Why the economic picture tends to be rosier than initial estimates suggest
One of the surprises of last week was the Office for National Statistics (ONS) estimate of economic growth in the second quarter of 2016, the period from April to the end of June. In the run up to Brexit, the economy expanded by 0.6 per cent on the first quarter of the year. This was […]
The poor state of macro justifies scepticism with Brexit disaster forecasts
David Cameron has tried to frame the Brexit debate into one based on economics. Standing with him is the overwhelming consensus of economists themselves, from academics to the International Monetary Fund (IMF). Their pronouncements are not having that much impact on the electorate if the polls are to be believed. There is justification for this […]
The coming explosion in natural debt is a serious risk to the economy
Martin Feldstein of Harvard is an economist who should always be taken seriously. Writing in 1997 about the forthcoming introduction of the euro, for example, he argued that “the adverse economic effects of a single currency on unemployment would outweigh any potential gains from trade flows”. He went on to predict that the euro was […]
Is Britain on the edge of recession? History is an unreliable guide
Concerns are growing about a marked slowdown in the UK economy. The Lloyds Bank purchasing managers’ index, for example, fell to 52.1 in April, its lowest point since 2013. The initial estimate for GDP, total output, in the first quarter of this year shows an increase of just 0.4 per cent on the final quarter of 2015. […]
from golf to GDP, why unlikely events confound forecasters
Life imitates art, as the sporting world has shown this week. The Grand National was won by a horse which had never previously won a steeplechase. The US golf Masters was won by Danny Willett, who nearly did not take part at all because of the birth of his son. With only nine of the […]
Are the markets telling the truth?
The opening month of 2016 has been marked by sharp falls in asset prices, not just in financial markets but in commodities such as oil. The conventional wisdom is that the markets form a rational assessment of future prospects for the economy, and set prices accordingly. So if prices fall, we should be downgrading our […]
No more whingeing, please. The recovery is solid.
Last month saw some very positive economic news. The US Federal Reserve raised interest rates for the first time in over seven years. The Bank of England reported on the major stress test of UK banks which it launched in March 2015. It concluded that “the banking system is capitalised to support the real economy […]
It is not just the Euro. Southern Europe faces a major structural crisis
Major shocks to social and economic systems ruthlessly expose weaknesses which can be contained in more normal times. When the price of oil quadrupled in 1973/74, the different levels of resilience in the labour markets of Western Europe were quickly revealed. Inflation initially rose sharply everywhere. By 1976, it had fallen to 4 per cent […]
Building with Certainty: Volterra’s Ellie Evans presents on the macro economy and the outlook for property
On 15th October Volterra partner Ellie Evans spoke at Strutt & Parker’s Development & Planning breakfast seminar ‘Building with Certainty’. The event was attended by over a hundred property professionals and covered a wide range of topics from political stability to development funding and city investment. Ellie opened the event giving a presentation on the […]
Integration won’t save the struggling Eurozone
Olivier Blanchard, the recently retired Head of Economics at the International Monetary Fund, has something of a track record with his predictions. In 2013, he warned George Osborne that he was “playing with fire” with the UK’s recovery from the financial crisis. Austerity had to be relaxed. We now know that we were actually nowhere […]
