Macroeconomics: UK economy, IB Economics
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Macroeconomics: UK economy, IB Economics
A brief overview of relevant articles for IB and A-Level all relating to the UK economy
Curated by Graham Watson
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March 12, 2020 4:09 AM
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Budget 2020: Beer, wine and cider duties frozen

Budget 2020: Beer, wine and cider duties frozen | Macroeconomics: UK economy, IB Economics | Scoop.it
It is only the second time in two decades that duty on all types of alcohol has been frozen.
Graham Watson's insight:

Alcohol duties were frozen for only the second time in two decades yesterday, offering some respite to brewers and publicans. However, anti-alcohol campaigners argue that this will have an adverse effect on problem drinking.

 

All of which goes to show that you can't please all of the people all of the time.

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March 12, 2020 3:59 AM
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Summary of Budget 2020: Key points at-a-glance

Summary of Budget 2020: Key points at-a-glance | Macroeconomics: UK economy, IB Economics | Scoop.it
Rishi Sunak has delivered his first Budget in the House of Commons. Here's what you need to know.
Graham Watson's insight:

The Budget-at-a-glance.

 

This is the BBC version of the detail in the Budget. It doesn't really add to the pre-Budget material you should already have been aware of.

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March 11, 2020 4:28 AM
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Budget 2020 checklist: what to expect from the chancellor | UK news | The Guardian

Budget 2020 checklist: what to expect from the chancellor | UK news | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
How the chancellor can offset the worst affects of the coronavirus fallout, from motoring to welfare, pensions to Brexit
Graham Watson's insight:

More what to expect from the Budget.

 

I will give you one piece of insider knowledge. He'll be smartly-dressed - something that can't always be said about previous Chancellors.

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March 11, 2020 4:08 AM
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Government to pledge billions for filling potholes

Government to pledge billions for filling potholes | Macroeconomics: UK economy, IB Economics | Scoop.it
Chancellor Rishi Sunak is set to announce £2.5bn of funding to fix potholes in Wednesday's Budget.
Graham Watson's insight:

Holes in the road. How very Keynesian. But it seems that the government is going to promise more money to fill the nation's potholed roads. Clearly, someone in the Treasury has driven around Birmingham recently. 

 

However, it's ironic that the party of austerity should find itself spending money on paying people to fill in holes in the road.  And you might reflect as to whether there's a causal link between austerity and potholes.

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March 11, 2020 4:01 AM
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Budget 2020: Five ways Rishi Sunak could tackle coronavirus

Budget 2020: Five ways Rishi Sunak could tackle coronavirus | Macroeconomics: UK economy, IB Economics | Scoop.it
It's been dubbed the "coronavirus Budget", but what can Rishi Sunak do to ease the impact?
Graham Watson's insight:

The first of many - speculation as to what the Chancellor could do to help tackle coronavirus. Five policy measures that might be being considered.

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March 10, 2020 4:04 AM
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The tax that hits struggling High Streets hardest

The tax that hits struggling High Streets hardest | Macroeconomics: UK economy, IB Economics | Scoop.it
How business rates aren't keeping up with the changes on British High Streets.
Graham Watson's insight:

This BBC article is the clearest illustration I've come across as to why the current system of business rates isn't working. In short, the system simply isn't designed to cope with periods of decline on the High Street and a substantial fall in the rateable value of properties.

 

Read and and see why it's inevitable that many stores are choosing to vacate premises in struggling urban areas, such as Blackpool.

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March 7, 2020 3:22 AM
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Nissan presses ahead with £400m Qashqai plan for Sunderland | Business | The Guardian

Nissan presses ahead with £400m Qashqai plan for Sunderland | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
Japanese carmaker unveils £52m production press amid post-Brexit tariff warnings
Graham Watson's insight:

Good news for the post-Brexit car industry: it seems that Nissan are investing in their Sunderland plant, which may help secure jobs in the region. 

 

It's not every day that there's been good news for this sector in the past few years.

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March 6, 2020 12:01 PM
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Why UK high street retailers want urgent reform of business rates | Business | The Guardian

Why UK high street retailers want urgent reform of business rates | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
Lobby groups say the way rates are calculated and paid is hurting most those it aims to help best
Graham Watson's insight:

The annual cri-de-coeur about business rates - and given the state of many of the nations' High Streets, they many have a point. An estimate 180,000 jobs have been lost in the past 16 months, and short of charity shops, mobile phone shops and so on, many high streets have plenty of vacant premises, which might suggest a need for change.

 

Unfortunately, I don't think the government will be that radical: I look at the Cabinet and the majority of the ministers who've had a genuine profession - and I don't mean journalism, lobbying or working for a think-tank - have worked in finance. Which makes them largely ignorant of the struggles of retailers, especially independent retailers, in relation to a system of business rates that clearly only partially fit for purpose at best. 

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March 6, 2020 4:03 AM
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Levelling up Britain: Blyth's hopes rest on Tory promises of a new dawn | Business | The Guardian

Levelling up Britain: Blyth's hopes rest on Tory promises of a new dawn | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
The Guardian finds high expectations in the Northumberland town, of new jobs and better transport links
Graham Watson's insight:

A snapshot of regional inequality, and just the sort of place that the Conservatives won in the last election and that is now expecting "levelling up" - whatever that may be. 

 

In the first place, I'm a cynic but I would wager that the vast majority of the Cabinet couldn't care about Blyth. And I will wager that by the time of the next election nothing will have changed. 

 

If the voters of Blyth think that the EU is to blame for their troubles, I'm afraid they're somewhat mistaken. I hope that the Guardian carries a piece on the town just prior to the next election: let's see how much changes.

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March 6, 2020 3:49 AM
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Is GDP the best way to measure a country's worth?

From people power and charging for roads: how do you build an infrastructure revolution?
Graham Watson's insight:

This clip might be bearable if it weren't for the fact that GDP is a measure of income, not wealth, as is stated in the very first sentence but other than that, it covers some of the reasons why there's debate about the best way to measure well-being.

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March 6, 2020 3:44 AM
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Budget 2020: Your essential guide to Rishi Sunak's debut

Budget 2020: Your essential guide to Rishi Sunak's debut | Macroeconomics: UK economy, IB Economics | Scoop.it
When is the Budget, what does it do and what should we expect to hear from the chancellor?
Graham Watson's insight:

I once taught a young chap called Sunak, I wonder what became of him.

 

Well now I know: this is the start of the wind-up to Budget week. What to expect? Well, probably less than we thought a fortnight ago, with coronavirus hanging over the Budget, and given that there's another Budget this year and a spending review, I'd expect there to be relatively little of note.

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March 5, 2020 2:45 AM
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'It's scary': Bridgend braces for fallout from Ford factory closure | Business | The Guardian

'It's scary': Bridgend braces for fallout from Ford factory closure | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
The town’s biggest employer is to leave after 40 years, leaving many residents fearful of the future
Graham Watson's insight:

And if you wanted an example of what the negative multiplier effects of a significant factory closure are, the prospects for Bridgend are a case in point. 

 

After 40 years, Ford are closing their Bridgend plant with obvious consequences for the local community.

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March 4, 2020 12:07 PM
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Post-Brexit: restaurants struggle to find staff

Polish chef at Damian Wawrzyniak worries about finding enough trained staff for his restaurant in the post-Brexit UK.
Graham Watson's insight:

I've already flagged this up before but Brexit has led to concerns for the hospitality sector, with concerns about a lack of qualified staff, most obviously in the form of EU migrants. What have we done? 

 

Alas, I know all too well - but if it becomes harder to hire staff, then wages in the sector are going to rise and this is going to increase inflation and drive down living standards. Turkeys, it seems, do sometimes vote for Christmas.

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March 12, 2020 4:06 AM
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Budget 2020: UK public finances 'vulnerable' to borrowing shock

Budget 2020: UK public finances 'vulnerable' to borrowing shock | Macroeconomics: UK economy, IB Economics | Scoop.it
The Office for Budget Responsibility has warned higher government spending could raise the cost of borrowing.
Graham Watson's insight:

The OBR take on the orgy of public spending announced in yesterday's Budget - it leaves the UK vulnerable to a change in investor sentiment that might result in lower borrowing costs.

And they have a point - despite the clown on Radio 4's Today programme suggesting that interest rates can go "up as well as down". I'd like him to tell me how much lower than 0.25% he expects them to fall.

 

I'm fascinated by the reaction to the Budget - the same people who argued for nearly a decade in favour of austerity when interest rates were marginally higher than they are today appear to be lauding a budget that seems to be the ideological opposite. How can this circle be squared? 

 

Unless, of course, you draw a clear distinction between current and capital spending. So, public sector borrowing is expected to grow dramatically over the life of the next parliament, and we will wait and see the effects, although slower than forecast growth might mean that the risks of more spending are increased.

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March 11, 2020 4:30 AM
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Rishi Sunak has an impossible job: to spend, but not to tax | Rafael Behr | Opinion | The Guardian

Rishi Sunak has an impossible job: to spend, but not to tax | Rafael Behr | Opinion | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
The chancellor’s first budget is a tall order, but Boris Johnson can trust him not to challenge the upbeat storytelling, says Guardian columnist Rafael Behr
Graham Watson's insight:

And there's more...but this time giving you a little bit of the political context that surrounds the Budget.

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March 11, 2020 4:15 AM
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Budget 2020: What is Johnson-omics?

Budget 2020: What is Johnson-omics? | Macroeconomics: UK economy, IB Economics | Scoop.it
How will the prime minister manage the UK economy?
Graham Watson's insight:

What is Johnsonomics? I doubt the Prime Minister has much of an idea. It is clear that the government is going to boost infrastructure spending, and the notion of Boris Johnson as a Brexity-Hezza is laughable.

 

However, it does seem that the government is going to relax fiscal rules and borrow large sums of money for capital spending focused on levelling up the economy - whatever that means. 

 

It's interesting to note that all of the well-connected talking heads featured struggle to define Johnsonomics - as I suggested they might. 

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March 11, 2020 4:05 AM
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Budget 2020: Chancellor to unveil plans amid coronavirus pressures

Budget 2020: Chancellor to unveil plans amid coronavirus pressures | Macroeconomics: UK economy, IB Economics | Scoop.it
Chancellor Rishi Sunak will present the government's first fiscal plans since it won the election.
Graham Watson's insight:

A familiar sight, Rishi Sunak slaving over another Economics essay! 

 

Not quite. This time it's the Budget, with yet more speculation on what the Budget is going to contain. Everyone is expecting there to be clear distinction drawn between current spending and capital spending - and if there is I'd fully expect my former Head of Department, Michael Fontes, to be name-checked - and the announcement of a raft of infrastructure spending. We'll see.

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March 11, 2020 3:59 AM
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UK interest rates cut in emergency move

UK interest rates cut in emergency move | Macroeconomics: UK economy, IB Economics | Scoop.it
The Bank of England cuts rates to 0.25% to try to shore up the economy amid the coronavirus outbreak.
Graham Watson's insight:

Your first surprise of the day isn't fiscal but monetary - the Bank of England has announced an emergency interest rate cut of 0.5% to 0.25% to try and shore up the economy in the wake of the coronavirus outbreak. 

 

Perhaps they read Barry Eichengreen's Guardian piece yesterday. Irrespective of that, it's a chance to work through what this means for the economy and think about how the monetary transmission mechanism is likely to convert this change in a monetary variable into changes in the real economy, and whether it can do much to offset the effects of a supply-side shock.

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March 9, 2020 4:42 AM
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British Steel: Takeover set to be completed

British Steel: Takeover set to be completed | Macroeconomics: UK economy, IB Economics | Scoop.it
The Chinese Jingye Group has said that the £50m takeover is due to be completed on Monday.
Graham Watson's insight:

At last: the purchase of British Steel by the Chinese Jingye Group is going to be completed today, hopefully securing the jobs of around 5,000 workers and avoiding a negative regional multiplier effect in some of the UK's most deprived regions. 

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March 7, 2020 3:10 AM
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Budget 2020: What we already know about our changing finances

Budget 2020: What we already know about our changing finances | Macroeconomics: UK economy, IB Economics | Scoop.it
Your finances are changing in April, irrespective of speculation about the Budget. Here is a guide.
Graham Watson's insight:

Very personal finance heavy commentary on what to expect from the Budget but there is a nice mention of the concept of fiscal drag. If you don't know what that is, or would like to refresh your knowledge of how it might affect the economy, then this is worth a read. 

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March 6, 2020 4:06 AM
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Poorest 20% of Britons no better off than in 2004, says ONS | Business | The Guardian

Poorest 20% of Britons no better off than in 2004, says ONS | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
Emphasis on boosting minimum wage while cutting benefits seems to have left low-income families worse off
Graham Watson's insight:

And yet more on inequality, with the latest data suggesting that the poorest 20% of Britons are no better off in real terms than they were in 2004. Of course, that's the fault of the EU, and not austerity in the aftermath of the financial crisis, the perpetuation of regional inequality or the lack of affordable housing. 

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March 6, 2020 3:57 AM
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Why solving Britain's productivity problem is key to Rishi Sunak's 2020 budget

Britain is gearing up for its first Budget under the Johnson-Sunak axis – as well as being unleashed from the restrictive auspices of the EU. But how exactly will Rishi Sunak make the UK more productive post Brexit?
Graham Watson's insight:

The Telegraph looks at Britain's productivity crisis - and thankfully fails to define productivity, presumably for fear of getting the definition incorrect.

 

In this case, the article is interesting in looking at the causes of the productivity puzzle, and putting the UK's productivity in some sort of historic context. It identifies three key contributors to a lack of productivity: the financial crisis, under-investment and skills shortages.

 

My only complaint: the pro-Brexit slant on this. Is there any evidence that productive people are currently deterred from coming to the UK? I don't think so.

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March 6, 2020 3:46 AM
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Government delays Budget infrastructure plan

Government delays Budget infrastructure plan | Macroeconomics: UK economy, IB Economics | Scoop.it
The chancellor will refocus the National Infrastructure Strategy in line with "net zero" climate ambitions.
Graham Watson's insight:

And this is one of the reasons why there will be relatively little in the Budget. The release of the National Infrastructure Strategy has been postponed. Perhaps they'll release the results of the investigation into Russian interference in the UK political process instead.  

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March 5, 2020 9:38 AM
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Coronavirus will brutally expose the effect of a decade of public service cuts | Polly Toynbee | Opinion | The Guardian

Coronavirus will brutally expose the effect of a decade of public service cuts | Polly Toynbee | Opinion | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
If there’s an epidemic voters will be shocked to discover how depleted services really are, says Guardian columnist Polly Toynbee
Graham Watson's insight:

Yet another coronavirus-based story with Polly Toynbee choosing to depict the outbreak of the virus as indicating the extent to which public services have been run down after 10 years of austerity. 

 

It seems as though the Cassandras are hoping for the worst. 

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March 5, 2020 2:38 AM
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Collapsed Flybe tells passengers not to travel to airports

Collapsed Flybe tells passengers not to travel to airports | Macroeconomics: UK economy, IB Economics | Scoop.it
All flights grounded after the coronavirus outbreak help push the airline into administration.
Graham Watson's insight:

Flybe has gone into administration, putting 2,000 jobs at risk and having the potential to provide a significant negative regional multiplier in places such as Exeter and Southampton, where the airports are heavily dependent upon the company's flights.

 

Sad days - the Flybe Southampton to Newcastle route was a staple of my life for nearly a decade - although I have to confess that I did once fly on a plane with only 9 passengers, which even at the time made me wonder about the route's viability.  

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