The unprecedented 20.4 per cent slump in UK GDP in a single month is obviously headline news, but still needs to be put in context. There are three key points. First, the April numbers are old news – about two months old. That’s an awful long time during a rapidly evolving crisis like this. Indeed, … Continue reading It could have been worse
On Wednesday the OECD’s latest Economic Outlook presented a relatively downbeat assessment of the impact of the coronavirus pandemic on the global economy (more ‘U’ than ‘V’). The report also flagged up some specific concerns about the vulnerability of the UK, which prompted some particularly gloomy headlines here. But is the OECD on to anything … Continue reading A deeper dive into the OECD’s forecasts
The focus of economic policy is starting to shift from protecting businesses, jobs and incomes during the lockdown towards supporting the recovery. Business lobbies, ‘big state’ think tanks, academics and the TUC are all lining up to call for a huge fiscal stimulus. However, more intervention now could be exactly the wrong choice. Instead, we … Continue reading The economy could pleasantly surprise us at how fast it recovers
The coronavirus pandemic is of course primarily a social crisis, but the fiscal costs are also important. A sharp and sustained deterioration in the public finances could have major implications for future government spending and taxation. Many are already asking 'how will we pay for all this?' and worried about the prospect of 'Austerity 2.0'. … Continue reading How will we pay for all this?