Category Archives: Blog

IMF crisis echoes

The economy in crisis. Capital markets in revolt. Half of all under-25 year olds out of work. A left-wing government in office, with Marxist ministers determined to re-nationalise every major industry. And a deeply unpopular bailout from the International Monetary Fund. No, I'm not talking about Greece today, but Britain in 1976. While there are some differences between Athens today and London then (primarily the currency arrangements, if not the facial hair), … Continue Reading ››

Why is David Cameron so keen to talk about the possible collapse of the euro? Two theories

Strange as this might sound, the most interesting thing about Downing Street’s decision to hold a meeting this morning on the prospect of a Greek euro exit has nothing to do with the meeting itself.

As it happens, we’ve known for years that the Treasury and Bank of England have contingency plans in place in case the euro breaks up, or one of its … Continue Reading ››

The worst goods trade deficit in more than three centuries

Last year Britain recorded its biggest deficit in goods trade since records began.* Those records technically go all the way back to 1697, though getting hold of the data is rather tricky. The ONS only has numbers going back to 1998, on a comparable basis, while HM Revenue & Customs supposedly has the 300-year series of data, but, when I spoke to them earlier today, weren't exactly sure where one can lay one's … Continue Reading ››

The problem with Greece’s GDP-bond solution

If you want a good illustration of the difficulties facing Yanis Varoufakis with his innovative idea for sorting out Greece's debt problems, think back to Britain's difficulty with the EU Budget late last year. You'll recall that George Osborne was left with a €2.1bn bill as a result of newly-calculated GDP figures from many years back. You may also recall that there were (and are) still some question marks over the … Continue Reading ››

Real estate: Britain’s most disappointing industry

Here follows some of the background thoughts behind my column in today's Times You'd probably guess that the single biggest sector of the UK economy is retail. What you might not have realised is that it has very nearly being overtaken (in terms of its contribution to Britain's gross domestic product) by real estate. That's right, real estate is now officially only a whisker away from being the dominant industry in the UK … Continue Reading ››

UK interest rate expectations at lowest levels ever

Here's how weird things are getting: in Denmark there are now some mortgages with negative interest rates. In other words, banks are paying customers to lend them money. Odd things like this happen when you cut interest rates below zero, as they did in Copenhagen the other week. This Danish episode was a direct consequence of the European Central Bank's decision to begin quantitative easing - since the krone is pegged directly to the euro. You … Continue Reading ››

The UK government hasn’t been able to borrow this cheaply since 1703

Or ever, most probably. Today the UK Government's benchmark rate of interest hit 1.4%. That's the lowest it's been in quite some time. A very, very long time, in fact. The Bank of England has stats on this going back to 1703, the year Sir Isaac Newton was elected president of the Royal Society, when Queen Anne was on the throne. And as you can see from the chart below, in all … Continue Reading ››

Carney’s euro intervention – illustrated edition

Mark Carney is a close friend and colleague of Mario Draghi, the European Central Bank president. This is worth bearing in mind when considering the significance of his speech last night, in which he urged certain eurozone nations to spend more to try to get their economies going. Although Germany was not mentioned by name, it was clear from the speech, which you can read in full here and … Continue Reading ››