Question: How will Brexit affect the UK budget deficit / national debt / public finances? One of the low points of the Brexit campaign was when the chancellor of the exchequer George Osborne announced a vote for Brexit would lead to higher taxes and lower spending straightaway. Dubbed the ‘punishment budget’ it probably had the …
Unemployment in many European countries has risen sharply due to the credit crunch and global recession. The worst hit countries include Spain (ES) and Greece (EL), who both have unemployment rates of over 24%. In the past few months, there has been a slight reduction in European unemployment, but the prolonged period of mass unemployment …
Interest rates have been cut to a record low of 0.25% – essentially due to grim economic news from the short-run demand side shock of Brexit. Economic theory states that in normal circumstances, lower interest rates should boost aggregate demand (AD). To give a quick recap, lower interest rates should in theory: Reduce the incentive …
How to judge George Osborne’s and David Cameron’s economic record since May 2010? They inherited an economy recovering from a deep recession, high unemployment and large budget deficit. It was a difficult economic circumstance, but at the same time you might expect a strong economic recovery as there was much unused capacity and potential for …
The EU has many achievements of which it can rightly claim. Long period of peace and prosperity, unrivalled in European history. Secured transition to democracy for countries such as Spain and post-Communist countries in Eastern Europe Free trade and free movement has helped improve economic growth and living standards. Working on European wide problems, such …
Some thing that weren’t always made clear during EU referendum. Economic experts are worth listening to. A string of senior ‘leave’ politicians lined up to say you shouldn’t listen to economists making warnings about short term and long-term damage to economy. But, just because economic analysis is inconvenient to your point of view, doesn’t alter …
George Osborne has recently stated that leaving the EU could leave a black hole in public finances of £30bn and this would lead to sharp budget cuts – tax rises and spending cuts. This raises the interesting question of whether you can talk yourself into a recession. Do predictions of recession become self-fulfilling? How can …