Macroeconomics: UK economy Pre-U Economics
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Macroeconomics: UK economy Pre-U Economics
A brief overview of relevant articles for Pre-U economists relating to the UK economy
Curated by Graham Watson
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HS2 will cost 'five times more than French line' 

HS2 will cost 'five times more than French line'  | Macroeconomics: UK economy Pre-U Economics | Scoop.it
The controversial High Speed 2 rail link is five times more expensive than a similar line being built in France, according to a new report which has sparked fresh fears about the investment required for the project.
Graham Watson's insight:

An infrastructure project over budget? Scarcely credible - much as the claims of the article are. One would imagine the Tours-Bordeaux route to be fairly flat, whereas the UK route might involve the odd hill. But even more cash...


Are railways modern day pirates? Crikey, a Div task right there...

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Number of UK 'Neets' increases for second consecutive quarter

Number of UK 'Neets' increases for second consecutive quarter | Macroeconomics: UK economy Pre-U Economics | Scoop.it
Proportion of young people not in education, employment or training jumps to 12%, but total is down over five years
Graham Watson's insight:

H used to be a member of top pop act "Steps". But to my mind, it stands for hysteresis, which is the erosion of human capital among the long-term unemployed, such that potential output grows at a slower rate than before. Or words to that effect.


This article highlights a rise on the number of NEETs, and, north of the Borders, the number of NEDS too, I suspect. And I'm not looking for Atomic Dustbins either. Nor bassists.

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Treasury warns of 'Brexit pension hit' - BBC News

Treasury warns of 'Brexit pension hit' - BBC News | Macroeconomics: UK economy Pre-U Economics | Scoop.it
The Treasury is warning that millions of current and future pensioners will be worse off if the UK leaves the European Union.
Graham Watson's insight:

It's rare that I take the views of the Leave camp on board, but this latest sally in the Brexit debate is remarkable. Is next week, the week for "your children's children" to be worse off?


David Beckham's view may swing it! I kid you not...

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Brexit will make us richer. That's why Leave could still win

Brexit will make us richer. That's why Leave could still win | Macroeconomics: UK economy Pre-U Economics | Scoop.it
It is far from over for the Leave side. The received wisdom in Westminster is that the outers are all but finished, and that the only question now is how badly they will be thrashed. That’s nonsense. With four weeks left, and the Government now banned from deluging us with its taxpayer-financed propaganda under the purdah rules, anything remains possible. 
Graham Watson's insight:

Allister Heath continues to beat the Vote Leave drum, arguing that there are many reasons as to why the economic debate hasn't been lost as many people surmise.


Economics, or politics? I leave it to you.

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WTO head says leaving EU would cost UK consumers £9bn a year

WTO head says leaving EU would cost UK consumers £9bn a year | Macroeconomics: UK economy Pre-U Economics | Scoop.it
Roberto Azevedo says Britain would be forced to renegotiate trade deals in move akin to joining WTO from scratch
Graham Watson's insight:
It's been international organisation week in the Brexit debate: first, the IMF, now the WTO have weighed in, suggesting that should Britain choose to leave the EU, it will have to renegotiate its trade deals with all of the WTO's 161 members. If this were true, then the represents a considerable cost. I might have to think about changing professions - I'm sure there would be plenty of demand for cogent economists in the midst of all of this.
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Shell to cut another 2,200 jobs - BBC News

Shell to cut another 2,200 jobs - BBC News | Macroeconomics: UK economy Pre-U Economics | Scoop.it
Royal Dutch Shell is to cut at least another 2,200 jobs, in addition to 10,000 announced earlier this year.
Graham Watson's insight:
The decision by Shell to cut jobs - including 475 in the UK and Eire is likely to trigger a negative multiplier effect in those parts of the UK affected by the closures. In part, this 'rationalisation' is a direct response to the group's merger with BG Group.
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More youngsters shut out of work or training, study finds

More youngsters shut out of work or training, study finds | Macroeconomics: UK economy Pre-U Economics | Scoop.it
Long-term analysis says official statistics underplay larger proportion of young people shut out of work, education and training
Graham Watson's insight:

This article highlights but doesn't specifically mention the 'h' word: hysteresis. However, it does spell out the consequences of long-term unemployment for the young.


Youth unemployment represents a major problem: it reduces the stock of human capital, can contribute to significant wage scarring effects and increases economic inactivity.

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EU exit could add two years to austerity, IFS says - BBC News

EU exit could add two years to austerity, IFS says - BBC News | Macroeconomics: UK economy Pre-U Economics | Scoop.it
The Institute for Fiscal Studies says leaving the EU could lead to more austerity - but Vote Leave calls the think tank "a propaganda arm" of Brussels.
Graham Watson's insight:
More Brexit. Yawn.
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Brexit would damage important trade links with Asia 

Brexit would damage important trade links with Asia  | Macroeconomics: UK economy Pre-U Economics | Scoop.it
With one month to go until the vote on the European referendum, the UK’s fraught relationship with the EU is being put to the test. But this is a two way relationship that will have repercussions all over the world.
Graham Watson's insight:
Amusingly, the Telegraph hides this rather interesting pro-Remain article away on its website; it's much more interesting about Britain's place in the world and the Brexit vote than most of the material they've published in the last fortnight.
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George Osborne, the really unfortunate chancellor

George Osborne, the really unfortunate chancellor | Macroeconomics: UK economy Pre-U Economics | Scoop.it
Like some of his predecessors, Osborne has to cope with a trade deficit and budget deficit at the same time
Graham Watson's insight:
This Larry Elliott article is a must-read. It's his take on the current macroeconomic environment and the implications of this for the Chancellor. He's not all that kind, which won't surprise many. 
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Food prices falling faster than official figures show

Food prices falling faster than official figures show | Macroeconomics: UK economy Pre-U Economics | Scoop.it
Official CPI figures for the price of food and drink are vastly different from those unearthed by an ONS project which ‘scrapes’ supermarket website price data
Graham Watson's insight:
The Guardian appears to have monopoly on interesting stories today: this article suggests that there are some grounds for questioning whether CPI data is accurate in relation to food prices. However, the study concerned may well have some methodological limitations.
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Brexit forecasts can be wrong, it doesn't mean they are pointless - BBC News

Brexit forecasts can be wrong, it doesn't mean they are pointless - BBC News | Macroeconomics: UK economy Pre-U Economics | Scoop.it
The latest Treasury analysis of the "short-term" economic impact of the UK leaving the EU is based on a well-tested economic model.
Graham Watson's insight:
Kamal Ahmed runs the rule over the latest Treasury data regarding Brexit and concludes that despite the protestations of the Leave campaign, this sort of analysis is among the most robust attempts to quantify the effects of Brexit and has a place as part of the debate.
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EU referendum: Brexit 'would spark year-long recession' - Treasury - BBC News

EU referendum: Brexit 'would spark year-long recession' - Treasury - BBC News | Macroeconomics: UK economy Pre-U Economics | Scoop.it
George Osborne's Treasury says leaving the EU would tip the UK into recession, but Boris Johnson says the study is "more propaganda".
Graham Watson's insight:

Only five weeks of this left: it will seem like more than that.


Today's Brexit news relates to a Treasury report that suggests that Brexit will trigger a recession, plagues of locusts, the death of the first born and so on. I could just have made some of that up, but I'm sure that similar claims will be made in the next month or so.

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UK GDP growth – beware the march of the spenders

UK GDP growth – beware the march of the spenders | Macroeconomics: UK economy Pre-U Economics | Scoop.it
George Osborne once pledged a balanced economy, with growth based on a march of the makers but instead a shocking imbalance of payments looms
Graham Watson's insight:

The flawed premise in this article is that Larry Elliott appears to think that the Chancellor has ever meant anything he's actually said. Or rather, he'd like to create that impression.


All I will say is: Long-Term Economic Plan, March of the Makers and nice house in Rainow, Chancellor...  

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North Sea receipts hit record low - BBC News

North Sea receipts hit record low - BBC News | Macroeconomics: UK economy Pre-U Economics | Scoop.it
The UK government makes a loss from North Sea oil and gas production for the first time since records began nearly 50 years ago.
Graham Watson's insight:

This article is odd: it hints at the negative multiplier effects of low North Sea oil receipts but also at the remarkable resilience of the sector. I suspect that although times have been tough, in the long-run, recent events have made the UK oil industry more resilient. Not that this is any satisfaction to oil workers currently unemployed.

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UK growth relies on consumer spending as trade drags on recovery and business investment drops

UK growth relies on consumer spending as trade drags on recovery and business investment drops | Macroeconomics: UK economy Pre-U Economics | Scoop.it
Consumer spending fuelled UK growth in the first three months of the year as business investment fell and trade dragged on the recovery. 
Graham Watson's insight:

What a surprise! UK growth is currently predicated upon consumption - is there any time in the last 30 to 40 years when this hasn't been true. In many senses, it makes for depressing reading in that it seems that we've made few structural changes in the recent past, nor do we seem inclined to, going forward.


This has slightly worrying implications for our future macroeconomic health, not least because of low levels of investment - another entrenched problem - and the current account position.

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The case against negative interest rates

The case against negative interest rates | Macroeconomics: UK economy Pre-U Economics | Scoop.it
The only way to ensure that ‘new money’ is put into circulation is to have the government spend it on building houses and upgrading infrastructure
Graham Watson's insight:
I often live my life by asking what would Keynes do - at least, in an economic if not a personal sense - and in this case Robert Skidelsky does the same, asking what Keynes would make of negative interest rates. His conclusion is that, unsurprisingly, Keynes believed that there were many limitations to what could be achieved by monetary policy and that, instead of helicopter drops, the government should spend the money, removing the possibility that newly enriched consumers would simply save rather than consume.
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What is the real cost of UK's EU membership? BBC News

One thing the campaigns disagree on is the real cost of our membership. So how much money do we put in and how much of it do we get back? I've been taking a closer look at some of the latest figures from the Treasury to try to get to the bottom of it.
Graham Watson's insight:
Crikey! Charlie Stayt - of all people - engages in some serious journalism and tries to explain the true cost of UK membership of the EU. It looks at those areas where the UK gets money back from the EU; personally, I'd be happier if Naga Munchetty had covered the story...
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Fracking wins battle in Yorkshire but not the war | Damian Carrington

Fracking wins battle in Yorkshire but not the war | Damian Carrington | Macroeconomics: UK economy Pre-U Economics | Scoop.it
Damian Carrington: For those backing fracking, the approval of exploration plans at Kirby Misperton is a vital victory, but they are fighting growing public opposition
Graham Watson's insight:
The Guardian nails its colours to the mast: it's anti-fracking, apparently...
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British property market has peaked, estate agency boss says

British property market has peaked, estate agency boss says | Macroeconomics: UK economy Pre-U Economics | Scoop.it
Sellers will have to cut prices to find buyers, says Paul Smith, whose company operates Haart, Felicity J Lord and others
Graham Watson's insight:

It's always interesting when a major player in a market makes pronouncements such as this. However, I've 'scooped' this as a 'bookmark': will his prophecy come true? And what are the macroeconomic implications of it?


It implies that there might be a reduction in household wealth and this may have adverse economic consequences. However, simultaneously, it might make housing more affordable and this might be a good thing.  

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Fracking decision in North Yorkshire reignites intense debate - BBC News

Fracking decision in North Yorkshire reignites intense debate - BBC News | Macroeconomics: UK economy Pre-U Economics | Scoop.it
Approval for fracking in North Yorkshire raises the prospect of the controversial technique being allowed at other sites and restarts an intense debate.
Graham Watson's insight:
Not sure I'd start a fracking story with a headline using the word "reignite" but this looks at the possibility that approval in North Yorkshire means that other schemes will also be given the green light. There are arguments both for and against: any half-decent economist should be able to identify and evaluate them.
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Foreign investors rush to Britain - but EU referendum uncertainty helps drive largest ever decline in overseas perceptions of UK

Foreign investors rush to Britain - but EU referendum uncertainty helps drive largest ever decline in overseas perceptions of UK | Macroeconomics: UK economy Pre-U Economics | Scoop.it

Britain attracted record levels of foreign direct investment last year but uncertainty over its future in the EU has put its status as a top investment destination at risk, research shows.

Graham Watson's insight:
Britain remains Europe's largest recipient of FDI but doubts over Brexit might jeopardise that position according to the Telegraph.
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George Osborne's post-Brexit economy is a fantasy land

George Osborne's post-Brexit economy is a fantasy land | Macroeconomics: UK economy Pre-U Economics | Scoop.it
UK chancellor’s dire warnings are based on worst-case scenarios modelled on best guesses. They are economically flawed but politically powerful
Graham Watson's insight:
Contrary to Kamal Ahmed, the Guardian's Katie Allen suggests that the latest Treasury report into Brexit is - to quote Professor Yaffle "fiddlesticks and flapdoodle"...
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Brexit Treasury analysis explained | FT World

The FT’s Chris Giles explains the UK Treasury’s Brexit analysis focusing on four points: scale, uncertainty, circularity and convenience.
Graham Watson's insight:
The FT looks at the Treasury's assessment of the impact of Brexit and deconstructs the data with regard to a number of criteria. However, it suggests that the scale of any future recession is likely to be relatively small, although it doesn't doubt that the likely effects are bad.
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Treasury says Brexit would plunge UK into recession - BBC News

Treasury says Brexit would plunge UK into recession - BBC News | Macroeconomics: UK economy Pre-U Economics | Scoop.it
Leaving the European Union would tip the UK into a year-long recession, with up to 820,000 jobs lost within two years, Chancellor George Osborne has claimed.
Graham Watson's insight:
The accompanying AV clip. Watch it if you can bear it.
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