Britain’s pensions crisis is worse than you think: We must save even more January 23, 2014 WHAT does a decent pension cost? The short answer is a lot; and a lot more than most people think or want to know. The government plans to prevent a pensions crisis with two main policies: first, a state pension payable from the age of 67 or 68 of about £7,000 a year; secondly, it [...]
Letters to the Editor – 24/01 – EU green targets, Compulsory saving, Best of Twitter January 23, 2014 EU green targets [Re: Industry welcomes EU green targets for 2030, yesterday] It is incorrect to suggest that all businesses welcome the new targets. While it is promising to see the EU placing climate change and competitiveness side by side, it’s clear that others in Europe have little appetite to match the UK’s binding 50 [...]
Why it will take real bank reform to rid us of our addiction to candy floss credit January 22, 2014 GROWTH is back. Unemployment is falling. Each week seems to bring a flurry of upgraded forecasts. The mood of the pundits has gone from gloom to boom. But headline growth figures do not tell the full story. They only tell us about headline growth. Any government can raise output – and all other kinds of [...]
The Bank must at least discuss a rate rise: Its credibility is now on the line January 22, 2014 THE BANK of England must give serious consideration to raising interest rates. This doesn’t mean it should hike rates immediately. But the conditions under which rates would rise need to be clarified urgently. Forward guidance is being used to avoid this conversation. Ideally, guidance should be employed to reduce the discretion of policymakers over monetary [...]
A crisis of confidence is curbing SME lending and harming recovery January 22, 2014 CONFIDENCE can be the difference between success and failure. For some time, there has been a large number of businesses that are too pessimistic about their chances of getting the finance they need from their bank to grow. I can understand this mindset. These are people battling to keep on top of everything you have [...]
Letters to the Editor – 23/01 – Pensions crisis, Best of Twitter January 22, 2014 Pensions crisis [Re: Brits Told: Save Six Times More For Your Pension or Face Poverty, yesterday] Policy Exchange’s report highlights the pension poverty the British public will face unless a radical change in our savings culture occurs. But the shortfall of auto-enrolment is its mandatory nature, which drives apathy. Abolishing opt-outs will not solve the [...]
The entrepreneurial economy is taking off but we’re yet to realise its potential January 21, 2014 AT THE launch of Global Entrepreneurship Week 2013, Vince Cable announced that “10 per cent of the UK workforce is engaged in entrepreneurship activity.” Then he ploughed on with his speech, leaving the audience wondering precisely what this was supposed to mean. After decades of being politely sidelined, entrepreneurship is political and economic orthodoxy. Few [...]
Against the Grain: Google and the output gap: Why it’s time to ditch this outdated concept January 21, 2014 THE CONCEPT of the “output gap” is central to mainstream macroeconomics. It is not merely of academic interest, however. The Office for Budget Responsibility (OBR) has a specific requirement to estimate this gap, which it defines formally as “the difference between the current level of activity in the economy and the potential level it could [...]
The grandees of Davos 2014 may finally have a theme worth discussing January 21, 2014 I’VE LEARNED a new word: heterarchy. I came across it buried in this year’s Davos theme. Apparently it means multiple structures, overlapping, interacting, connecting and networking. Am I really climbing a Swiss mountain to learn about an arcane corner of the dictionary? The theme is set each year by the World Economic Forum (WEF), which [...]
Letters to the editor – 22/01 – Banking IT crisis, False optimism, Best of Twitter January 21, 2014 Banking IT crisis [Re: UK banks risk financial meltdown if the long-term IT crisis remains unresolved, yesterday] I agree with the identification of the problem, though not necessarily with the solution (“to create a national programme of IT transformation”). It’s not clear that a centralised approach to solving systemic problems is required. An alternative would be to agree [...]