Blog & Articles

The ticking debt bomb?

Date: 2. May 2013
Matthew Whittaker

This blog originally appeared on Public Finance

When the financial crisis first hit, politicians of all parties talked up the notion of ‘rebalancing’ the economy, moving away from a growth model dependent on financial services, house price increases and consumption and towards one based on the real economy and on trade. Five years on and, with little sign of a sustained economic recovery, the chancellor appeared to wind the clock back in his last Budget.

The new Help to Buy scheme is designed to give a shot in the arm to the housing market, making it easier for households who are currently considered too risky by lenders to get onto and move up the housing ladder.


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What does the childcare announcement really tell us?

Date: 19. March 2013
Gavin Kelly

This post originally appeared on Gavin's New Statesman blog

Before we rush to dissect the government’s new childcare policy it is worth pausing to reflect on the very fact that in an unprecedented time of austerity a Conservative-led administration is proposing to spend near on £1bn on childcare. There are all sorts of caveats and problems with the policy, when it will be introduced and how it will be paid for. But before we rush into all that we should note that today’s announcement confirms that the issue of childcare will remain at the centre of the political arena.

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Wage growth and distribution: can we be hopeful about the future?

Date: 7. November 2012
Matthew Whittaker

Look away from events in the US for a moment and you’ll find an interesting new release from the ONS highlighting trends in UK wage growth over the past 25 years. The headline points to average post-inflation hourly wage increases of 62 per cent since 1986, which looks fairly impressive and goes to the heart of our expectation that wages in the modern economy should be growing year after year.

The authors break the overall trend into a range of periods, centred around the recessions of the early-1990s and late-2000s. This enables them to show that wages behaved very differently during the most recent downturn: falling in real terms rather than merely slowing down as they did between 1989 and 1993. It’s a phenomenon we’ve looked at before and appears to owe much to a shift in the relationship between unemployment and real wage growth that took place over the last decade.

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