All Change at The Bank?
Tomorrow's Financial Times leads with a headline, "Osborne to hand Carney powers to kick start the economy." Budget to alter Bank of England's remit...Loser Monetary Policy."
Vince Cable the Business Secretary provides an outline in The New Statesman of the economic problems the current coalition government has faced, how monetary, fiscal and supply side measures might be used to stimulate the UK economy in response to what he calls the long economic stagnation of post-crisis Britain.
The FT implies that The Chancellor is not wholly convinced by arguments from Vince Cable to boost growth with a new programme of infrastructure spending on schools, roads and housing, funded by extra borrowing. The arrival of Mark Carney at The Bank of England may signal a sea change in how monetary policy is used to stimulate the economy, breaking with the 2% inflation targeting approach. The MPC may be encouraged to focus on targets for inflation and employment. Some of The Committee's members support more quantitative easing whilst The Deputy Governor Paul Tucker said the idea of negative interest rates should be considered.
Link to coverage of Cameron's Speech http://www.guardian.co.uk/politics/2013/mar/07/david-cameron-rules-out-extra-borrowing
The Economist wades in with an analysis of why the slump in consumer spending has contributed to a flatlining economy with low or barely perceptible growth. Household saving has increased to c.7%. Falls in real wages, coupled with rising 'administered prices' of gas and electricity have also helped lower consumption. But the cycle of higher costs and prices isn't helped when Sterling depreciated by 6% in the course of the New Year.
Other useful articles on the case for a growth and the difficulties of turning on the taps with additional infrastructure spending are considered.
blog comments powered by Disqus
AS & A2 Economics Revision / Exam Coaching Workshops Coming Up:
Monday 11 March 2013 - Portsmouth (Vue, Gunwharf Quays)
Wednesday 13 March 2013 - Fulham (Vue, Fulham Broadway)
Thursday 14 March 2013 - Stratford City (Vue, Westfield)
Friday 15 March 2013 - Bristol (Vue, Cribbs Causeway)
Monday 18 March 2013 - Birmingham (Vue, Star City)
Tuesday 19 March 2013 - Manchester (Vue, Salford Quays)
Thursday 21 March 2013 - Newcastle (Odeon, Metro Centre)
Friday 22 March 2013 - Leeds (Vue, The Light)
Monday 22 April 2013 - Stratford City (Vue, Westfield)
Join over 10,000 Economics teachers who receive our regular Economics Teacher Resource Newsletter:
