Readers Question: What have been the drivers of the mortgage default rate in the 2008 recession compared to the late 1980s/ 1990s? Despite the depth of the recession in 2008, the mortgage default rate in the UK has been lower in the current recession than in the early 1990s. The peak for home repossessions occurred …
Readers Question: What are the factors that influence the fixing of a minimum wage? The UK’s first National Minimum wage was established in 1999 and was set at £3.60 for those over 21. It was feared by business that a minimum wage would cause unemployment. However, over the period between 1999 – 2007, in the …
A two speed Europe refers to how, within the EU, economies are growing at different rates and are at different stages in the business cycle. For example, countries in the core of the Eurozone (Germany, Netherlands, France) have seen relatively good recovery since the recession. In these countries, unit labour costs have remained competitive, enabling …
Source: OECD The shaded area represents the range of statistics amongst OECD countries from highest to lowest. The OECD have recently published a report on the UK economy. These graphs illustrate how the UK is performing against other OECD Countries. Economic Growth (GDP index) During 2008, the UK’s decline in GDP was similar to the …
Q. Why does Japanese Yen appreciate after Earthquake and Tsunami? Japan has suffered a tragic natural disaster. Aside from the very real human tragedies, it will have an adverse economic impact. Yet, since the crisis, the Japanese Yen has appreciated in value. Why has the Yen appreciated when perhaps you may have expected the opposite? …
Readers Question: In 2009, both inflation and growth went down, but in 1991, the inflation went up, even though the growth went down. What could be the reason for the difference in behavior? (UK Growth Rates) In 1990 inflation was high. This high inflation was a result of the previous economic boom. In the late …
Deaths from liver disease have doubled in Britain in recent years while other countries such as France have seen “profound” falls thanks in part to “strict” rules on marketing drink, a strongly-worded article in The Lancet claims. Academics say that total deaths from the “wider harms” caused to society by alcohol could reach 250,000 in …
Source: ONS This graph shows how inflation rates for different categories can vary enormously. Firstly, gas and electricity prices are by far the most volatile. This reflects the volatile nature of supply, it also reflects the fact demand and supply are inelastic. See: volatile food prices for the economic theory behind this volatility. Despite the …