David Smith

Don’t rule out the Bank of England cutting interest rates just yet A sudden war with uncertain aims is bad news for the economy, but there is more than one route out of a crisis

Big rise in energy prices has 2 effects: one inflationary, the other recessionary. And while the Bank is required to get inflation back to 2%, different members of the committee will have different views on how best to achieve this
(£) www.thetimes.com/business/eco...
By @dsmitheconomics.bsky.social

Don’t rule out the Bank of England cutting interest rates just yet A sudden war with uncertain aims is bad news for the economy, but there is more than one route out of a crisis

My Times piece: It is far too soon to say that the Bank of England will not cut interest rates again, let alone that it will raise them. Further cuts are more likely than not:

Don’t rule out the Bank of England cutting interest rates just yet

www.thetimes.com/article/8917...

Don’t rule out the Bank of England cutting interest rates just yet A sudden war with uncertain aims is bad news for the economy, but there is more than one route out of a crisis

My Times piece: It is far too soon to say that the Bank of England will not cut interest rates again, let alone that it will raise them. Further cuts are more likely than not:

Don’t rule out the Bank of England cutting interest rates just yet

www.thetimes.com/article/8917...

Growth

Every time our record tax burden rises, the risks to growth multiply Projected to reach a record 38.5 per cent of GDP by 2030-31, this high-tax economy should worry us all

My Sunday Times piece: The OBR’s latest forecast was widely dismissed as out of date before it was published. But it had timely warnings on the risks of raising the tax burden to record levels:

Every time our record tax burden rises, the risks to growth multiply

www.thetimes.com/article/1da2...

Every time our record tax burden rises, the risks to growth multiply Projected to reach a record 38.5 per cent of GDP by 2030-31, this high-tax economy should worry us all

My Sunday Times piece: The OBR’s latest forecast was widely dismissed as out of date before it was published. But it had timely warnings on the risks of raising the tax burden to record levels:

Every time our record tax burden rises, the risks to growth multiply

www.thetimes.com/article/1da2...

OBR forecast is not bad for Rachel Reeves — but it’s vulnerable The chancellor has created many of her own difficulties but is remarkably unlucky that renewed conflict in the Middle East could shoot down hopes for growth

My Times piece: With so much going on, if everything turned out in line with the new official spring forecast, we would consider ourselves very fortunate:

OBR forecast is not bad for Rachel Reeves — but it’s vulnerable

www.thetimes.com/article/9ad0...

OBR forecast is not bad for Rachel Reeves — but it’s vulnerable The chancellor has created many of her own difficulties but is remarkably unlucky that renewed conflict in the Middle East could shoot down hopes for growth

My Times piece: With so much going on, if everything turned out in line with the new official spring forecast, we would consider ourselves very fortunate:

OBR forecast is not bad for Rachel Reeves — but it’s vulnerable

www.thetimes.com/article/9ad0...

Today’s column:

The spring statement looms — this is why everyone is eerily quiet Despite some promising economic signs and an expected lack of fireworks this week, it is too soon to think the smooth progress is set to continue

My Sunday Times piece: There is a distinct lack of excitement and speculation ahead of Rachel Reeves’s spring statement on Tuesday, and that’s a good thing. We don’t need any more fireworks:

The spring statement looms — this is why everyone is eerily quiet

www.thetimes.com/article/230a...

The spring statement looms — this is why everyone is eerily quiet Despite some promising economic signs and an expected lack of fireworks this week, it is too soon to think the smooth progress is set to continue

My Sunday Times piece: There is a distinct lack of excitement and speculation ahead of Rachel Reeves’s spring statement on Tuesday, and that’s a good thing. We don’t need any more fireworks:

The spring statement looms — this is why everyone is eerily quiet

www.thetimes.com/article/230a...

I see @dsmitheconomics.bsky.social has discovered what happens to your inbox when you state some basic facts about the economics of immigration to the UK..,😉

www.thetimes.com/business/eco...

Donald Trump’s bad tariff economics are also bad politics The president’s policy is clearly folly and, as his ratings continue to slide, somebody on his team may have to finally tell him

Tariffs should have gone out with flintlock pistols. POTUS thinks tariffs are reducing America’s trade deficit, boosting economic growth and bringing manufacturing jobs back home. Figures show none of this happening.
(£) www.thetimes.com/business/eco...
By @dsmitheconomics.bsky.social

"Tariffs are a throwback to the long-discredited mercantilist ideas of 300 years ago, and the “beggar-my-neighbour” protectionism of the Depression years. As a weapon, they should have gone out with flintlock pistols."

Donald Trump’s bad tariff economics are also bad politics The president’s policy is clearly folly and, as his ratings continue to slide, somebody on his team may have to finally tell him

My Times piece: The US trade deficit in goods widened last year and GDP growth slowed, demonstrating that Trump’s tariffs are an economic as well as a political folly:

Donald Trump’s bad tariff economics are also bad politics

www.thetimes.com/article/16b5...

Donald Trump’s bad tariff economics are also bad politics The president’s policy is clearly folly and, as his ratings continue to slide, somebody on his team may have to finally tell him

My Times piece: The US trade deficit in goods widened last year and GDP growth slowed, demonstrating that Trump’s tariffs are an economic as well as a political folly:

Donald Trump’s bad tariff economics are also bad politics

www.thetimes.com/article/16b5...

Is unemployment still the price we have to pay for low inflation? ‘Slack’ in an economy makes it easier to bear down on wages and prices, and then to cut interest rates. There is, though, a bit more to the story

Statistically, most of the increase in unemployment reflects a reduction in inactivity; people have been making themselves available for work, without necessarily finding it.
(£) www.thetimes.com/business/eco...
By @dsmitheconomics.bsky.social

Excellent article for A Level students going into their exam season.

By asking them in the Labour Force Survey

Is unemployment still the price we have to pay for low inflation? ‘Slack’ in an economy makes it easier to bear down on wages and prices, and then to cut interest rates. There is, though, a bit more to the story

My Sunday Times piece: Since the Phillips curve was devised in the 1950s, we expect rising unemployment to be associated with falling inflation. But things may be more complicated than that now:

Is unemployment still the price we have to pay for low inflation?

www.thetimes.com/article/cc9e...

Is unemployment still the price we have to pay for low inflation? ‘Slack’ in an economy makes it easier to bear down on wages and prices, and then to cut interest rates. There is, though, a bit more to the story

My Sunday Times piece: Since the Phillips curve was devised in the 1950s, we expect rising unemployment to be associated with falling inflation. But things may be more complicated than that now:

Is unemployment still the price we have to pay for low inflation?

www.thetimes.com/article/cc9e...

Will Rachel Reeves be forced to raise taxes over falling immigration? Rapidly declining net migration figures could eliminate the headroom the chancellor established in the budget if the OBR downgrades its forecast

Migrants -both from EU and elsewhere -are more likely to be in work than the UK-born.

As @dsmitheconomics.bsky.social says, lots of other moving parts, but other things equal much lower migration means tax rises or spending cuts.

www.thetimes.com/business/eco...

Will Rachel Reeves be forced to raise taxes over falling immigration? Rapidly declining net migration figures could eliminate the headroom the chancellor established in the budget if the OBR downgrades its forecast

Immigrants, particularly those who work — and most of working age do — boost tax revenues more than they add to public spending. Latest figs employment rate for working-age: Britons, 74.7%: not born in UK, 76.7%; born in EU, 80.4%.
(£) www.thetimes.com/business/eco...
By @dsmitheconomics.bsky.social

Today’s Times piece

Will Rachel Reeves be forced to raise taxes over falling immigration? Rapidly declining net migration figures could eliminate the headroom the chancellor established in the budget if the OBR downgrades its forecast

My Times piece: Falling net migration could mean that the chancellor’s fiscal headroom is significantly reduced. But it is far too soon to assume that further tax rises are inevitable:

Will Rachel Reeves be forced to raise taxes over falling immigration?

www.thetimes.com/article/8f31...

Will Rachel Reeves be forced to raise taxes over falling immigration? Rapidly declining net migration figures could eliminate the headroom the chancellor established in the budget if the OBR downgrades its forecast

My Times piece: Falling net migration could mean that the chancellor’s fiscal headroom is significantly reduced. But it is far too soon to assume that further tax rises are inevitable:

Will Rachel Reeves be forced to raise taxes over falling immigration?

www.thetimes.com/article/8f31...

Interesting article as always from @dsmitheconomics.bsky.social but agree with @busecon.bsky.social that housing should have been mentioned for young professionals. Generally the UK economy seems to be a hostile environment for young graduates...no surprise they would look elsewhere.

Need to mention the broken housing market in the UK, and with regards to teaching, which needed mentioning in the article, and the government seem absolutely oblivious to, is that many young teachers leave the UK and teach in the UAE/Qatar/Saudi because of free accommodation.

Why the young and rich are leaving Britain Brexit began the outflow of millionaires and Labour’s tax changes for non-doms accelerated it, but young people are also seeking brighter horizons abroad

My Sunday Times piece: In the 1960s we worried about the “brain drain” of talent. Now we are worried again about the outflow of talent, together with an exodus of the wealthy leaving because of UK taxes:

Why the young and rich are leaving Britain

www.thetimes.com/article/439c...

In fiscal terms, it’s strange to be thinking of replacing Starmer While the economy is a long way from being fixed the outlook is still bright, and a new prime minister or chancellor could mean more pain for taxpayers

Inflation, interest rates, government debt, growth, all provide reasons to be cheerful-ish says @dsmitheconomics.bsky.social
'after all the missteps and unpopular policies, things could be about to start coming right.'
(£) www.thetimes.com/business/eco...