First, the good news. Rachel Reeves’ Spring Statement is unlikely to do any significant harm to business or consumer confidence, and it was largely shrugged off by the financial markets. These days that is something at least to cheer. In particular, the Chancellor wisely resisted the siren calls to relax her fiscal rules to finance … Continue reading No, the Spring Statement was not a ‘return to austerity’
Category: Applied economics
Bank of England on hold until May
The Bank of England's latest decision on interest rates is announced on Thursday. Here's my take. (TL;DR - I predict a 'dovish hold', albeit with a couple of nagging worries.) The markets are almost certainly right to expect 'no change' this week, with the Bank’s key rate left at 4½%. After cutting by ¼% in … Continue reading Bank of England on hold until May
UK economy on a knife edge
The latest official data are perhaps not as bad as some headlines suggest, but they do confirm that the UK economy made a poor start to 2025. First, the raw numbers. Monthly GDP fell by 0.1% in January, against the consensus forecast of a 0.1% rise, led by a 0.9% fall in the production sector … Continue reading UK economy on a knife edge
Should overseas aid be cut to fund more spending on defence?
This week the Prime Minister announced that UK defence spending will now be raised from 2.3% to 2.5% of national income in 2027, funded by cutting overseas aid from 0.5% to 0.3%. The politics around this switch are controversial – the minister responsible for aid has just resigned in protest – but the economics is … Continue reading Should overseas aid be cut to fund more spending on defence?
Plain-speaking Economics 