As Toyota says it’ll invest £240m in its UK plant, has the threat of Brexit to carmakers been overplayed? March 17, 2017 Daniel Mahoney, deputy director at the Centre for Policy Studies, says Yes. The prospect of a 10 per cent tariff on UK car exports to the EU is unnerving for the automotive industry. However, developments since the EU referendum are reason to remain positive. Both Nissan and now Toyota have announced major investments in the [...]
Government should do more to boost flagging company investment business group says March 17, 2017 An influential business group has called for government to do more to tackle falling capital spending as fears are rising about a slowdown in long-term business investment. The Institute of Chartered Accountants (ICAEW) forecasts businesses will invest 1.9 per cent less in 2017 as companies start a “period of restraint” during the Brexit process. Stephen [...]
Sterling jumps as Bank of England’s Monetary Policy Committee (MPC) votes to leave monetary policy unchanged, but one votes to hike March 16, 2017 A senior policymaker at the Bank of England defied her colleagues to vote to raise interest rates for the first time in over a year, as the Monetary Policy Committee (MPC) left monetary policy untouched. Kristin Forbes voted to raise bank rate by 0.25 per cent. Forbes is an external member of the nine-member MPC [...]
Four things to watch out for from the Bank of England’s Monetary Policy Committee meeting March 16, 2017 The Bank of England is set to announce monetary policy at its latest meeting this afternoon. Investors don’t expect anything in the way of change, but as always economists will try to read the runes of the Monetary Policy Committee’s (MPC) statement to see how the Bank’s economists think the UK economy is faring. Read [...]
The idea that London will be replaced as Europe’s financial centre is completely potty March 16, 2017 It's now almost nine months since the referendum, and Article 50 is about to be invoked. Readers of this column will be familiar with my arguments as to why a unilateral free trade Brexit is the optimal exit strategy, because of the gain to consumers in the short term and to consumers and producers in the [...]
The US Federal Reserve has hiked interest rates and signalled a slower pace of monetary tightening March 15, 2017 The US Federal Reserve lifted interest rates for the second time in three months last night, but sent the dollar and US Treasury yields tumbling with a cautious outlook on economic growth and future hikes. The federal funds rate was raised to 0.75 per cent-one per cent. However, the Fed stuck to its forecast of just two [...]
Was Philip Hammond right to U-turn on his national insurance hike for the self-employed? March 15, 2017 Julian Jessop, chief economist at the Institute of Economic Affairs, says Yes. It is increasingly hard to justify why the self-employed should pay much lower national insurance contributions (NICs) than those who work for others. Nonetheless, this distortion should have been tackled as part of a fundamental rethink of the tax and benefit system, rather [...]
HOLD: Hands off interest rates, City A.M.’s Shadow MPC tells Bank of England’s Monetary Policy Committee March 15, 2017 Economists expect the Bank of England to leave monetary policy unchanged at tomorrow’s meeting of senior policymakers, but pressure is slowly growing to begin pushing monetary policy back to more normal levels. City A.M.’s Shadow Monetary Policy Committee (MPC) voted in favour of keeping policy unchanged, but added another dissenter since February's meeting pushing for [...]
Rejoice? Unemployment hits its lowest since 1975 – but the experts aren’t so happy March 15, 2017 Unemployment in hit its lowest level since 1975 in the three months to January while the rate of working-age adults employed stayed at record highs. However, weaker wage growth at a time inflation is rising has given economists – and sterling – pause for thought. The government was cock-a-hoop. Damian Hinds, minister for employment said [...]
Pound reverses gains as wage growth falls – but unemployment in the UK reaches lowest level since 1975 March 15, 2017 The rate of unemployed people in the UK has fallen to its joint lowest level since 1975 as the rate of people in employment in the UK stayed at record highs in the three months to January. Unemployment fell to a four-decade low of 4.7 per cent of the work force, down from 5.1 per [...]