Economics
No-deal Brexit would push UK economy into recession
In more unsettling Brexit news, it has been reported that in a No-deal Brexit scenario the UK economy would tank. According to the OECD (Organisation for Economic Cooperation and Development) the UK economy would slide into recession and growth would plunge under 1 per cent. Even if there is a smoother Brexit the OECD believes that UK economic growth would fall to 0.8 per cent, following on from 1.4 per cent growth in 2018. The last time UK growth was...
No deal Brexit could leave economy 9% weaker & cause food shortages
A ‘no deal’ Brexit could cause huge harm on the UK economy according to a new report. Over the next 15 years the economy could contract by 6 to 9 per cent, according to the Government report. Additionally there could also be food shortages as 30 per cent of food is imported from the EU. It is thought that food prices will rise as well. The report said: “In the absence of other action from government, some food prices are...
Study suggests a key assumption of economic theory may be wrong
The concept of equilibrium, one of the most central ideas in economics and one of the core assumptions in the vast majority of economic models, may have serious problems, concludes a study from the Institute for New Economic Thinking at the Oxford Martin School. The concept of equilibrium is the basis of many economic models, including models used by policymakers on issues like monetary policy, climate change, trade policy and the minimum wage. In a paper published today in Science Advances, Marco Pangallo,...
2019 property market off to a slow start
The year got off to a slow start, with the latest RICS UK Residential Market Survey pointing to a subdued backdrop, as enquiries, sales and new instructions all declined further in London. In the near term across the UK, contributors sense little prospect of a turnaround, as concerns over the potential impact of Brexit, alongside affordability constraints continue to cause buyers and sellers to hesitate. During January, new buyer enquiries fell in London, although at a slower pace than previously. ...
Conservative zero tariffs plan will ‘tear heart out of UK manufacturing’
Business Secretary Greg Clark refused to rule out imposing zero tariffs which would ‘rip the heart’ out of UK manufacturing. Today in Parliament Louise Haigh MP asked the Secretary of State for Business, Energy and Industrial Strategy if he agreed zero tariffs “leave us open to a flood of cheap imports driving down wages and costing jobs?” Greg Clarke replied: “No decision has yet been taken on that . Imposing zero tariffs would be a disaster for UK’s proud manufacturing...
2018 saw UK economy expand at slowest rate since 2012
The ONS (Office for National Statistics) reported that the growth in 2018 was 1.4% down from 1.8% in 2017. Even more worryingly this is the lowest rate since 2012. According to the ONS, quarterly growth also slowed, falling to 0.2% in the three months to December - down from 0.6% in the three months to September. A decline in car production and factory output were some of the main factors that caused the slower growth. Head of GDP at the...
Workers shouldn’t ‘pick up the tab’ for Tory Brexit
The Bank of England seems to be losing faith in Britain’s economic strength and has slashed its outlook for the country yesterday as it opted to leave interest rates on hold. The bank expects growth this year to be just 1.2% - the slowest since 2009 when the economy was in recession. Bank of England Governor Mark Carney said: "The fog of Brexit is causing short term volatility in the economic data, and more fundamentally, it is creating a series...
Sterling slides as Bank of England slashes growth forecasts
The Bank of England has downgraded its growth forecast for 2019 growth to 1.2%, which would be the smallest rise since 2009. Sterling tumbled on the news and was trading 0.6% down versus the US dollar at $1.285. Against the euro, the pound was down 0.3% at €1.134. The PM flew to Brussels today to push for concessions from EU leaders on the divorce deal agreed with them last year, which has been rejected by Parliament. Both Mr Tusk and...
A third of UK firms may now move abroad because of Brexit
Industry bosses have warned that a third of British businesses are thinking of relocating abroad. The latest figures from the Institute of Directors (IOD) warn 16% of companies have already started the move, and 13% have now started actively planning it. The IOD surveyed 1,200 company directors and in shocking news for the British economy and UK jobs found only 62% confirmed that they have no intention of setting up outside the UK. This is a shocking vote of no...