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 …
By the end of 2013, the UK government will have implemented 52% of planned fiscal consolidation. The IFS report that most of this fiscal consolidation has come through taxes. In coming years, we will see the impact of cuts to the benefit budget. Only 58% of the total cuts to benefit spending have been implemented, …
In the past few years, Central Banks have been buying bonds to Increase money supply Reduce bond yields The aim of quantitative easing is to avoid deflationary pressure and increase economic growth. Ending quantitative easing will mean The Central Bank stop buying any more bonds. The process will then be reversed and, in time, the …
When interest rates were cut to 0.5% in March 2009, few would have expected them to remain at 0.5 until the present time. Yet, we have seen an unprecedented period of zero interest rates. There is much speculation about: When interest rates will rise? How much will interest rates to increase to? What will be …
One feature of the labour market in the past 10 years has been the rise of zero-hour contracts. This is a contract where the employer is not obliged to employ a worker for any number of fixed hours. It means that the contract is highly flexible in terms of hours worked. This is obviously advantageous …
Readers Question: 1. Does state capitalism as practised in China pose a fundamental challenge to the Western model of liberal-democratic capitalism? No, I don’t think so. From a political perspective, no matter how economic successful China might be, there will never be any enthusiasm to replicate China’s one party political system. In fact, it is …
Readers Question: my question is If the UK. had joined the Euro back when it first started would the UK. have benefited like Germany or would we be in the same situation as Greece, Italy, and Spain? If the UK had joined the Euro from the start in 1999, the UK economy would definitely have …
Abenomics refers to the economic policy of the current Japanese prime minister Shinzō Abe. The aim of the policy is to stimulate strong economic recovery and help the Japanese economy to escape a cycle of deflation, and low growth. Can Japan break the cycle of low growth? The range of policies include: Expansionary monetary policy …