Readers Question: Is it right that private banks can create 97% of all new money by lending it into existence, and what effect does this have on inflation and the value of money already in existence? Banks can effectively increase the money supply, by lending money. Most money in the modern economy is bank deposits. …
As elections loom, the Turkish economy is facing a self-inflicted economic crisis of high inflation, and a cost of living crisis that dwarfs what we see elsewhere in Europe. Turkey's Self-Inflicted Economic CrisisWatch this video on YouTube In recent years, Turkey has seen inflation rate surge to over 80% – leaving over 53% of people …
Greed Inflation is a term used to describe a higher inflation rate due to firms increasing their profit margins. In a period of high inflation, it becomes easier for firms to slip in rising profit margins too. Greed inflation is more likely in markets where firms have a degree of monopoly power and they can …
Britain is facing a chronic backlog in many public services. This includes record NHS waiting lists, a shortage of housing, delays in the criminal system, and a surge in unprocessed asylum requests. On top of this, there is a cost of living crisis, falling real wages and the highest level of strikes this century. It …
An examination of UK house price affordability. UK House price to earnings ratios (all buyers) reached a peak in 2022. Above the 2009 peak, which preceded the housing price falls. The house price to earnings ratio is most extreme in London, with the ratio reaching 11 times salary. Housing prices in the North, Scotland and …
Politicians often promise tax cuts can lead to higher productivity, higher economic growth, and even pay for themselves through a boost to long-term incomes. These promises may chime with the electorate who tend to prefer promises of tax cuts. But, do tax cuts really increase economic growth? There are two impacts of lower tax. Increasing …
Readers Comment. Why doesn’t the Bank of England just print the money instead of borrowing the money? Printing more money doesn’t increase economic output – it only increases the amount of cash circulating in the economy. If more money is printed, consumers are able to demand more goods, but if firms have still the same …
Inflation is a period of rising prices. The primary policy for reducing inflation is monetary policy – in particular, raising interest rates reduces demand and helps to bring inflation under control. Other policies to reduce inflation can include tight fiscal policy (higher tax), supply-side policies, wage control, appreciation in the exchange rate and control of …