Category: Economy

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Broken leg or heart attack? Cable and Koo on the state of the economy

Vince Cable has often used the analogy of an economic heart attack to describe the problems of the UK economy since 2008.

I’ve just got back into reading economist Richard Koo’s excellent book “The Holy Grail of Macroeconomics“ where he offers another analogy: the broken leg:

During a balance sheet recession, the problems resulting from too little fiscal stimulus are far more serious than those caused by too much. The latter are similar to walking with a cane even after a broken leg has healed; the former to walking, or even running, when the bone has yet to mend.

Richard Koo, The Holy Grail of Macroeconomics: Lessons from Japan’s Great Recession, Wiley Singapore, 2009, p. 67

Given the lousy state of our economy, the analogy seems all too apposite. The case is getting ever stronger for Vince’s Plan A+.

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Economy Latest News

Vince Cable visits Alresford

Vince Cable, Liberal Democrat Shadow Chancellor, visited Alresford on Monday, March 8, to meet local businesses.

Vince Cable visits Alresford
Vince Cable and Martin Tod meet John Sole of Sole Butchers. (Photo: Alick Cotterill)

Accompanied by Liberal Democrat Prospective MP for Winchester, Martin Tod, Mr Cable visited the Alresford Gift Shop, both the town’s butchers – C.E. Evans & Son and Sole Butchers, the Alresford Builders Merchants and the Alresford Cobbler before finishing with a cup of coffee in Caracoli.

Mr Cable visited the town after speaking at a conference on the “Hampshire’s Road to Recovery” held at Intech.

Martin Tod commented:

It was great that Vince had the chance to meet local businesses and hear about how the recession has impacted them and also about the treatment they’ve been getting from the banks. Because we’re a relatively prosperous part of the country, some people assume that we’ve been unaffected, but that certainly isn’t the case for everyone. It’s vital that we get economic policy right if we are not to be thrown back into a deeper recession.”

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Civil Liberties Economy Environment Privacy Video

The Last Word on Damian Green, the economic & environmental crisis & the Queen’s Speech

Just over a week ago, I took a break from our one week holiday and went to the ITV Millbank studios to record an episode of ‘The Last Word’ for ITV Meridian.  The whole thing was shot in half an hour – we discussed Damian Green, the economy and the Queen’s Speech – and the attached is the result!

[media id=16 width=448 height=252]

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Economy Energy

Gas prices: BBC Radio 4’s FileOn4 reports

Further to my earlier blog post on British Gas, BBC Radio 4’s FileOn4 has reported on some of the other shenanigans the gas companies are getting up to.

According to the show:

Former Energywatch chief executive Allan Asher told BBC File On 4 that annual bills of around £1,200 could be cut by a third or more.

You can listen again and read more via the FileOn4 website or read a transcript of the programme here.

Updated on July 1, 2009 – podcast link no longer available

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Economy Energy Inflation

British Gas – hiking up direct debits

There’s been a lot of media interest in the problem of British Gas’s direct debit hikes.

[MEDIA=14]

Almost all the people who responded to my email survey were facing increases far above both the 35% reported in the press and the 42% increase for direct debit customers reported by the Telegraph. The average figure was 81%.

The dramatic increase in interest income from British Gas parent, Centrica plc, suggests this is a deliberate strategy – building up cash balances to make money on interest. Since 2006, the interest income declared in their accounts has gone through the roof – doubling from £40 million in 2006 to £83 million in 2007. Interest in their interim accounts for first six months of 2008 (£43 million) is 54% higher than the £28 million interest income reported for the first six months of 2007.

I’d be amazed if it was just a Winchester problem and am interested in finding out who else has the same problem. Please feel free to email me with details at martin@martintod.org.uk or use the form below.

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