Readers Question: Can someone please tell me what percent of the UK debt is held by the Bank of England? The Bank of England have purchased £325 bn of asset purchases, which are financed by issuing created reserves. Of these £325bn of assets, the vast majority are government gilts (bonds). The government’s net public sector …
The new French President Francois Holland has cut the country’s retirement age. For workers who begin work at 18, they will now be able to retire at 60 (cut from 62) The move is controversial given the state of the French and European economy. He cites social justice as the reason for cutting the retirement …
Readers Question: 1. I read somewhere that accommodative monetary policy (in other words, quantitative easing) does not automatically result in higher inflation. For higher inflation to occur, the output gap must be crossed. i.e. idle factories back in business, unemployment rates down, etc. However, I don’t think the hyperinflation in Zimbabwe was preceded by increasing …
Austerity measures have pushed the UK and European economies back into recession with rising unemployment. But, I often feel that austerity measures are actually quite popular with the electorate. It is true that in Europe recently there has been something of a backlash. The recession has been so severe, voters have started to vote against …
Readers Question:Do you really think the UK will keep the AAA credit rating for say the next 2 years? The UK is one of the few countries to have a AAA credit rating. (list of countries with highest credit rating) I’ve always felt that the UK should be able to maintain its AAA credit rating …
Paul Krugman has been one of the clearest and strongest advocates of fiscal stimulus to end the recession which we have faced since the credit crisis of 2008. The basic premise of the book – ‘End This Depression Now!‘ is based on Keynesian analysis of a prolonged recession and liquidity trap. The basic argument is …
Readers Question: What is the impact of debt on the housing market in the UK? If the UK is in such a debt crisis, what impact has this had on the housing market. Firstly, a debt crisis could imply both government debt and household debt. The UK is facing a combination of both (see: total …
The BBC have this infographic about what happens if Greece leaves the Euro. Source: BBC But, when I look at this. Everything has already happened. Greece is already in recession. It has been in recession for past 5 years. Greece already has bank runs. Multinationals are not keeping money in Greek banks Due to unemployment …