Macroeconomics: UK economy, IB Economics
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Macroeconomics: UK economy, IB Economics
A brief overview of relevant articles for IB, A-Level and Pre-U economists relating to the UK economy
Curated by Graham Watson
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More long-term thinking is needed to protect the UK economy | Business | The Guardian

More long-term thinking is needed to protect the UK economy | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
Stop-start policies are harming UK plc and the fight against Covid-19. Rishi Sunak needs to plan ahead now
Graham Watsons insight:

A little look at the dangers of policymaking, and whilst I can see what the author is getting at, I'm not sure that the present circumstances make the task easy, or, give the Chancellor much of an opportunity to play the long game. 

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Ending VAT-free shopping 'will hit UK tourism and retail'

Ending VAT-free shopping 'will hit UK tourism and retail' | Macroeconomics: UK economy, IB Economics | Scoop.it
Plan to end VAT-free shopping for international visitors could cost 70,000 jobs, say retail and travel firms.
Graham Watsons insight:

Another hidden cost of Brexit - the end of VAT-free shopping for international visitors could cost around 70,000 jobs according to retail and travel firms. 

 

Well, they would say that wouldn't they...

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Covid-hit high streets in England to benefit from £95m fund | Retail industry | The Guardian

Covid-hit high streets in England to benefit from £95m fund | Retail industry | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
Disused buildings could be turned into homes, shops and offices in 68 locations
Graham Watsons insight:

State aid for the High Street, who'd have thought it? 

 

However, it seems that the government is preparing to offer the retail sector some succour. 

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Lithium find in Cornwall spurs hopes of regeneration | Business | The Guardian

Lithium find in Cornwall spurs hopes of regeneration | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
Discovery of high-grade metal used for electric car batteries ‘could be enough to meet total future UK demand’
Graham Watsons insight:

Good news for one of the most depressed parts of England, with the discovery of lithium reserves in Cornwall. A positive supply-side shock, a boost to the nation's supply-side, and a positive regional multiplier. What's not to like? 

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Governments should avoid Covid spending cuts and tax rises, says OECD | Business | The Guardian

Governments should avoid Covid spending cuts and tax rises, says OECD | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
In report on global economy, thinktank suggests extra borrowing is needed into 2021
Graham Watsons insight:

Interesting policy announcment by the OECD: governments should avoid spending cuts and tax rises as they look to recover from the coronavirus pandemic. 

 

For Year 13 students in the second year of their course, this should be relatively straightforward to explain, in terms of AD-AS analysis, and it might be a good time to reflect upon the nature of austerity and whether or not it was an appropriate policy after the global financial crisis.

 

For Year 12 students, it might be a chance to introduce discussions of how the government can influence economic activity and draw a clear distinction between fiscal and monetary policy. 

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Hull and Blackpool have highest jobless rates in UK | Business | The Guardian

Hull and Blackpool have highest jobless rates in UK | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
Unemployment worse in already struggling areas but rate is rising rapidly elsewhere
Graham Watsons insight:

The Guardian highlights the divergence in regional levels of unemployment, noting that it's the North that still bears the brunt, but that some pockets of the South have experienced that fastest rises in unemployment, in large part due to the difficulties facing the aviation sector.

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Brexit freight system 'will be ready on time'

Brexit freight system 'will be ready on time' | Macroeconomics: UK economy, IB Economics | Scoop.it
The government says a beta version will be ready when the new arrangements begin on 1 January.
Graham Watsons insight:

...And no doubt it will be as "world class" as the track-and-trace system.

 

Presumably Dido Harding's available to run it.

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Rishi Sunak: New ways to protect jobs 'my priority'

Rishi Sunak: New ways to protect jobs 'my priority' | Macroeconomics: UK economy, IB Economics | Scoop.it
Chancellor Rishi Sunak says he is looking for "creative" solutions as unemployment hits a two-year high.
Graham Watsons insight:

And here's the government's response to the possibility of higher unemployment: a promise that portecting jobs is the Chancellor's priority.

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Eating out scheme pushes down August inflation

Eating out scheme pushes down August inflation | Macroeconomics: UK economy, IB Economics | Scoop.it
The UK inflation rate fell sharply to 0.2% as Eat Out to Help Out scheme pushed down restaurant prices.
Graham Watsons insight:

Inflation fell dramatically last month, to 0.2%, with the Eat Out to Help Out Scheme playing a significant part in this, as well as a VAT cut in the hospitality sector. 

 

Similarly, air fares also fell. However, it will be interesting to see what happens to inflation in the months ahead.

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UK retailers hit by first weekly fall in shoppers since Covid lockdown | Business | The Guardian

UK retailers hit by first weekly fall in shoppers since Covid lockdown | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
End of holidays and reopening of schools result in fewer people visiting high streets
Graham Watsons insight:

Interesting little footnote - last week saw a fall in footfall on Britain's High Streets as schools returned. However, it is always the case that the first week after schools returned see this; the issue is that the drop - of over 6% - was higher than in previous years.

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Covid-19 drives leaders to make unprecedented interventions but what next? | Business | The Guardian

Covid-19 drives leaders to make unprecedented interventions but what next? | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
New thinking is needed because of economic turmoil since 2008 and environmental concerns
Graham Watsons insight:

Larry Elliott sums up many of the difficult decisions facing the government in the aftermath of the Covid-19 pandemic. Not much concrete economics, but quite a nice discussion of the problems associated with policymaking in the current environment.

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Unemployment: Planned redundancies twice the rate of last recession

Unemployment: Planned redundancies twice the rate of last recession | Macroeconomics: UK economy, IB Economics | Scoop.it
Employers are notifying the government of job cuts at twice the level seen in 2009.
Graham Watsons insight:

It looks like the current recession is going to have a marked effect on unemployment with the latest data implying that there are going to be twice the number of job cuts that there were in 2009. 

 

Employers have to notify the Insolvency Service if they are planning to lay off more than 20 workers and the latest data suggests that a great many of them have already done so.

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A Japan trade deal is little consolation if Britain is locked out of the EU | Trade policy | The Guardian

A Japan trade deal is little consolation if Britain is locked out of the EU | Trade policy | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
Europe is a far more important export market for the UK, as business leaders know – bigger even than the US
Graham Watsons insight:

Another excellent set of business briefs in the Observer, looking at the trade deal with Japan, and rightly noting that it's but small beer in comparison to a proper trade deal with the EU.

 

Other issues touched upon include gender equality, with the appointment of Jane Fraser at Citi, and the ethics of the mining industry, with the departure of a number of executives from Rio Tinto, in the light of the scandal regarding indigeneous heritage sites in Australia.

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Manufacturers slash investment as bailout scheme 'gathers dust' | Business | The Guardian

Manufacturers slash investment as bailout scheme 'gathers dust' | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
Labour says Treasury’s Project Birch is failing sector, with only one firm helped out so far
Graham Watsons insight:

The spectre of government failure looms, with the government's Project Birch scheme for Britain's manufacturers having only been taken up by one firm. 

 

So much for supporting the sector through the coronavirus pandemic.

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Coronavirus: UK firms voluntarily return £215m in furlough cash

Coronavirus: UK firms voluntarily return £215m in furlough cash | Macroeconomics: UK economy, IB Economics | Scoop.it
Over 80,000 firms have returned furlough scheme payments they did not need or took in error.
Graham Watsons insight:

Some good news for the government with some firms returning furlough scheme payments reducing the opportunity cost of the scheme. 

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UK DIY sales soar but clothing stores fall behind

UK DIY sales soar but clothing stores fall behind | Macroeconomics: UK economy, IB Economics | Scoop.it
Retail sales volumes in August continued to climb, but a mixed picture has emerged between sectors.
Graham Watsons insight:

A crumb of comfort for the High Street, with the latest ONS data suggesting that sales are continuing to pick up, such that they now exceed pre-lockdown levels.

 

It seems that DIY sales are driving the recovery, rather than clothes.

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Rising virus rates threaten economy, says Bank

Rising virus rates threaten economy, says Bank | Macroeconomics: UK economy, IB Economics | Scoop.it
Bank of England says a no deal Brexit is another risk as it keeps interest rates at historic low.
Graham Watsons insight:

The latest MPC meeting kept interest rates the same and highlighted the threat to the economy posed by rising coronavirus infection rates and no deal Brexit. 

 

Clearly, being an MPC member is a tough gig. Where do I apply?

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UK government could take stake in Sizewell nuclear power station

UK government could take stake in Sizewell nuclear power station | Macroeconomics: UK economy, IB Economics | Scoop.it
The UK may take a direct stake in a new nuclear station at Sizewell should Chinese backers pull out.
Graham Watsons insight:

The news that Japanese firm Hitachi is pulling out of the proposed Wyfla power station isn't the surprise here; for me, the fact that the government is looking to step in and take a stake in a new nuclear power station indicates a clear shift in attitudes to public sector ownership.

 

It almost seems heretical for a Conservative government to commit itself to direct public ownership of infrastructure - notr least with current levels of govenrment spending. 

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UK unemployment soars to highest level for almost two years

Unemployment in the UK has risen to its highest level for almost two years. Official figures show almost 700,000 people have come off payrolls since March. Economists expect more jobs to be lost as the government's furlough scheme is phased out by the end of October.

Meanwhile the Chancellor Rishi Sunak has said he will not extend the furlough programme but would look at new ways to support jobs and employment.


Graham Watsons insight:

The BBC looks at yesterday's rise in unemployment: with the latest data suggesting an uptick in unemployment, and more to come. 

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Is the chancellor cooking up a new jobs scheme?

Is the chancellor cooking up a new jobs scheme? | Macroeconomics: UK economy, IB Economics | Scoop.it
Rishi Sunak has dropped his heaviest hint yet that there may be a new measure or scheme to boost job creation.
Graham Watsons insight:

Faisal Islam wonders if the government is thinking about a successor to the Job Retention Scheme.

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'Redundancy floodgates will open' says Unite union

'Redundancy floodgates will open' says Unite union | Macroeconomics: UK economy, IB Economics | Scoop.it
Unite warns of a 'miserable Christmas' for workers without an extension of government jobs support.
Graham Watsons insight:

The trades unions believe the end of the Job Retention Scheme will trigger a wave of redundancies, as do the CBI. 

 

It will be interesting to see what pans out.

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Young people hit as unemployment rate rises

Young people hit as unemployment rate rises | Macroeconomics: UK economy, IB Economics | Scoop.it
The unemployment rate increases to 4.1% from 3.9%, its highest level for two years.
Graham Watsons insight:

The lastest unemployment figures have come out today and whilst don't ostensibly look too alarming, a quick drill don into the data is more concerning.

 

The headline rate of unemployment has increased from 3.9% to 4.1% but there's been a 150,000 decline in the number of young people in employment and many more firms are preparing to make people redundant, especially when the Job Retention Scheme comes to an end.

 

You might think about the costs of unemployment, and why these costs are so marked for the young.

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No-deal Brexit and Covid threaten 'double whammy' for car industry

No-deal Brexit and Covid threaten 'double whammy' for car industry | Macroeconomics: UK economy, IB Economics | Scoop.it
A no-deal Brexit could cost UK and European car makers £100bn, trade groups have warned.
Graham Watsons insight:

News, apparently. a no deal Brexit plus Covid equals bad news for the European car industry. This time it's not just the Society of Motor Manufacturers and Traders (SMMT) that are concerned, it's the pan-European, European Automobile Manufacturers Association (ACEA) that highlight the plight of the sector.

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Give us green post-Covid recovery, urges CBI boss

Give us green post-Covid recovery, urges CBI boss | Macroeconomics: UK economy, IB Economics | Scoop.it
The head of the industry body is urging government to create new green jobs to lift productivity.
Graham Watsons insight:

The Head of the CBI, Dame Carolyn Fairbairn is going to argue at a virtual conference, that the UK's coronavirus recovery should be predicated upon 'green investment' and that the government shouldn't miss the chance to commit to such a strategy. Little to disagree with here.

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Tax rises and austerity are not the way to shore up post-pandemic growth | Austerity | The Guardian

Tax rises and austerity are not the way to shore up post-pandemic growth | Austerity | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
Boris Johnson’s government has competing priorities, and no clear message, on economic policy
Graham Watsons insight:

Phillip Inman writes in the Observer, arguing that the government's response to coronavirus is extremely muddled, and that perhaps the current uncertainty about when the Budget is going to take place, masks a similar amount of uncertainty as regards policy. 

 

He suggests that the possibility of a further round of austerity, and the possibility of tax rises, both of which might be in the offing, offer no solution to the unemployment that's likely to occur and little chance of generating a sustained recovery. 

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