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The least bad solution to April’s £17.2 billion energy price problem – short term subsidies and long term investment
January 17, 2022

As the old joke goes, if I was going there I wouldn’t be starting from here. But the starting point for dealing with high energy prices is that we ARE here. The crux of the problem is that the government has underinvested in domestic energy security. It has made fossil fuel investment difficult without creating

Will the supply chain crisis be over quicker than we thought?
January 10, 2022

In the summer of last year, hopes were riding high that the global economy could quickly return to pre-pandemic levels of output due to the success of the vaccine roll-out and economies gradually opening up again. However, the economic recovery thus far has been marred by stretched supply chains, clogged up ports and sky-high freight costs,

Growth should be fairly strong, stock markets weak. But fighting inflation will be a dominant policy theme of ‘22, while managing the consequences of environmental policy will make this more difficult in the short term
January 1, 2022

After such a frenetic year, I was quite surprised to read what we had predicted a year ago and realise that we had correctly forecast quite a lot of what happened. Our world economy GDP forecast was within 0.2% which is as close to spot on as you can reasonably expect. Our warning about inflation was

We should probably be revising down our forecasts for 2022 even before we have made some of them!
December 19, 2021

Occasionally you get a week where the news is sufficiently unexpected to revise one’s appreciation of events. The past week has been such. The new news included: a rapid upsurge in Covid cases in the UK, especially from the Omicron variant against a background of increasing travel and other restrictions around the world; a tightening

Work from home guidance under Plan B to cause £500 million reduction in monthly urban spending across five of England’s largest cities, while Christmas party cancellations and travel restrictions could cost a further £1.3 billion across the country
December 9, 2021

Last night’s announcement by the Prime Minister that England would move into Plan B over the next week – mandating mask wearing in indoor settings, guidance to work from home (WFH), and vaccine passports for crowded and large venues – doesn’t come without economic costs. Most significantly among the new restrictions, a shift to homeworking

Turns out that US inflation isn’t transitory – watch out for rate rises
December 6, 2021

Fed Governor Jerome Powell showed himself to be an impressive operator in his testimony to Congress last week. In his previous testimony on 28 September, he insisted that inflation would fall back to 2%. His 30 November testimony said that it was time to ‘retire the word transitory’ from discussions of inflationary prospects. Markets immediately

Could the Great Resignation kick off an inflationary spiral?
November 29, 2021

4.4 million people quit their job in the US this September providing yet further evidence of the ongoing Great Resignation phenomenon. The quits rate – the number of voluntary separations as a share of total employment – rose to 3.0% in the same month, the highest since the start of the data series in December

Why did the authorities get economic policy so right on Covid but are behind the curve on inflation?
November 22, 2021

The labour market data out in the past week highlighted two facets of official policy: The early post-furlough employment data showed that employment had bounced back with 160,000 more workers added to company payrolls during October. The unemployment rate for the three months to September (when furlough still existed but when its impact on the labour

If COP 26 manages to tap into the potential of the private sector, the conference might achieve more than the sceptics predict
November 6, 2021

Four hundred private jets, an 85 car motorcade with President Biden, two of the one hundred Zimbabwean delegates pictured coming out of Costco laden with trolleys full of expensive liquor. It’s easy to be sceptical about COP26. From our few days spent in Glasgow, the great jamboree has certainly lived up to expectations with overpriced

Will the expected rate rise on Thursday cause an asset price correction?
November 1, 2021

One of the surprises of the Budget was the rise in the Office for Budget Responsibility’s inflation forecast for 2022 to 4% (average across the year) despite frozen fuel duties and a squeeze on some alcohol duties. The figure is in line with Cebr forecasts but until recently officials in both Whitehall and Threadneedle Street

If inflation subsides in 2023, this Budget will look like a masterstroke worth celebrating with English sparkling wine. Otherwise it is another tax and spend budget…
October 27, 2021

Rishi Sunak is an ambitious man who hopes to be the next Prime Minister. His Budget today is an attempt to steer a course between the prejudices of his boss, Prime Minister Boris Johnson, and those of his Department, the Treasury. The essence of Borisism is that the fundamental law of economic gravity, that you

There is a way out of the Chancellor’s fiscal dilemma. But to find it, he has to be brave.
October 25, 2021

Though his popularity has tumbled in the last year as he has faced the hard choices demanded by the economy, more people still think Rishi Sunak is doing a good job than think he is doing a bad job, according to YouGov’s monthly survey. But he is now facing multiple challenges as he prepares his

Interest rates: To raise or not to raise?
October 20, 2021

An article by Douglas McWilliams for Reaction There is one subject on which both the hawks and doves who disagree over interest rates do agree on: that the Bank of England is making a horlicks of its communications with the outside world, and more pertinently, the financial markets. Over the last week we have heard

Fuel crisis. We think it’s all over – or at least by the beginning of next week
October 9, 2021

The fuel crisis has been plaguing the country for the better part of the past two weeks, leading to hour-long queues at forecourts and frustration among motorists. Triggered by the closure of only a handful of gas stations on 23rd September, the crisis has quickly escalated, as drivers rushed to fill up their tanks. Whilst pressures

The economic impact of the UK’s New Approach Methodologies sector – A Cebr Report for Animal Free Research UK
October 6, 2021

View the full report here. Executive Summary Report overview This is a Cebr report for Animal Free Research UK, assessing the economic contributions made by New Approach Methodologies (NAMs) in the UK. The report considers the direct economic contributions made by the UK NAMs sector during 2017-2019 as well as a forecast of its projected

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