Readers Question: Would it be possible for a nation to claim that is reducing inflation rate successfully through economic measures, however at same time is allowing increase of commodities prices such as bread, meat, and etc… Firstly a fall in the inflation rate, means prices are still rising. Just at a slower rate. For example …
Readers Question: Do you think the help to buy scheme is fuelling a housing bubble? Only about 3% of houses are bought through this method but do you think that it is likely that a bubble will develop? In a way, I think you answer the question yourself in stating that only 3% of houses …
Firstly, I thought it might be helpful to talk about the different types of spending cuts that people refer to. An actual cut in government spending. e.g. one year we spend £39bn on defence, the next year that is cut to £38 bn. This is a nominal cut of £1bn. The real cut will be …
A mansion tax (or property tax) would be an annual progressive charged that would be paid by homeowners. It is effectively a tax on housing wealth. The Labour party has suggested implementing a property tax on homes worth over £2 million. Exact details have not been confirmed, but the suggestion is that it will be …
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 …
In the recent blog – Post-war economic boom and reduction in debt, we saw how the UK successfully reduced national debt as a % of GDP from 230% of GDP to 30% of GDP, over a period of 40 years. However, the story after the First World War was very different. The UK finished the …
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 …
Readers Question: What is the economic impact of proposed welfare benefit freezes proposed by Chancellor, Mr Osborne? Mr Osborne has proposed a welfare freeze, worth £3 billion of savings over two years. This benefit freeze includes Jobseeker’s Allowance, Income Support, Child Tax Credit and Working Tax Credit, Child Benefit and Employment Support Allowance (paid to …