As pressure builds on Rachel Reeves to relax or shift her self-imposed fiscal rules, the Q. is whether she is one of those people who respond to pressure by doubling down on the criticised decision.

As so often (as Modern Monetary Theory adopts are no doubt screaming), the idea that the state could create credit (as with Quantitive Easing in 2008 onwards) is being ignored... if ever there was a time for the idea of a People's QE, now is that time!

#economics #austerity

https://www.theguardian.com/politics/2025/mar/15/economists-urge-rachel-reeves-to-bend-fiscal-rules-instead-of-cutting-welfare

If tariffs end up harming the importer's economy as much as the exporter's (as many economists argue, by virtue of their impact on inflation & the slowness of likely import substitution activity), then Trump's tariffs look likely to be felt hardest in the mid-West.... which is not going to do his popularity much good (but on the other hand as he will not face election again, he may not care).

I know I sound like a broken record, but reading comments today on the slight drop in UK GDP in January, I've seen:

cost pressures allied to employers NI rises;

cost pressures due to changes international markets;

rising energy prices;

new green levies.

But when interest rates are mentioned we're led to believe that's about market views of UK public debt.

Why isn't anyone mentioning the explicit policy of the BoE to engineer a recession to 'control' inflation?

#HeadInMyHands
#economics

At the root of many contemporary economic problems (the UK's productivity puzzle, deterioration in the terms & conditions of employment) is one simple issue:

Managers too often see workers not as a 'resource' to be invested in & nurtured for the long-term good of the organisation, but rather as a cost which can be reduced for short-term gain while the longer term consequences will be fixed (in some way) by technology.

The de-humanisaton of economics is a major problem!

Yet another #Trump "success"

"U.S. stock market loses $5 trillion in value in three weeks"

#Canada #NAFTA #Tariffs #TradeWar #USA #Mexico #EU #Europe #NATO #News #Democrats #Enemy #MAGA #Fascism #Currency #Economics #Finance #Oil

https://www.cnbc.com/2025/03/14/us-stock-market-loses-5-trillion-in-value-in-three-weeks.html

Tesla - a canary in the mine for the US?

http://archive.today/2025.03.07-174900/https://www.ft.com/content/809cd697-8f3e-459a-bb2f-82754282ace5 (archive)

‘But even if Musk himself were not so polarising, the company’s share price has become “completely divorced from the fundamentals”, as a JPMorgan analysis put it barely a month ago. What’s more, the reasons that Tesla’s brand has become so tarnished overlap with the larger decline of America Inc.’

If regional banking is the answer to centralisation of financial services in London, then the proposed North West Mutual (a self-professed 'ethical' bank), backed by Preston City Council and to be based in the city, looks interesting.

Focussed on services to individuals & small business, it would add a financial services element to the ongoing Preston Pound project.

Although not expected to be in business until at least 2026, this looks like an interesting development!

#economics
h/t BBC

More evidence of a stagnating economy as GDP fell by 0.1% in January.... if ONS data its reliable, which is less than clear.

I'll make the point I've made before:

The sado-monetarists at the BoE/MPC have been trying to constrain economic activity to 'squeeze' inflation out of the system for over two years.

Anyone seeking to lay this slowdown completely at the feet of Labour is intending to distract from the BoE's explicit policy of economic disruption via high(er) interest rates!

Despite the single market significant impediments to intra-EU trade remains. As Isabelle Mateos y Lago (BNP-P) suggests, an increase of less than 3% of this trade would make up for a 20% drop in trade with the US (due to US tariffs) as the EU is, also its own largest trading partner!

For instance, mutual recognition of other members rules on goods & services alongside some further coordination of VAT rates would likely (relatively quickly) make up for loses in US trade.

#economics #EU
h/t FT

I wonder if Rachel Reeves delay on trying to get people to switch out of their cash ISAs into stocks & shares ISAs has anything to do with their relative returns in the first 10 weeks of this year.

So, cash ISAs have continued to accrue returns for savers, but stocks & shares ISAs, not so much (having likely moved into negative/shrinking territory), and for now making a mockery of the financial services position - and talking about long-term returns won't really soften that blow!

S&P 500 experiences rare 10% drop in three weeks, with historical data suggesting potential rebound despite ongoing tariff policy uncertainties
#YonhapInfomax #SP500 #SharpDecline #MarketRebound #TariffPolicies #BespokeInvestmentGroup #Economics #FinancialMarkets #Banking #Securities #Bonds #StockMarket
https://en.infomaxai.com/news/articleView.html?idxno=54005

https://www.newsweek.com/us-housing-market-shortage-prediction-2042732 “The reason why new construction finally outpaced new household formation is sobering: at least 1.6 million expected Gen Z and millennial households did not form in 2024 because of factors which included a lack of affordable housing. In short, people are not settling down and becoming homeowners because they can't afford to.” #housing #shortage #poverty #inequality #economics #parenting

We can have one of two things — but not both.

We can either have a society that tolerates (celebrates?) millionaires and billionaires polluting the planet and destroying the biosphere...

Or we can have a planet with a healthy biosphere but with fewer millionaires and NO billionaires at all.

Your choice.

“If there is a useful and relevant political science literature on the processes through which random social media memes are becoming the basis for dramatic changes in U.S. governmental structures and policies, I’d love to see it.”

- @himself.bsky.social reviews Chris Hayes’ new book on our dysfunctional attention economy

https://www.programmablemutter.com/p/the-attention-economy-is-devouring

Does the UK have an industrial strategy?

Its often asserted that successive Govts have not been helpful to business or stood in the way of economic development; taken as proof that the UK lacks an industrial strategy.

But, look at this & previous Govt.s attitude to financial services (bowing to its lobbying for either lighter regulation or preferential tax treatment) & what you see is the UK's successful industrial strategy.

The problem is its focussed on financial services!

As a trade war moves from commentary to reality (both in North American & across the Atlantic) with countries adopting counter-measures to the tariffs imposed by the USA, we are entering a social science experiment that we are all part of.

Economists regard free trade as an absolute good & as such tariffs hurt the countries imposing them as much as the targets.

Past trade wars have prompted global slowdowns; will is be different this time?

we're about to find out!

Trump's #DOGE initiative accelerates a 50-year trend of government privatization. Government contracting reached $1.98 trillion in 2023, 7% of the total economy.
#economics #ElonMusk
https://buff.ly/Tnna2OI

Legislation to allocate ~$100 billion of taxpayer money (roughly 8 aircraft carriers or 12% of the entire US defense budget) to buying #bitcoin has been reintroduced by Senator #CynthiaLummis.

(Unstated: Lummis is trying to pump the bitcoin market which has been crashing in the aftermath of Trump only committing to not selling $20bn worth of bitcoins seized from criminals when the market was pricing in a massive government purchase)

(Also unstated: Lummis owns a lot of bitcoin, so she’s nakedly attempting to use taxpayer money to enrich herself)