Inequality is bad for growth, says OECD

Job Center Plus

It has been widely said, not least by ministers, that inequality reduced under the last government.

The official stats back that up - and the causes were largely a surge in benefit payments to those who lost jobs or whose income collapsed in the Great Recession, and the introduction of a new top rate of tax.

That 50% new top rate was announced by Labour in 2010, however, and reduced to 45% by George Osborne as Chancellor. So to be clear, the reduction in inequality wasn't a great cause championed by the coalition of Tories and LibDems and pursued with vigour by the adoption of novel policies.

What is more, a new study by the OECD, shows this narrowing of inequality was relatively short lived.

It says that in the UK, as measured by the so-called Gini coefficient and by the ratio of incomes of the top 10% of earners to the bottom 10%, inequality lessened between 2007 and 2011 and then increased again by 2013 (though not back to where it was in 2007).

Read full article Inequality is bad for growth, says OECD

Osborne faces up to productivity challenge

George Osborne

As a hack who has seen eight chancellors come and go since first taking a professional interest in the stewardship of the economy, it is slightly tempting to yawn and ignore George Osborne's claim tonight that he will put boosting productivity at the forefront of his policies.

If I were cynical I would say that it is a shame that the so-called productivity challenge hardly featured in the general election battle.

Read full article Osborne faces up to productivity challenge

Don't be scared of deflation, yet

Poster in Walsall Market

A bit of history has been made with the disclosure that prices fell 0.1% in April - because the consumer price index has never before dropped since official records began in 1996.

And on an estimated basis, the last time we saw a price fall in the UK was March 1960, before even I was born, when there was a drop (probably) of 0.6%.

Read full article Don't be scared of deflation, yet

What Cameron wants from Berlin and Brussels

David Cameron with Lord Anthony Bamford (centre) 2014
David Cameron with Lord Anthony Bamford (centre) in 2014

The views of JCB, one of the UK's biggest manufacturers, are widely seen to carry weight among ministers, because its owners, the Bamford family, are one of the Tory Party's top donors.

And as a British exporting success, what it says on how to win in export markets should probably be heard more widely (and see more on this from my colleague Kamal Ahmed).

Read full article What Cameron wants from Berlin and Brussels

Interest rates would be higher without immigrants

Mark Carney

There seems to be a bit of confusion about what the Bank of England and its governor said about the economic impact of migration.

First things first.

Read full article Interest rates would be higher without immigrants

Bank expects weaker recovery

Bank of England

The Bank of England is less optimistic about our recovery than it was in February.

It has revised in a downward direction its projections for the belated recovery in GDP, productivity (or output per hour worked) and living standards.

Read full article Bank expects weaker recovery

GE2015 and the economy

Samantha and David Cameron entering 10 Downing Street, 8 May 2015

Sterling is up (the most for seven years against the euro), share prices are up (especially bank shares like Lloyds and RBS, and energy shares such as Centrica), government bond prices are up.

To state the obvious, investors love the Tories' general election victory.

Read full article GE2015 and the economy

An election that really matters

Millennium wheel

The conventional view among my media colleagues, who are these days often called the commentariat, is that the general election has been dull, the parties' campaigns mediocre and the choice one of Hobson's.

I could not disagree more.

Read full article An election that really matters

How vulnerable would new UK government be to Grexit?

Greece

For all the hour-by-hour reports that talks between Greece and its eurozone creditors are going better (as is said to be the case today) or worse, the working assumption in the UK government (in its dying days) is that Greece will leave the euro.

Why?

Read full article How vulnerable would new UK government be to Grexit?

Has Miliband said a proper sorry?

Ed Miliband

This morning on the Today programme, Ed Miliband prayed in aid Sir Nick Macpherson when repeating his view that the big economic mistake of the last Labour government was a failure to regulate the banks properly, rather than to spend too much.

Sir Nick is the Treasury's permanent secretary, the second most powerful civil servant in the land and the person on whom George Osborne as chancellor relies most for fiscal counsel and the execution of his policies.

Read full article Has Miliband said a proper sorry?