.
Fourth, sector-specific cuts lead to reclassifications and other inefficiencies.
Cutting less sexy business taxes, like payroll levies, or increasing capital allowances, gets you much more bang for your buck.
Isn't the point that businesses won't cut their prices and will therefore pocket the difference themselves making the business more viable.
(You could say the same about the stamp duty cut, eventually it gets worked into house-prices and they just go up by the difference - its what happened last time)
In terms of "bringing purchases forward", this is a natural consequence of having inflation of any level in the economy, people buy things now because they will cost more in the future. The alternative, deferring purchases, is worse for the economy and is usually driven by deflation.
The VAT cut is a quick way to save businesses money. The job retention schemes and half price meal system, clunky and unlikely to be terribly effective as it is, are the ways of maintaing consumer spending so that businesses can actually get the revenue in they will be keeping more of.
Targeting it to immediate consumables limits the bringing forward issue
How many people don’t go out for a meal because they went out a month ago? (Budget aside, in which case bringing forward isn’t an issue). The problem is with one time purchases like white goods*
* (it’s a little depressing that I hesitated before using that term for a domestic appliance)
Do suppose we are going to get complaints about "Brown Furniture", as it is the deprecated, devalued, unwanted antiques?
The problem was really introduced when 'black' became the designation for those with darker skin, way back when the ignorami of the middle ages saw their first darker skinned person and said 'black'. Black is the colour of darkness and night - the absence of light. It has always been synonymous with fear, death, unexpected violence etc. for obvious reasons. It shouldn't really be the designation for brown skin, though I completely appreciate there's no going back.
I see where your are coming from, but the other half of the dichotomy is also inaccurate. Most people who are described as "white" would be more accurately described as "pink".
"Melanin-deficient" or "low-melanin" and "high-melanin", might be even more accurate, and linguistically reverse the positive/negative associations.
Yes, you're completely correct. We should no more be called white than black people black. However, the die is now cast.
Sunak was very good on R4 this morning - he really didn't put a foot wrong: he answered the questions, he explained the rationale well, he came over as open-minded and showing empathy, and best of all he didn't try to deny that his policies won't help everyone and will carry a deadweight. This is the kind of realism which used to be the core strength of the Conservative Party.
It's just a pity that the rest of the Cabinet doesn't show any of these characteristics, although the leaked Liz Truss letter suggests that she's at least beginning to get some contact with reality. Unfortunately it's too late to do much about the Dec 31st cliff-edge.
Bloodlet Cummings. BINO trade deal in the Autumn. 80 seat majority, Boris is home and dry.
François, Bone, Bridgen and Philip Davis are seething, but what's not to like about that?
80-seat majority and most of the leading Brexiteers are in the Cabinet and thus bound by collective responsibility to declare BINO as our greatest foreign policy success since Berlin fell.
Johnson could make that work. "Look at my fantastic deal with the EU that saved us from a calamitous WTO Brexit and preserved a million of your jobs. Has there every been a greater Prime Minister than me, Boris Johnson". It would be like hypnosis, the cabinet would all fall into line, because they know they do not want to be associated with "no deal".
Genuinely, Johnson could sell EEA and probably get it through the HoC with little trouble
EEA minus free movement yes, that would also enable us to do our own trade deals, though the hardliners would not be happy it would keep the red wall and respect the regulatory alignment the EU wants for a trade deal.
Full EEA is not an option though as it requires free movement which loses the red wall as ending it was the only reason Labour voters there switched to the Tories last year
The thing that some people clearly understand about economics and others clearly don't is that it is circulation that matters.
Giving money to struggling businesses/individuals does absolutely nothing for the macro economy whatsoever as they cling on to that cash (and then continue to struggle if they're not getting anything circulated back to them).
What is needed is to get money circulating again. That is why I have been calling for a VAT cut here for months. And I've been laughed at here saying we need tax cuts with replies like "yeah and I'd like a supermodel".
Cutting VAT and similar issues on the struggling hospitality sectors will allow money to circulate more in those sectors - and allow businesses to cope with thicker margins on smaller volumes - thus saving the sector from a catastrophe and in the long-term the government will make more tax revenue despite temporarily lower taxes.
Essentially adjusting for the time value of money the peak of the Laffer Curve has temporarily moved far to the left of the graph and the government needs to respond accordingly.
Wasn't there an old song about the circulation of money? The lines "see the money flow, round the Barley Mow" float into my head but Google finds nothing.
Sunak's package will be popular with many, but for the poorest in our society it will go down like a bucket of sick, particularly the measures that are getting the headlines. Indirect benefits to the poor are well hidden, though I'm not denying there may be some. Save£10 a head when you go out to eat? We haven't been able to go to a restaurant for years. Cut in stamp duty? Do me a favour.
I know it's not a popular view on here, but many people are really struggling, and if you rely on food banks or even universal credit there's not a lot for you, unless you are young and a traineeship or apprenticeship comes through.
'Eat out to help out' may also simply postpone a lot of restaurant visits from July to August, for those whom a £10 saving makes a significant difference, so I'm not sure it will be a huge success.
But for most habitual restaurant-goers it's the fear of eating out that needs reducing, not the cost.
Agreed. We are habitual lunchtime restaurant goers and went out for the first time yesterday. Chose an upmarket place on the grounds that we thought they were more likely to be thorough on precautions. None of the staff wearing masks or visors, waitress talking to us 12 inches from our faces when putting the food down. Back to self-catering for us! Cost definitely not the issue
I don't understand your logic that upmarket will be more likely to be thorough on precautions. Bog standard branded chains can probably easier adapt to visors and push it down to all restaurants as a brand standard etc
And reducing the fear will happen as people do go out and find it OK. I've heard from people already who've been to restaurants and the waiters were wearing visors, as that continues and as people go out and have a good meal - or put photos on Facebook - it will encourage friends and family to do the same thing.
And firms that haven't thought through visors etc will quickly be forced to catch up.
On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.
But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.
Something somewhere is clearly quite wrong with the media narrative on Cummings.
Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.
Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.
Javid resigned over his SPADS having to answer to Cummings. To lose a second CofE would look very bad, so Sunaks SPADS may get nominal control by Cummings, but in practice very little.
The other thing is that Cummings agenda is unusual for a UK right winger. It is Cultural and organisational, not economic. He hates the Civil Service in all its forms, and wants to smash what he sees as the Blob. Brexit too is driven by culture war, not economics. Cummings is not bothered by economics, or whether the countries debts are sustainable.
Both Cummings and Sunak have one thing in common. Both were wealthy from the start, but then married into very wealthy families. Neither has ever had to go short personally and never will, as such culturally they are very happy spending money, as there has always been an inexhaustible supply. We will see if that is true of the Treasury...
I think that the real finance implications take a year to hit. The July 31 tax payments have been deferred, and the income tax due on Jan 31 is 11 months of normal income. Corporation tax is also paid 9 months after fin year finishes. Tax reciepts will appear to be OK for some time yet, but will fall off a cliff in 2021, while spending remains very high. We are at the running in the air stage of a Wile E Coyote cartoon.
I guess the question is, does it matter? Everyone everywhere is running huge deficits now. Everyone who can is debasing their fiat currency through money printing to monetise these deficits. And gilt prices evyerwhere are still sky high. At some point orthodoxy says this all feeds through to high inflation. But of what, goods or assets? If I were writing the full budget, I'd equalise capital gains tax with income tax ahead of asset price inflation, just in case gilt yields start spiking beyond the control of our highly interventionist central bank.
The factor largely overlooked through this crisis has been the extent of balance sheet restructuring. From large caps, to SMEs to households. Massive amounts of corporate debt have been refinanced at negative real interest rates and with longer durations. Bye bye debt cliff edge. SMEs have been given a lifeline with often unsuitable very high interest short term debt, refinanced with longer term state guaranteed facilities. As for households, they've been given mortgage holidays and low rates to refinance at, a furlough scheme an order of magnitude more generous than redundancy and in many cases, no reduction in disposable income (or even an increase given commuting costs) but highly reduced avenues to blow that disposable income.
Glass half full says there's no meaningful second wave and we're at the start of a roaring decade. Albeit with as many losers as winners (poor old Pret).
But doesn't a rise in M3, which as you say tends to be inflationary also tend to lead to a hike in interest rates. As we are financing the pandemic by personal borrowing be that from HMRC deferments, which we might have to refinance by a bank loan in January, or from an extension to the mortgage, isn't that sub-optimal?
Ceteris paribus the country is facing massive deflation.
A boost in inflation right now is a good thing, not a bad thing.
Not if you are mortgaged up to the hilt and interest rates rise to 15%. During the Major Government my mortgage IIRC was for a while at around 18%.
Add general inflation to that and we have a heady cocktail of serious debt to deal with.
Part of me thinks Johnson is a lucky politician and the normal economic rules don't apply to him and we can all carry on as normal without consequence. Is that wishful thinking?
We aren't facing 15% interest or 4% inflation rates. We are facing 0.25% interest rates and deflation.
We need to get inflation away from deflation and back up to betweeen 2-3%.
You don't know that. The more money is pumped into the economy the higher the inflation. There are already some supply issues from imported and domestically produced material.
You might be right, but a consumer debt lead recovery can be problematic.
We do know that. What we are facing is deflation not high inflation, we know that from history and we know that from the evidence we have before us.
Yes the actions being taken now lead to "higher" inflation but "higher" than what?
When your inflation rate is 5% then higher inflation is bad. When your inflation rate is 10% then higher inflation is terrible. When your inflation is close to 0% and heading down then higher inflation is a good thing.
What is the inflation rate today?
What we are going through is a catastrophe not seen since the Spanish Flu. What was the inflation rate in the early 1920s in the UK after the Spanish Flu?
It is a long time since I was a student of economics but I could see inflation rising to five percent and interest rates likewise. That is catastrophic if one is already (as many will be) on the limit of their borrowing.
|People said the same on the back of QE after the GFC but in fact interest rates struggled to get over 1% and are now at 0.1%. It may be different this time because it is a different kind of shock but gilt markets indicate that we are going to have very low interest rates for some considerable time to come.
We’ve had massive asset price inflation.
That’s created real issues for the economy but most people haven’t noticed it because they don’t buy houses very often
Everyone under 40 has noticed it! Hence their flirtation with Corbynism. I accept most have not made the direct link with QE or socialism for the rich as I like to think of it.
That’s what I meant - everyone has noticed house prices but haven’t connected it to the systemic problem
The lengths to which people will go to avoid doing anything to actually improve the material conditions of minorities.
This is a reasonable change to make. Its harmless and getting out of the habit of subconsciously referring "white as good, black as bad" is a good thing.
The thing that some people clearly understand about economics and others clearly don't is that it is circulation that matters.
Giving money to struggling businesses/individuals does absolutely nothing for the macro economy whatsoever as they cling on to that cash (and then continue to struggle if they're not getting anything circulated back to them).
What is needed is to get money circulating again. That is why I have been calling for a VAT cut here for months. And I've been laughed at here saying we need tax cuts with replies like "yeah and I'd like a supermodel".
Cutting VAT and similar issues on the struggling hospitality sectors will allow money to circulate more in those sectors - and allow businesses to cope with thicker margins on smaller volumes - thus saving the sector from a catastrophe and in the long-term the government will make more tax revenue despite temporarily lower taxes.
Essentially adjusting for the time value of money the peak of the Laffer Curve has temporarily moved far to the left of the graph and the government needs to respond accordingly.
Wasn't there an old song about the circulation of money? The lines "see the money flow, round the Barley Mow" float into my head but Google finds nothing.
The thing that some people clearly understand about economics and others clearly don't is that it is circulation that matters.
Giving money to struggling businesses/individuals does absolutely nothing for the macro economy whatsoever as they cling on to that cash (and then continue to struggle if they're not getting anything circulated back to them).
What is needed is to get money circulating again. That is why I have been calling for a VAT cut here for months. And I've been laughed at here saying we need tax cuts with replies like "yeah and I'd like a supermodel".
Cutting VAT and similar issues on the struggling hospitality sectors will allow money to circulate more in those sectors - and allow businesses to cope with thicker margins on smaller volumes - thus saving the sector from a catastrophe and in the long-term the government will make more tax revenue despite temporarily lower taxes.
Essentially adjusting for the time value of money the peak of the Laffer Curve has temporarily moved far to the left of the graph and the government needs to respond accordingly.
Wasn't there an old song about the circulation of money? The lines "see the money flow, round the Barley Mow" float into my head but Google finds nothing.
The thing that some people clearly understand about economics and others clearly don't is that it is circulation that matters.
Giving money to struggling businesses/individuals does absolutely nothing for the macro economy whatsoever as they cling on to that cash (and then continue to struggle if they're not getting anything circulated back to them).
What is needed is to get money circulating again. That is why I have been calling for a VAT cut here for months. And I've been laughed at here saying we need tax cuts with replies like "yeah and I'd like a supermodel".
Cutting VAT and similar issues on the struggling hospitality sectors will allow money to circulate more in those sectors - and allow businesses to cope with thicker margins on smaller volumes - thus saving the sector from a catastrophe and in the long-term the government will make more tax revenue despite temporarily lower taxes.
Essentially adjusting for the time value of money the peak of the Laffer Curve has temporarily moved far to the left of the graph and the government needs to respond accordingly.
I was taught years ago by an accountant when starting up a business for the first time: Cashflow is the lifeblood of a business. It's great to be profitable, and you need that in the long term, but it doesn't matter how profitable you are if your cashflow dries up. Your business can die overnight if that happens.
I was pleasantly surprised to hear both Sunak and his interviewer use the term deadweight loss.
The furlough scheme was/is great and has saved us from mass unemployment. But the job retention thing is dreadfully inefficient. The youth job placement looks similar to other failed apprenticeship ideas to me. The cheap meals out might be a good idea, but subsidising eating out is a pretty strange incentive to put in place.
Dogs that didn't bark: universities and adult education? Now is a great time for govt to be getting people back into study, either university or adult education. Aviation? No idea what can help them tbh.
By all means fund the study he mentions. But I don't know that it will make much difference in terms of persuading people to fly.
For one thing, people may not believe the results. For another, people travelling to other countries is going to be discouraged through quarantine, self-isolation and the like.
The reasons people want to fly are also reduced. Weddings and events have been cancelled etc.
Anecdata from group of friends who used to spend their lives on planes:
No-one is going on a plane now unless they really need to travel for personal reasons. Business is mostly been done remotely and couriers are keeping busy shipping documents around for signatures.
Those that really have to fly are trying to find the smallest possible plane, even if it means chartering one themselves.
Airlines are shooting themselves in the foot by not blocking middle seats in Economy - that's the biggest single change people want to see, and they're prepared to pay quite a lot extra not to be sitting right next to a stranger.
Last year I think I did 90 flights - this year it's likely to be a maximum of 2 (and that's only because I have a €400 flight voucher to spend and 2 free nights booked in the Inter Continental Amstel).
My Scandi clients are pressing me to fly out and meet with them in person. They want to start doing board meetings F2F again
Comments
Of course politicians noticed that it became a free hit and it was inevitable that QE would be one of the first tools out of the box this time around. It is possible that we again have deflationary trends caused by a collapse in demand, much reduced earnings and a sharp rise in unemployment but it is equally possible that a lot of people have done rather well out of the lockdown and have money to burn.
Politicians are a selfish and short sighted breed and sooner or later we are going to use QE in unsuitable circumstances with disastrous consequences. Pandora's box is wide open. But we just might get away with it this time.
It's just a pity that the rest of the Cabinet doesn't show any of these characteristics, although the leaked Liz Truss letter suggests that she's at least beginning to get some contact with reality. Unfortunately it's too late to do much about the Dec 31st cliff-edge.
He works for the government, not the other way around.
Also perhaps people still on furlough who are bored?
The car park is filling up very much, and the shops seem to be ramping back up, according to the couple I asked, with high average transactions per customer. The place is approx 6m+ visitors a year.
Costs would be £15-30 a head plus drinks so the £10 would make a difference. Similarly at more attractive local pubs.
I wonder if anyone will be able to identify it as a Corona surcharge, as the reduced capacity is visible as an explicit cost?
No view on if thats the case but the two statements are in no way inconsistent.
It is a very blunt tool but I accept that finding a way to target it more effectively would have been difficult.
François, Bone, Bridgen and Philip Davis are seething, but what's not to like about that?
And without getting all global emergency about it, a major reduction in flights is almost certainly a good thing.
Suicide is something that doesn't get discussed in these parts, it's un-islamic, but fair to say some of the younger cabin crew especially joined up to fly around the world and party non-stop, not to spend a few months in a small apartment.
It's difficult to establish a ground truth IFR as you've got lots of moving factors including treatment improving, testing criteria and hospital capacity and treatment of milder cases so they don't progress.
Good. Not doing anything is a decision too.
(Very rough numbers, if there's 9m on furlough, then the £9bn cost of the scheme is the same as 1m people each paid out £9k in benefits over a year if they lose their jobs).
*A farcical name for a gang of oligarchs. Brutus was apparently worried that Caesar was going to put a crimp on his extortion business.
Lol, this is the leak!
Specifically his job to write this letter! Paranoia about the civil service leaking runs strong.
The question is how deep & long?
So why were the BBC trying to sell it as if they had some massive scoop?
https://twitter.com/FraserNelson/status/1281158449724887040?s=20
Having been involved in the delivery of funded apprenticeships previously, the added value, both in terms of learning and for career progression can be patchy. Although targeted investment in education and training makes much more sense to me than McDonalds vouchers.
* Though TBF "gang of oligarchs" is probably a defensible description.
"To be eligible, employees will need to:
earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January
have been furloughed by you at any point and legitimately claimed for under the Coronavirus Job Retention Scheme
have been continuously employed by you up until at least 31 January 2021."
"Melanin-deficient" or "low-melanin" and "high-melanin", might be even more accurate, and linguistically reverse the positive/negative associations.
Renewal price could not be reached to showcase operator’s key UK brands on popular pricing grid
Sports betting
GVC pulls Ladbrokes, Coral and Betdaq brands from oddschecker
Renewal price could not be reached to showcase operator’s key UK brands on popular pricing gridJake Evans08 July 2020EmailPrint Share
GVC has surprisingly called time on its deal with oddschecker after deciding to remove its Ladbrokes, Coral and Betdaq brands from the affiliate firm’s pricing grid. GVC’s UK-facing brands will be pulled from 9 July 2020 as EGR understands a price could not be agreed on a renewal between the operator and Flutter Entertainment-owned oddschecker.…
https://egr.global/intel/news/gvc-pulls-ladbrokes-coral-and-betdaq-brands-from-oddschecker/ (£££, h-t Betfair forum)
Oddschecker is now owned by Flutter who own Skybet, Paddy Power and Betfair.
https://www.flutter.com/our-business/our-brands
They never claimed the fact of the letter was a scoop
https://twitter.com/rachaelvenables/status/1281163028482924550?s=20
Didn't a couple of "serious contenders" step back to let her challenge initially on that logic?
Just at the time there's both a comet and a test match on...
Nice.
% of care home deaths out of total deaths in a country
The easiest way to make that % the lowest is to have lots of deaths outside of care homes, which is what has happened here! It is not a sign of success in any way.
You've got to always consider the baseline. Yes inflation will go up relatively but not all "going up" is created equal.
If inflation goes up by 2% is that good or bad? 40 years ago it would have been considered bad based on what inflation was at the time but our base is different now.
Going up from 5% to 7% is bad
Going up from 10% to 12% is terrible
Going up from 0% to 2% is good.
Going up from -1% to 1% is great.
Not all changes are equal. You need to think about the start point too and our start point is below-target inflation and has been for years and with a deflationary environment.
Full EEA is not an option though as it requires free movement which loses the red wall as ending it was the only reason Labour voters there switched to the Tories last year
And reducing the fear will happen as people do go out and find it OK. I've heard from people already who've been to restaurants and the waiters were wearing visors, as that continues and as people go out and have a good meal - or put photos on Facebook - it will encourage friends and family to do the same thing.
And firms that haven't thought through visors etc will quickly be forced to catch up.
Cash is king
https://twitter.com/GavinFreeguard/status/1281159458572378112