Economy

These days it is almost a given that economics is not grounded in reality.  As the old joke has it: Q: What do you call an economist who makes a prediction? A: Wrong. The failure of thousands of extremely well-paid economists to see the 2008 crash coming did irrevocable harm …

As the British general election enters its final week social media users have been bombarded by Tory trolls using #magicmoneytree to imply that Labour cannot be trusted on the economy.  The irony here is that the majority of Tory MPs and almost all of their non-banking supporters are entirely ignorant …

Most people think of the 2008 crash as a subprime mortgage crisis.  This is only partially true – and misleadingly so.  The real crisis was in the unregulated “shadow banking” sector where “securitised investment vehicles” (SIVs) are traded.  A SIV is created by repackaging the income from loans (including mortgages) …

For an economy largely owned by the City of London, the post-Brexit future of UK banking and finance is an existential concern. The conventional wisdom is that unless the UK government can negotiate an agreement with the EU to allow the current passporting arrangements to continue then we will see …

The problem with recessions is that you don’t know you’re in one until it is too late.  That is because nobody actually knows what the economy is doing right now.  We have to wait until government and corporate statisticians compile and analyse the data – a process that can take …

Between now and June 8th, the most common question posed by politicians, journalists and drunk men down the pub will be some variant of “how are you going to pay for it?”  From defence spending to international aid and from energy price caps to social care, every electoral promise will …

Forget Brexit, it’s much worse than that according to Paul J. Davies at the Wall Street Journal: “Banks in Britain are still languishing in the doldrums brought on by the financial crisis of 2008. Weak banking activity and low investment returns have caused revenue to shrink, leading to widespread cost-cutting …

Believe it or not, the UK is currently experiencing ‘full-employment.’  That is, while 4.7 percent of working age people are officially unemployed, most are what economists used to call ‘frictional’ – they are moving between jobs or moving between work and education. At face value, this is good news.  Indeed, …

Within any country’s economy are several critical industries that are considered “strategic.”  In 19th century Britain, for example, coal, steel and shipbuilding were deemed to be essential.  Even today, the ability to construct military vessels is, at least to a limited extent, considered strategic.  Steel has a less obvious position.  …

The digital economy has largely been welcomed as a “disruptive force,” obliging old fashioned businesses to compete for custom with new lean internet companies like Uber and Google.  But disruptive businesses in banking may not be the positive development intended.  As Leonid Bershidsky at Bloomberg points out: “In a rivalry …