It’s official the UK entered into recession last year with GDP falling over a period of six months. However, with only a 0.4% fall in GDP some argue the recession is relatively mild. But, if we look at real output per capita, the UK economy has been declining for the past eight quarters. Two year of declining income per person. It will be the first parliament to experience falling incomes since the great depression. And this chimes with the experience of the average workers who might have felt like they were in a recession before it was officially proclaimed. I want to explain why this re ..read more

Iss the UK broke? How much can the government borrow? Has the government run out of  money? Firstly, how does the UK compare to other countries? The UK is not alone in running government debt close to 100% of GDP. But, it is still nearly double European countries like Norway and Ireland. But, this graph also raises the question – how come Japanese debt is 250% of GDP, but interest ratres are close to zero. But Argentina at 89% of GDP have defaulted five times in the past sixty years. The truth is the amount you can sustainably borrow depends on many factors we will explain soon. But als ..read more

  From the mid 1990s, the buy-to-let sector saw impressive growth. By 2016, 2 million individuals owned a buy to let property. But, recent events have seen a sharp decline in buy-to-let mortgage lending. It is shrinking as a share of the market to levels last seen in the credit crunch. Recent legislation and budget changes has increased the incentive for private landlords to sell rather than buy. But with the private rented sector expected to see rapid growth in the coming years, why are many individual landlords planning to leave the sector, just as we could do with more rented housin ..read more

Q. Is there hope for the UK economy? There is hope for the UK, despite very poor past 15 years, it is still a moderately wealthy country, with reasonably basic economic institutions. We are not in the same league as Latin American countries with chronic bouts of hyperinflation. Economies are also more resilient than we tend to give credit. One argument is that if you fall behind, it should be easier to catch up because there is more growth potential. The UK certainly has lost a lot of potential Having said that 10 years ago, I had a similar optimism that the UK economy would soon improve a ..read more

For three decades, the Chinese economy boomed, transforming itself into the world manufacturing hub. Up to 70% of suppliers on Amazon rely on Chinese supply chains. Buy any electric good and it’s likely to say ‘Made in China’. But, the Chinese economy is in crisis. A property collapse has seen prices fall and flats remain unfinished. Combined with Covid lockdowns and political meddling, Chinese consumers have lost confidence and reduced spending.  There has been a decline in savings, falling wages and rising youth unemployment. The result has been deflation with prices falling throughout ..read more

The US is one of the richest economies in the world – with the 7th highest real GDP per capita. Not only that but the economy is booming with much higher rates of economic growth than elsewhere. However, in the real world, there is a disconnect, despite the undoubted wealth of America, many Americans feel poor – an economy rigged against them, living from paycheck to paycheck and worried they could be just one medical bill away from bankruptcy. How can an economy that is doing so well, be failing to give economic security to the majority of Americans? In the past few decades, America has bec ..read more

Since the financial crisis of 2009, the UK economy has experienced a real decline in economic fortunes. Last month, we entered a recession, but real GDP per capita has been stagnating for a decade. This poor economic performance is creating its own spiral of problems-  rising debt, low investment and creaking public services. Recent budgets which sort to boost short-term growth, have fallen flat. The UK has become racked with short-termism, flip-flopping on policy and poor decision-making. The JRF report that on current trends the average household is at risk of being nearly £1,300 worse ..read more

After a sharp increase in the 1980s, income inequality appears to have slightly improved in recent years. However, this general measure of inequality fails to capture many of the increasing divides across the country. Whilst the income share of the top 1% has grown, the poorest 10% have faced falling living standards in a cost-of-living crisis that has been unequally felt. We will also explain why the UK is increasingly divided by geography, take out London and the south-east and the UK is one of the poorest regions in Europe, worse off than the poorest US state Mississippi. What’s going on w ..read more

Last week the UK economy slipped into recession. But, was it avoidable? Why are interest rates not coming down when households are facing the greatest squeeze on incomes for a generation? Although inflation is falling it is still above the inflation target, but it is a mistake to prolong a recession, when inflation is expected to fall anyway? The first problem the Bank of England faces is that the economy is in a dire state. Average real GDP growth has barely managed 1% in the past 12 years, take away population growth, and average real GDP growth per capita is barely increasing at all. When ..read more

  The UK is in recession, but the real story is 13 years of stagnant wages. 0% growth in real wages is unprecedented in the post-war period. This period of flatlining growth is leading to higher taxes and fewer public services. It is an unwelcome cycle of low growth, low investment and increasing pessimism. But how bad really is the UK economy, is there any hope on the horizon? The UK treasury is keen to point out the UK real GDP growth is not too bad. But, this statistic is misleading because most the growth in GDP comes from a rise in the population. In the past two decades, propelle ..read more