Anguished of Edinburgh
The BBC’ Business Editor Robert Peston offered a rapid fire tutorial in the credit crunch in his address to the Edinburgh Book Festival today. Some people have perhaps unfairly labelled him as “Pessimistic Peston”, the man who first revealed the state of the liquidity crisis at the Northern Rock in early September 2007. But he delivered an engaging and witty talk to a large group of the well heeled of Edinburgh who clearly have weighty financial issues on their minds.
read more...»Word of mouth and feedback loops
The courtyard of the Pleasance at the Ediinburgh fringe is a great place to observe the impact of feedback loops in shaping consumer preferences.
read more...»Price gouging in Edinburgh
Jimmy Chung’s in Edinburgh occupies a prime location between Waverley Station and Prince’s Street - it appears to thrive on a fast flow through of customers eager for a quick fill of chinese food - it needs the high footfall to pay what must be a hefty rent. An obvious approach is to engage in some price gouging - serving fixed price meals at different prices according to the time of day - all prominently displayed as shown. I will use this with my introductory Economics students in a few weeks time.
read more...»Anatomy of previous UK recessions
Every recession is different - both in terms of the initial causes and also the differential impact that it has on consumers, businesses, industries and regions. Deutche Bank’s latest UK economic forecast is pretty gloomy - they are now pencilling in economic growth of just 1.2% in 2008 and 0.3% in 2009. House prices are now expected to fall 25% in nominal terms (35% in real terms) from peak to trough.
In their research they produce a rather natty chart showing how quarterly growth rates of the various output and expenditure components of GDP have behaved during previous UK recessions. On average the level of real national output declines by 0.7% for each quarter of a ‘technical recession’ - but capital investment tends to fall by much more - it might be worth asking students why this happens? Why - on the basis of previous experience - does the industrial sector seem to bear the brunt of recessionary conditions? Why does government spending continue to rise and that of the farm sector?
If a recession happens in 2008-09 - which industries are most likely to feel the full force of the decline in real activity? Presumably construction and financial services will be badly affected - from where I am sat in an Edinburgh hotel at the peak of the Festival season it looks like the tourism and leisure industry is also having a rough ride too!
Beanscene battles to avoid being a has-bean
The BBC reports that one of Scotland’s fastest growing coffee houses has gone into administration as bottom-line losses became unsustainable. Beanscene’s 14 shops are spread across Scotland from Ayr to the border town of Hawick to the old town in Leith.
read more...»Le Crunch Hits the Fringe
Collapsing consumer confidence, increasing competition from other live events across the UK, high ticket prices, dreadful problems with the online ticketing system have all combined to hit ticket sales for the Edinburgh Fringe this August and remarkably there are still many city centre hotels with spare rooms with the Festival just a fortnight away. Normally the month of August is the cue for hotels and B&Bs to hike up their prices to silly levels to take advantage of the influx of people staying for the festivals. But this year things look to be different ...the Scotsman reports that “Hotel and guest house bookings for this year’s Festival are at an all-time low for this time of year....and… Dozens of private flats are still being advertised as available to rent on the Fringe’s website”
My week in Edinburgh for the fringe is always one of the highlights of my year, maybe it will be a little easier to get a table for supper in 2008 and perhaps I should have played chicken and delayed booking hotel rooms!
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