Edward Smythe
To better understand UK banks we have to follow the money
25 November, 2017From how UK banks create money to how they managed to lose so much of it in the last crisis, there are some persistent misconceptions that must be challenged. A bank’s privilege is not only its ability to create credit but also its ability to take deposits which are guaranteed by the state. With this [...]
The Bank of England’s depiction of inequality data is dangerously misleading
19 October, 2017In an important speech in Liverpool in 2016, Mark Carney defended the Bank of England (BoE) against the charge that QE has caused inequality to worsen. He posed the question ‘has monetary policy robbed savers to pay borrowers? Has the MPC been Robin Hood in reverse?’ But his answer was emphatic: ‘In a word, no.’ [...]
The UK economy is hooked on rising asset prices. What happens when the bubble bursts?
28 September, 2017UK household real wages have just experienced their worst decade since the 1860s, and are still falling. A concern is building that a private debt crisis might threaten the UK economy. In a piece for the New Statesman, David Graeber warned ‘we’re staring into the lights of an oncoming train’. It’s certainly true that UK [...]
Britain 2018: We’ve never had it so bad
16 August, 2017Last December, in a Bank of England (BoE) speech entitled the ‘Spectre of Monetarism’(1), its governor Mark Carney said that ‘over the past decade real earnings have grown at the slowest rate since the mid-19th Century’. To evidence this statement, the BoE published the chart below: Unfortunately, since this speech, things have deteriorated. Today’s ONS [...]
Rising asset prices are keeping the UK economy afloat. But what will happen when they pop?
19 July, 2017The Office of Budget Responsibility (OBR) - the government’s fiscal watchdog – has released a ‘Fiscal Risk Report’. Positive Money welcomes its in-depth analysis, but we are concerned with its central findings. In the OBR’s ‘base-case scenario’, in which UK GDP growth rises from 1.6% this year to 2.0% by 2020, UK households must spend significantly [...]
Alarming data casts grave doubt on the sustainability of the UK’s economic growth
5 July, 2017UK households are saving less than they ever have. The latest ONS data puts the UK household saving rate at just 1.7% in the first quarter of 2017 – the lowest rate since records began in 1963: Source: ONS data This 1.7% savings rate (£5.5bn/£318bn) is calculated as the percentage of UK household disposable income [...]