It’s all about the wages, stupid

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Yesterday’s good news: the reason the Bank of England increased interest rates is because it thinks the growth in your pay packet is about to start picking up. The bad news: it doesn’t think they’re going to pick up very far because we’re just not very good as a country at improving how we produce … Continued

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Helping or hindering? The latest on Help to Buy

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Housing, Wealth and Debt

When Sajid Javid announced last month that the government would allocate a new tranche of money to the Help to Buy (HTB) programme he claimed that this would enable “people to make their dream of owning a home a reality”. But is this expensive policy really doing ‘people’ any favours? When HTB was introduced in … Continued

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Crunching the numbers on today’s rate rise

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Public Finances and the Economy

Interest rates are up. It may be a very modest increase but, for any number of reasons, the news is big. Ten years on from the last rise, today’s 0.25 percentage point increase in the Bank’s base rate (taking it back to the 0.5 per cent it sat at between March 2009 and August 2016) … Continued

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The rate rise debate should prompt wider questions about the living standards impact of monetary policy

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Public Finances and the Economy

Tomorrow the Bank of England is expected to raise interest rates for the first time in a decade, kicking off the first tightening cycle for monetary policy in 14 years. Whether or not the Bank’s Monetary Policy Committee behaves as markets anticipate, the expectation has triggered two big questions. First there is the macro question … Continued

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The national living wage has caused the biggest fall in low pay in 40 years – but how is this improving people’s living standards?

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Jobs, Skills and Pay

Employment is at a 40-year high, while pay is stagnating. That, in brief, sums up the last few years of changes in Britain’s labour market. As Figure 1 shows, politicians rightly highlight that employment and unemployment are undeniably trending in the right direction. But the good news on employment has failed drastically to translate into … Continued

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