Readers Question: In Risks and benefits of Quantitative easing one point the programme mentioned was: The scale of quantitative easing could make it impossible to sell bonds back to market and this will damage the UK’s ability to borrow in the future. If the UK’s ability to borrow is constrained, this will lead to higher …
There are different ways of looking at the UK recovery. Firstly, we can look at the damage done to the economy since the peak in 2008. The black lines suggests a possible pre-crisis trend rate of economic growth. A rough rule of thumb, suggests that had economic growth been maintained at the pre-crisis trend rate …
To what extent can the government help boost domestic industry and manufacturing? In recent weeks, several politicians have talked about their desire to help UK manufacturing and boost industrial production. It may be a noble endeavour to try and boost UK industry and rebalance the economy away from financial services to manufacturing. But, how practical …
How much is the internet helping to increase productivity? Do distractions like Facebook and Twitter mean the overall benefits of the internet are less than we might hope? How does the internet compare to other technology revolutions, such as stem power and electricity? I often work from a cafe. It’s a nice combination – good …
Readers Question Why did bond yields in the USA rise at news of the Fed Tapering back in August? The Federal Reserve has been engaged in a policy of quantitative easing. This involves: Creating money electronically Using this created money to buy assets, such as government bonds. The aim of quantitative easing is to stimulate economic …
Readers Question: I am currently researching the impact of the global economy on inflation in the UK. I have come across economic policy uncertainty but am unsure what effect policy uncertainty in the EU and USA will have on the UK. UK inflation is primarily due to domestic factors. For example, if you look at …
The new Bank of England governor, Mark Carney, has implemented a type of unemployment target. As part of forward guidance, the Bank of England state that: Interest rates won’t rise from 0.5% until unemployment falls below at least 7%. Essentially, the bank are committing to expansionary (loose) monetary policy until there is a stronger economic …
Despite a shrinkage in manufacturing and widening trade deficit, the IMF have hinted that the UK economy is beginning to emerge from one of the longest periods of economic stagnation / recession on records. They marginally increased their forecast for UK growth to 0.9% for 2013. Does the recent good news give hope to the …