Readers Question: There are around 22 million households in the UK, 2/3 of whom own their house. So the rental market would be around 7 million of whom one million receive benefit, some portion living in social housing, some in private rented housing. Does that seem reasonable? Can you point me towards actual numbers? In …
Readers Questions: is this the worse time to be a young adult in the UK? I will answer this question primarily from the economic point of view. The first thought that springs to mind is that if you look at the long history of the UK, this is probably a good time to be young …
Readers Comment from UK debt under Labour. In 13 years from 1997/8 to 2009/10, the Labour Government increased debt by about £420 billion. In the 5 years from 2010/11 to 2014/2015, the Coalition Government will increase debt by about £600 billion. These are the facts. Yes, though I’m always nervous about extracting facts like …
Tight monetary policy implies the Central Bank is trying to reduce the demand for money and limit the pace of economic expansion. A tightening of monetary policy, could involve an increase in interest rates. – Higher interest rates increase the cost of borrowing and discourage investment and consumer spending. A tightening of monetary policy would …
Q2: Why are there millions of people unemployed even when the economy is booming? During periods of strong economic growth, we can often experience high rates of unemployment. Firstly, there may be structural unemployment. This occurs when the unemployed are unsuited or unable to fill job vacancies. For example, a booming economy may have a …
The German economy has been one of the world’s strongest economies in the post-war period. There are many aspects of the German economy which deserve praise and emulation – not least strong productivity growth, a booming export sector and prolonged low inflationary growth. In the post-war period Germany has played an important role in promoting …
It is not a good time to be a saver in the UK. Interest rates are 0.5% and inflation has been above 2% for a high proportion of the previous five years. Because inflation is higher than nominal interest rates, we are seeing negative real interest rates. This means many savers are seeing a decline …
The UK recovery paints an unusual situation. We have both positive economic growth and falling real wages. How can we have economic growth with falling real wages? Real wages are not the only source of economic growth. We can see growth from other components of AD – I (Investment), G (Government spending) plus net exports …