Aljazeera’s Mehdi Hasan invited me to join former financial regulator Lord Adair Turner, venture capitalist John Moulton and SOAS’s Professor Costas Lapavitsas in a debate about whether capitalism had failed the world.
I was asked by the Observer’s economics editor, Heather Stewart to submit a memo to Mr Carney on on 30 June 2013, the day before he takes up office as governor of the Bank of England.
The link here will send you to the Observer’s page with contributions from Lord Myners, Danny Gabay, Andrew Sentance and Pat Mcfadden MP. (Unfortunately in the printed edition the Observer described the 2068 gilt as a five year bond. It is of course fifty five years as corrected in the post below).
“Last week the UK’s gilt market suffered heavy falls and a rise in yields, as a result of turmoil caused by the Federal Reserve’s decision to drop long-term calender guidance on the direction of interest rates in favor of a new, less predictable outcome: the 65% unemployment threshold. Continue reading… ›
I was asked to prepare and record this note to Mr Carney which was then not broadcast. Nevertheless I’m posting it here for the record.
“Welcome Mr Carney to a Britain chilled by both the jet stream’s change of direction, and by the Federal Reserve’s sudden shift in monetary policy.
The impact of this shift on nervous global capital markets has been dramatic. Yields on longer-term UK bonds have reason since May, and will push up rates on mortgages and other debts. Continue reading… ›
This article originally appeared on IPPR. Click here to read it in full.
Welcome. I write to urge you to cool expectations that Britain can live by monetary policy alone.
Our political establishment is reluctant to discuss this in public, but Britain ranks alongside Japan as the most indebted of the larger economies. McKinsey estimates UK private debt at an extraordinary 427 per cent of GDP, vastly exceeding gross public debt at 94 per cent of GDP. By contrast, American private debt is half the UK’s, at 198 per cent of GDP. Continue reading… ›
(Photo Source: Kirsty Wigglesworth/AP, via the Guardian)
Following last Friday’s Transforming Finance Conference, the Guardian’s Heather Stewart interviewed me and other participants about the best ways to fix the UK banking system. Read her article below, or as originally published.
George Osborne and Vince Cable have tried cajoling, coaxing and bribing Britain’s banks to lend more to businesses and help rebuild the economy. Yet the latest official figures show lending to firms still falling, while the reputation of the banks has continued to be undermined by scandals from Libor-fixing to money-laundering. And despite a forest of new regulations and reforms, many officials privately believe that if it came to the crunch, any future chancellor would have little choice but to bail out a big bank that fell into distress.
Last Friday, I was invited to speak at the Transforming Finance conference held in London, organised by Positive Money, along with Friends of the Earth, the New Economics Foundation, the Finance Innovation Lab, ResPublica, Civitas, Fair Pensions, and the World Development Movement. The conference brought together academics, campaigners and financiers to look for ways to build a better banking system. The Guardian produced a video about the event; click above to open the video.
I was invited to take part in a debate asking “The City and the Common Good: What kind of City do we want?” organised by St. Paul’s Institute and CCLA on Tuesday, May 7. Speakers included economic historian Lord Robert Skidelsky, Tarek El Diwany of Zest Advisory LLP and Paul Sharma of the Prudential Regulation Authority. The debate was chaired by BBC Economics Editor Stephanie Flanders and attended by over 900 people. Watch the entire debate above.
Our mini-research on the UK’s postwar experience, is a modest test of the debt-austerity “thesis”. Using International Monetary Fund and Office for National Statistics numbers for 1949-2011, we found that UK gross domestic product increased at its fastest average rate – by 3.19 per cent – during the 18-year period (1949-66) when the debt-to-GDP ratio was more than 90 per cent (and mostly way over 100 per cent). This compares with an average of 2.60 per cent for the 36 years when the ratio lies between 30 and 60 per cent. For the other nine years (60 to 90 per cent), the average is 1.93 per cent.
What is more, during the 18 years when the debt-to-GDP ratio was more than 90 per cent, that ratio fell every year without exception. We do not, of course, seek to argue from this that a high debt-to-GDP ratio leads to, or is associated with, higher growth. We simply note that increased economic activity will tend to shrink the debt-to-GDP ratio, while falls in economic activity tend to increase it.
Ann Pettifor and Jeremy Smith, Directors, Policy Research in Macroeconomics, London NW1, UK
The simple truth unpalatable to Eurozone authorities is that small peripheral EU economies and even big economies like Spain and Italy, are victims, not designers of the liberalised financial architecture that was built way back in 1992, repeating earlier twentieth century failed experiments that led to financial crisis, immiseration and war. Continue reading… ›
Margaret Thatcher’s economic legacy was prompted by the 1976 Labour government’s capitulation to the IMF – but she took it much further.
It is ironic that Margaret Thatcher’s funeral is to take place at St. Paul’s in the City of London. The world around Wren’s great monument is beginning to unravel as a result of the liberalisation forces she helped unleash. Banks are bankrupt, thousands of jobs lost, and the City’s hard-won reputation for honour and fair play is now in tatters. Continue reading… ›