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Macroeconomics: UK economy, IB Economics

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October 7, 3:12 PM

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From www.bbc.co.uk - October 7, 3:59 AM

Graham Watson's insight:

This story illustrates some of the themes associated with the international trade theory that I've been teaching. In this case, a UK petrochemical refiner, Ineos, has been forced to lay-off 60 workers in Hull because it cannot compete with lower priced imports.

The company argue that UK energy costs are making it uncompetitive, and that there's also been evidence of dumping that have driven it out of business. They're calling on the government to intervene; however, given the wealth of Ineos' owner, Sir Jim Ratcliffe, I fear that the government won't - rightfully - take any notice of this.

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Economy

Macroeconomics: UK economy, IB Economics

A brief overview of relevant articles for IB and A-Level all relating to the UK economy

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Today, 5:03 AM

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Rachel Reeves given extra £3bn for budget after VAT error fixed | Government borrowing | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it

From www.theguardian.com - Today, 4:20 AM

Graham Watson's insight:

It seems as though the Chancellor has a tiny fraction more wiggle room - or slightly less to worry about - because the ONS has revised down the level of government borrowing by £3bn because the amount of VAT being collected hasn't been accurately reported.

It's another instance where ONS data has been called into question and imperfect information makes policymaking harder.

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October 7, 3:12 PM

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From www.bbc.co.uk - October 7, 3:59 AM

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October 5, 3:01 PM

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Rachel Reeves’s second budget needs a narrative of fairness to justify tax rises | Heather Stewart | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it

From www.theguardian.com - October 5, 5:08 AM

Graham Watson's insight:

This Guardian editorial looks at Rachel Reeves' Budget and the choices that she faces. It highlights the state of the public finances, the fact that tax rises are seemingly inevitable, but that the difficulty is going to be spinning them in such a way that makes the narrative more positive.

She advocates for a return to core Labour values, and focusing on social justice, child poverty and reducing inequality on the basis that voters don't always mind paying more tax if they can see a coherent case for doing so.

In my experience, I'm not entirely convinced that this is the case.

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October 2, 2:07 PM

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UK and EU poised to strike deal sparing British business from carbon border tax | Foreign policy | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it

From www.theguardian.com - October 2, 12:24 PM

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Evidence of closer UK/EU co-operation, with a deal close to being struck to exclude UK steel producers from the EU's new carbon border adjustment mechanism (CBAM). It will provide the sector with very welcome relief and would help boost growth and give the UK and the EU to align their schemes.

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October 2, 1:45 PM

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From www.bbc.co.uk - October 2, 5:42 AM

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The CEO of the UK's largest grocer, Tesco, has suggested that the Chancellor should not look to increase business taxes further in the Budget. He argues that the double whammy of higher employers National Insurance contributions, which cost Tesco £235m over the past year and the £90m cost of the Extended Producer Responsibility (ERP) programme, mean that retailers cannot afford further tax increases.

However, whilst stating this, Mr. Murphy also announced that the UK's largest supermarket upgraded its profit forecast for the year, and its combined profit for the last two years was £4.5 billion, so I think he might want to keep things in perspective.

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October 1, 3:27 AM

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From www.theguardian.com - September 30, 12:00 PM

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More Budget gossip - a mere seven weeks before it's due - with speculation mounting that Labour is going to find a way to scrap the two-child benefit cap because it's seen as the best way to tackle rising child poverty. Simultaneously, it seems as though there are also going to be attempts to reduce economic inactivity and get people back into active labour force participation.

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September 29, 3:35 PM

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From www.bbc.co.uk - September 29, 12:36 PM

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Faisal Islam on the Chancellor's address to Conference, highlighting the inevitability of either tax rises, spending cuts or both. It seems as though there are some hard choices ahead.

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September 29, 2:19 AM

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From www.bbc.co.uk - September 28, 7:46 PM

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This Simon Jack article looks at whether the government can regain the confidence of business, noting that business confidence measures have diverged and there's a sense that people are waiting for things to happen.

However, I'd flip this on its head. Should business really be operating on this short a timeframe? And why aren't they taking a longer term view, perhaps considering how austerity hollowed out public services and noting the lack of investment in the previous decade?

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September 28, 3:07 AM

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From www.theguardian.com - September 27, 5:30 PM

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It seems as though Labour think that the solution to the housing shortage is a new wave of 12 New Towns with a focus on ensuring that 40% of them are affordable houses. The proposal seems to suggest that this will provide 300,000 new homes.

But will it? There's a labour shortage in the construction sector, and although there are obviously positive demand-side and supply-side effects - and an opportunity to work through the multiplier effect - does a lack of spare capacity make achieving this target less likely? And then there's the NIMBYs...

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September 24, 12:36 PM

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From www.bbc.co.uk - September 24, 12:03 PM

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Well, I never...when George Osborne first announced the Northern Powerhouse I was unequivocal about the fact that it was almost entirely rhetorical. And here we are nearly 15 years later. It's largely rhetorical.

It seems as though a potential rail link between Manchester and Liverpool is more expensive than first thought and is still being 'road tested'. Who would have thought it?

However, I also believe that a lack of infrastructure investment in the North of England - over many years - is one of the reasons where there's such regional inequality and that's something that needs proper tackling.

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September 23, 7:37 AM

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From www.theguardian.com - September 23, 5:52 AM

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I'm currently teaching a lesson on inflation - the pupils are reading an article - so what are the chances of this appearing. The G7 is of the view that UK inflation is going to be the highest of the member states in 2025. This will be seen as a bad thing - however, looking at recent data, 6 G7 members (all bar Japan) see inflation move in lockstep with one another, largely because of the impact of external factors.

So whilst this news isn't ideal, it's hardly catastrophic.

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September 23, 2:10 AM

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What swayed the decision for second Gatwick runway and what does it mean for Heathrow? | Gatwick airport | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it

From www.theguardian.com - September 22, 1:54 PM

Graham Watson's insight:

Airport expansion at Gatwick has been approved. This Guardian article looks at what swung the case in its favour and the wider implications of this, both for the expansion of Heathrow and the macroeconomy.

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September 22, 2:24 AM

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From www.bbc.co.uk - September 21, 2:38 PM

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The Transport Secretary has approved the second runway at Gatwick, meaning that airport expansion is back on the agenda again, much to the delight of supporters, and dismay of environmentalists.

Is this indicative of the 'inevitable' trade-off between economic growth and environmental concerns? Or is such a trade-off increasingly fallacious?

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Today, 2:17 AM

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Lifetime of earnings not enough for UK workers to join wealthiest 10%, report says | Inequality | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it

From www.theguardian.com - October 7, 7:01 PM

Graham Watson's insight:

The Resolution Foundation flags the extent of wealth inequality in the UK noting that it would take the average worker 52 years, saving all their income to accumulate enough wealth to be in the wealthiest 10% of the population.

Is this too high a level of inequality? And what causes such wealth disparities? It's worth thinking about because the answer isn't that one group work exceptionally hard and the other group are just lazy.

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October 7, 2:13 AM

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From www.bbc.co.uk - October 6, 8:25 AM

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No surprises here, but Aston Martin, the luxury car maker, are reporting that profits are likely to be lower as a result of President Trump's tariffs. This shouldn't be unexpected. But the question is "Who's gaining?"

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October 4, 3:37 AM

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Rachel Reeves urged to break manifesto pledges to avoid ‘pasty tax’ budget | Budget 2025 | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it

From www.theguardian.com - October 4, 1:00 AM

Graham Watson's insight:

It looks like the Budget is, as ever, going to be a series of compromises, with the main concern being whether the government's manifesto pledges are going to hamstring its ability to formulate policy.

The commitment not to increase income tax, National Insurance or VAT - which make up 75% of tax revenue - means that there's a concern that any tax increase are going to be bitty and not coherent. However, breaking the manifesto pledges would come at high political cost.

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October 2, 2:04 PM

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Rachel Reeves could raise £45bn in taxes and keep promises, report says | Economic policy | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it

From www.theguardian.com - October 2, 1:28 PM

Graham Watson's insight:

The Chief Economist of Morgan Stanley reckons that the Chancellor could find around £45bn in taxes without breaking her manifesto pledges. It seems as though freezing tax thresholds, a gambling tax, taxing the banking sector and reform of pension taxation could all raise this sort of revenue and wouldn't be as damaging to growth as some other taxes.

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October 1, 3:33 AM

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The Guardian view on child poverty: the scrapping of the two-child benefit cap can’t come soon enough | Editorial | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it

From www.theguardian.com - September 30, 1:42 PM

Graham Watson's insight:

Today's Guardian editorial on the abolition of the two-child benefit cap notes that it's a start as far as tackling child poverty is concerned, but that the government needs to go further in raising the incomes of the poorest families and providing better quality public services too.

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October 1, 3:24 AM

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UK business confidence falls to record low amid rising employment costs | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it

From www.theguardian.com - September 30, 7:01 PM

Graham Watson's insight:

The latest survey of business confidence by the Institute of Directors suggests that it is at a record low level, driven by higher labour costs and persistently high energy prices.

It seems this uncertainty is also a part of MPC discussions, with MPC members unsure as to the persistence of inflation, and you should know that greater uncertainty implies lower levels of economic growth.

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September 29, 3:32 PM

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From www.bbc.co.uk - September 29, 9:55 AM

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I'll leave this here...it's fairly self-explanatory...

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September 29, 2:13 AM

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From www.bbc.co.uk - September 28, 5:30 PM

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The government is planning to reform provision for those young people who've been unemployed for 18 months, by offering them work placements to try to get them back into work. However, this is one of those intractable problems; successive governments have tried lots of different approaches, with little success.

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September 27, 4:23 AM

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Bank of England should not be ‘overly cautious’ on interest rate cuts, says policymaker | Interest rates | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it

From www.theguardian.com - September 26, 1:27 PM

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One member of the MPC's take on the current inflationary environment: it's temporary and rates should come down sooner rather than later.

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September 24, 3:28 AM

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Almost 1.5m homes could be built on brownfield sites in England, report finds | Housing | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it

From www.theguardian.com - September 24, 1:00 AM

Graham Watson's insight:

This is being presented as an exclusive: the CPRE have identified that 1.5m homes could be built on brownfield sites, meaning that housing targets could be met without encroaching on the countryside.

The problem? For many people. living on a brownfield site doesn't seem as attractive as living in semi-rural suburbia.

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September 23, 7:33 AM

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From www.bbc.co.uk - September 23, 3:25 AM

Graham Watson's insight:

An interesting article that highlights the increasingly interconnected nature of supply chains, and the regional ramifications of cyber-attacks on a business.

In this instance, it's JLR that was victim of the cyber-attack but it seems as though its West Midlands plants could stay shut until next month. In doing so, though, they imperil the viability of many of its smaller suppliers. As the article notes: "JLR's UK plants employ about 30,000 people directly, with a further 100,000 working in the firm's supply chain and 60,000 who rely on the spending of these workers.

So should the government intervene to keep paying workers in some of these smaller firms, on the basis that it will prop up the regional economy, and enable production to restart more smoothly once the cyber-attack is overcome? There's a case for intervention, but equally you could argue that there's also a case for JLR intervening too - perhaps by advancing some of its payments to suppliers - because it is going to benefit from any form of intervention.

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September 23, 2:06 AM

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Reeves urged to take 2p off employee NI and add it to income tax in budget | Budget 2025 | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it

From www.theguardian.com - September 22, 7:01 PM

Graham Watson's insight:

The Resolution Foundation have thrown their pre-Budget hat into the ring, suggesting tax reform: they advocate a 2p cut in employee National Insurance contributions and adding 2p to income tax arguing that that latter applies to a wider group of taxpayers and is fairer on that basis.

The issue will be whether this is seen to break the manifesto pledge not to increase tax on working people, something that the Opposition will be keen to point out. But you could start by considering the following quotation from the article: "The previous government’s 4p cut in national insurance, costing the exchequer £20bn a year, was not matched by an increase in income tax." One wonders why the public finances are in their current state in the first place.

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Macroeconomics: UK economy, IB Economics

Rachel Reeves given extra £3bn for budget after VAT error fixed | Government borrowing | The Guardian

Ineos announces job losses at East Yorkshire petrochemical plant

Rachel Reeves’s second budget needs a narrative of fairness to justify tax rises | Heather Stewart | The Guardian

UK and EU poised to strike deal sparing British business from carbon border tax | Foreign policy | The Guardian

Tesco boss warns Reeves against further business taxes

Rachel Reeves to lift two-child benefit cap in November budget | Child benefits | The Guardian

Faisal Islam: Rachel Reeves pre-emptively justifies tax rises

Can Labour reverse 'desperate loss of faith' from business?

Plan to build 12 new towns in England to be unveiled at Labour conference | Labour | The Guardian

Northern Powerhouse Rail plans delayed again

UK to suffer highest inflation in G7 this year, says OECD | Global economy | The Guardian

What swayed the decision for second Gatwick runway and what does it mean for Heathrow? | Gatwick airport | The Guardian

Gatwick airport second runway approved by transport secretary

Lifetime of earnings not enough for UK workers to join wealthiest 10%, report says | Inequality | The Guardian

Aston Martin in profit warning amid US tariff woes

Rachel Reeves urged to break manifesto pledges to avoid ‘pasty tax’ budget | Budget 2025 | The Guardian

Rachel Reeves could raise £45bn in taxes and keep promises, report says | Economic policy | The Guardian

The Guardian view on child poverty: the scrapping of the two-child benefit cap can’t come soon enough | Editorial | The Guardian

UK business confidence falls to record low amid rising employment costs | Business | The Guardian

Rachel Reeves warns of harder choices to come as she hints at tax rises

Rachel Reeves to guarantee paid work for young people unemployed for 18 months

Bank of England should not be ‘overly cautious’ on interest rate cuts, says policymaker | Interest rates | The Guardian

Almost 1.5m homes could be built on brownfield sites in England, report finds | Housing | The Guardian

Jaguar Land Rover shutdown extended again after cyber attack

Reeves urged to take 2p off employee NI and add it to income tax in budget | Budget 2025 | The Guardian