The UK has betted big on wind power, in 2024, in 2025 wind accounted for 30% of electricity generation. To its supporters it helps provide cheap renewable energy, but to its opponents, the cost is actually much higher and it is failing to solve the UK’s energy needs because of its unreliable and erratic production. …
Readers Question: Interest rates are determined by the markets and not by the Bank of England-where’s the truth? Firstly, it is worth bearing in mind that there are different interest rates in an economy. Main interest rates Base Rates – set by Bank of England Gilt Yields – Effective interest rates on government bonds, set …
The logic of government subsidies is that they can help counteract market failure. For example, if there are positive externalities, then government subsidies can increase production and consumption and increase social welfare. However, in practise, not all government subsidies work. These are examples of failed government subsidies. Subsidies for Fossil Fuel Producers Both China and …
Q. How does the Bank of England decide and set interest rates? The Bank of England set the repo rate. This is sometimes known as the ‘base rate’. It is the interest rate at which commercial banks (like Lloyds and Natwest) borrow from the Bank of England. The Bank of England can control liquidity and …
A fall in the inflation rate means that prices are rising at a slower rate (called disinflation) A fall in prices means prices are actually going down. This means a negative inflation rate (called deflation) Recently, there was a fall in the UK inflation rate to 3.2%, what does that mean? This shows inflation in …
Quantitative easing is a part of monetary policy, which involves the Central Bank creating money electronically, buying long-dated securities and expanding the size of the Central Bank reserve balance sheet. Reserve Management Purchases RMP are central bank purchases of short-term government securities (typically Treasury bills) carried out to ensure there are enough bank reserves in …
20mph speed limits are a big controversy. Campaigners say they can reduce fatalities, make roads safer, encourage more active forms of transport and just make local communities a more inviting place. However, many bitterly opposed 20 mph speed limits on the grounds that they are unnecessary, hard to keep to 20mph and lead to traffic …
In the post-war period, apart from short-lived recessions, real wage growth was positive, growing at a trend rate of roughly 2%. But, since 2009, wage growth has been much more stagnant with periods of falling real wages This is latest date for wage growth. In Dec 2025, wage growth was 4.7%, and inflation 3.2%, which …