Robert Peston, economics editor

Robert Peston Economics editor

Welcome to Peston's Picks - for my latest thoughts on the big economic events around the world making us richer or poorer

Is the UK mending fast enough?

22 April 2014

You may remember that for some years I have been highlighting research by the consultants McKinsey that shows - inter alia - how the UK has been neck and neck with Japan as the most indebted of the world's biggest economies.

Well because there has been controversy about whether the UK's current recovery is dangerously and unsustainably debt-fuelled, I asked McKinsey if it could update its analysis.

The results are striking.

They show that the indebtedness or leverage of the UK economy is falling, which most would regard as good news. Economic growth in the UK is happening at a time when the finances of households, businesses and banks are being strengthened (although, to state the obvious, the indebtedness of government continues to rise).

But this strengthening of what you might think of as the nation's balance sheet, this reduction in indebtedness, is perhaps not happening fast enough - in that the UK still has the dubious privilege of being a world leader for indebtedness, and any significant and unexpected increase in interest rates would be highly damaging.

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Has government hurt education exports?

2 April 2014
University students

One of the UK's great global competitive strengths is in education, which contributes around £10bn a year in export earnings.

Which is useful at a time when the gap between our earnings from the rest of the world, and what we pay to the rest of the world, has been widening.

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Will proper pay rises soon be affordable?

1 April 2014
Homer Simpson
Have we become a nation of Homer Simpsons?

Ask any economist (ie, not me - don't ever forget I am a hack) and they'll say it is impossible to have any meaningful improvement in living standards without any improvement in productivity.

Which is why it has been slightly nerve-wracking, after all those years that we've been getting poorer, that the recent economic recovery has been accompanied by only the smallest improvements in output per hour worked or output per worker.

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UK's recovery not debt-fuelled

31 March 2014
Money
The overall indebtedness of the UK economy should fall pretty sharply in 2014

The publication of the 2013 national accounts contained a number of positives, not least of which was an upward revision to exports, and confirmation that business investment is recovering.

Or, to put it another way, although the belated escape of the UK economy from the long years of stagnation has been too dependent, many would say, on growth in consumer spending (in the traditional British way), the recovery is not as unbalanced as some have feared.

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When will the UK pay its way?

28 March 2014
Nissan vehicles for export waiting at Tyne docks in South Shields
The deficit on trade in goods remains eye-wateringly large

If the priority for the UK is to reduce its indebtedness - public and private sector debts - then today's balance of payments stats are not cheery.

They show the UK was a net borrower from the rest of the world of £65.7bn last year, up from £55.4bn in 2012.

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In Ukraine: IMF Mr Nice or Nasty?

27 March 2014
Maidan Square, Kiev
The Barricades in Maidan Square, the scene of months of protests

Is tough love from the West the right economic prescription for Ukraine, as the Russian bear consumes the Crimea and appears to be salivating over the prospect of consuming rather more of that turbulent country?

Or should the International Monetary Fund and other sovereign creditors be a little less insistent that Ukrainians should put on hairshirts as a condition of receiving vital official loans?

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The energy company blancmange

26 March 2014
Pylons in Scotland

Normally, when a company announces a price freeze and a cut in the profit margin it earns - which sounds like the declaration of a price war - the share price of that company falls.

That is what happened, for example, to the share price of Morrisons, the supermarket group, when it made just such a declaration.

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About Robert

Robert has won numerous awards for his journalism, including Journalist of the Year, Specialist Journalist of the Year and Scoop of the Year (twice) from the Royal Television Society, Performer of the Year from the Broadcasting Press Guild, and Broadcaster of the Year and Journalist of the Year from the Wincott Foundation.

Prior to joining the BBC, he was political editor and financial editor of the Financial Times, City Editor of the Sunday Telegraph and a columnist for the New Statesman and Sunday Times.

He broadcast and published a series of influential reports about the causes and consequences of the global financial crisis.

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