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Impact of sanctions and the weak ruble on the Russian standard of living
March 18, 2022

Introduction One issue affecting the effectiveness of sanctions and the corresponding response in the currency and other markets is how they affect Russian living standards. This short note models one scenario to get a sense of how quickly the combination of sanctions, rising commodity prices and the fall in the ruble will affect Russian living

Invasion of Ukraine, rising commodity and oil prices and sanctions likely to have major impact on economy
March 8, 2022

Read the full report Russia’s invasion of Ukraine is likely to have a large effect on the UK economy. The scale of this effect is likely to be in the mind of Chancellor of the Exchequer Rishi Sunak when he releases his Spring Forecast Statement on 23 March 2022. We have run our estimated impact

Financial sanctions set to cause a 14% hit to Russian GDP by 2023 if the West can stomach the costs of throttling energy exports
March 4, 2022

The geopolitical impact of Russia’s unprovoked act of war against Ukraine is hard to overstate and the international response has reflected that. European countries have rushed to re-evaluate their energy and security situation with respect to Russia. And the wider international community has agreed on a sanctions package that is unique in its breadth and

Stealth tax bombshell – freezing of allowances and unexpected inflation mean £40 billion of unexpected revenue and a doubling of the number on higher rate tax
February 20, 2022

The UK Treasury has a number of institutional biases (what other people call prejudices). They tend to disbelieve any evidence that tax cuts cause growth, no matter how respected the study. Their forecasting record might euphemistically be described as patchy and their offspring – the Office of Budget Responsibility – seems to have inherited this

Governments throughout Europe are betting on energy prices falling by the second half of next year
February 14, 2022

Annual inflation in the Eurozone hit 5.1% in January, with by far the largest driver of rising prices being energy. Energy inflation stood at 29% – the highest figure on record [1]. Clearly, the UK is not alone in its struggle with rising costs of living. Indeed, Cebr estimates that, without government intervention, energy prices

Cost to Ukraine of Conflict with Russia
February 10, 2022

Download the full report here. The conflict with Russia has cost Ukraine US$280 billion between 2014 and 2020 according to report by Cebr New analysis by Cebr shows that Ukraine’s lost output between 2014 – 2020 attributable to the conflict with Russia totals US$280 billion, or up to US$40 billion a year, 19.9% of Ukraine’s

You can’t even out regional disparities without the entrepreneurial and creative fillip of immigration!
February 7, 2022

Displaying its policy wonk origins, Michael Gove’s long-awaited white paper on Levelling up the United Kingdom and one of the government’s flagship policies, is full of historical analogies and quotes.  The 322-page epic starts with a tour d’horizon going back 7,000 years, the middle part is a detailed analysis of productivity differentials between regions, somewhat

Employers who cannot offer a 4-day working week may soon find that they have to pay a salary premium to attract the best staff
January 31, 2022

This month saw the launch of a six-month-long pilot scheme in the UK, in which 30 companies are set to experiment with a four-day working week. Under the scheme, which will run alongside other pilots in at least five other countries, workers’ hours will be reduced by a fifth with no loss of pay. However, whilst

Self-employment set to tumble by more than 800,000 as new hybrid working practices offer the same rewards, with fewer risks
January 24, 2022

In Q4 2019, just before the onset of the pandemic, the UK was home to 5.0 million self-employed people. The number had been on an upward path over the past two decades, both in absolute terms and as a share of all those in employment. Between 2000 and 2019 the number of self-employed had increased

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

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