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In the News

Aggregate Demand - Is the Age of Consumption over?

Graham Watson

14th February 2022

Is the age of consumption over? This Guardian article provides some background.

Andy Beckett wonders whether the current cost of living crisis spells the end for a borrowing-fuelled consumer expenditure boom that has, for the most part, driven the business cycle over the last 40 years.

It's a nice little aside to look at recent economic history and consider what's left if it does disappear.

UK employers expecting to award pay rises of 3% this year, survey shows

Given the tightness in labour markets, it's self-evident that wages are going to rise, with a YouGov survey suggesting that the rate of wage growth is going to reach 3% for the year, at least in part because recruiters are struggling to fill the existing vacancies.

Of course, this would represent a decrease in real pay, given high inflation

Tory government’s ‘tax by stealth’ will hit under-30s on low wages hardest

This article highlights an issue that I'm passionate about - intergenerational equity - highlighting how so-called stealth taxes are about to rise on the under 30s. This is something that I've already scooped about in the past week but it's worth another look just to remind yourself about how the government puts the interests of pensioners ahead of almost every other group, if only on the basis of the fact that they vote with greater frequency than other sectors of the population.

It’s not quite the Black Death, but worker shortage hits UK firms hard

This fantastic Observer article compares the impact of coronavirus on the UK labour market with the effect of the Black Death. It essence, it's an extreme example of how markets operate at a time when demand exceeds supply, and as a result many sectors are experiencing labour shortages. As a result, there are record numbers of job vacancies, workers are - relatively-speaking - in a stronger position that they've been for a while and wages are rising but not keeping pace with inflation.

And whilst longer term, there's the expectation that unemployment is going to pick up - it's likely to fall to 3.8% in the first quarter of this year.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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