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In the News

UK economy might be facing the darkest hour

Graham Watson

13th January 2021

The Governor of the Bank of England has sounded a cautionary note - suggesting that the economy is facing its "darkest hour" after the introduction of a new lockdown.

Economic problems are mounting up - as growth slows, and a double-dip recession seems inevitable, there are very real fears about unemployment. However, contrary to what other members of the Monetary Policy Committee are saying, he's talked down the immediate prospect of negative interest rates.

Are negative interest rates on the way?

Such is the scrutiny of the Bank of England that Silvana Tenreyro's speech to students at the University of the West of England has caused quite a stir, in that she made a case for the Bank adopting negative interest rates.

This is not to say that it's going to happen, but it's certainly one of the policy alternatives on the table. And it also tells you something about the extent to which the machinations of the Monetary Policy Committee are subject to external scrutiny.

Will the UK economy get worse before it gets better?

The road is long, with many a winding turn..." as the Hollies once sang, and Rishi Sunak reprised here.

But he can't save every job, or business, and the furlough scheme is to continue. But today's announcement was more of a holding brief whilst the Treasury attempts to figure out what to do next.

Record number of small businesses set to fail

A worrying revelation from the Federation for Small Businesses (FSB), with the news that a record number of them could be on the point of closing.

This would be bad for the UK economy, and might get you thinking about those reasons why small businesses are so important - as engines of growth, as innovators, and as a testing ground for entrepreneurs, among other things. I wonder how many more factors you can come up with?

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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