Reports of the death of cash are greatly exaggerated

Monday Briefing receipt
Spending money just keeps getting easier. Internet shopping, electronic bank transfers, contactless and mobile payments are increasingly popular ways of spending. Last year the number of contactless payments tripled in the UK and on-line shopping rose nearly 20%. Digital versions of traditional central bank currencies are in the ascendant in the West.

These digital central bank currencies face growing competition from the private, all-digital, so-called cryptocurrencies. Bitcoin, established in 2009, is the dominant player, but the rash of new currency launches or ‘initial coin offerings’ means it has plenty of imitators.

At the heart of bitcoin is the blockchain, an anonymous, electronic record of all bitcoin transactions. Transactions are processed by a distributed network, not through the banking system as with central bank currencies.

Some bitcoin users distrust banks and want to operate outside the traditional banking network and financial system. Bitcoin’s anonymity appeals to libertarians, those who particularly value privacy and, of course, criminals. Some fear that central banks, with their ability to create money at will, cannot be trusted to maintain its value against inflation. These users see bitcoin, with a fixed ceiling of 21 million of issuance, as a better store of value than pounds or dollars. Finally, the vertiginous rise of bitcoin this year suggests that many see bitcoin as a quick way of making money.

Bitcoin excites different reactions. China, Russia and a number of other countries have put obstacles in its way. Murky governance and its potential as an anonymous means of payment for criminals worry many. The CEO of JP Morgan, Jamie Dimon, has branded bitcoin a “fraud” which will blow up.

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Posted on 13/11/2017

Mr Trump’s first 12 months - Political fireworks, steady as she goes on the economy

Monday fireworks
This Wednesday marks the anniversary of Donald Trump’s election victory, one of the most surprising and unexpected in US history. A year on we reflect on what effect the new president has had on the US economy and financial markets.

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Posted on 06/11/2017

Commodities make a comeback

Oil Monday Briefing
Cheap money has driven a surge in asset prices around the world. The pries of equities and bonds are at record highs and in much of the world so, too, are house prices.

One class of assets that has been late to the party, and doesn’t look pricey, is commodities.

This broad category includes everything from agricultural products, such as rice, to base and precious metals and most energy sources.

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Posted on 30/10/2017

Tenth birthday edition

10 years Monday Briefing
The Monday Briefing reached its tenth birthday over the summer. This week’s Briefing offers some thoughts on the lessons we’ve learned and the errors and successes we’ve made along the way.

Perhaps the most obvious lesson is that the economy depends on a stable financial system. In getting this right before the crisis, and emphasising it in the Briefing, I can’t claim great prescience. The devastating effect of the bursting of Japan’s banking and asset bubble in the early 1990s provided me, and others of my generation, with a graphic illustration of the effects of a financial collapse.

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Posted on 24/10/2017

Deloitte CFO Survey Q3 2017 - Optimism bounces

Monday Briefing bright umbrella
A personal view from Ian Stewart, Deloitte's Chief Economist in the UK. Subscribe to & view previous editions at:

The latest Deloitte survey of UK Chief Financial Officers, released this morning, shows a rebound in optimism after the sharp decline in the wake of June's General Election. Perceptions of uncertainty have declined and are running at almost half the levels prevailing after last year’s EU referendum.

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Posted on 16/10/2017

Interest rates rises, slowly does it

Monday Briefing focus abstract
In four weeks’ time the Bank of England is likely to raise UK interest rates for the first time in ten years. The Bank’s Governor, Mark Carney, has gone out of his way to signal that a rate rise is on the cards. Financial markets and economists are betting that the Bank’s Monetary Policy Committee will hike by 25 basis points at their 2nd November meeting, taking UK interest rates up to 0.5%.

Other central banks are also edging away from ultra-easy monetary policy, with America leading the way.

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Posted on 09/10/2017

The surprising decline of uncertainty

Monday Briefing Cityscape
The financial crisis seemed to mark a step change towards higher levels of uncertainty and slower growth rates. A less certain world meant less risk taking and fewer big purchases. Companies and households battened down hatches, focusing on reducing their costs and building up savings.

Ten years on from the crisis we have become more accustomed, though not immune, to uncertainty. The cliché is that the only certainty is uncertainty.

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Posted on 02/10/2017

We don’t need a financial crisis to teach us the lessons of the financial crisis

Monday Briefing Lighthouse
Earlier this month I was on a panel with a former banker and an academic in Austria discussing the lessons of the financial crisis.

At one level the crisis was mind-boggingly complex, with obscure, linked financial structures blowing up, spreading risk through the system. At another level it was pretty simple.

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Posted on 25/09/2017

51st thing that made the modern economy

Tin can
Invention lies at the heart of industry and economics. The question of what systems best foster innovation and which innovations have the greatest effect on economic welfare have long occupied economists.

Over the last year the author and economist Tim Harford has presented a BBC radio series describing the fifty innovations he believes have ‘made the modern economy’.

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Posted on 18/09/2017

Don’t overdo the productivity pessimism

Innovation picture

Economists disagree on lots of things, but on one thing at least there is a consensus. Productivity, or the efficiency of production, is the main driver of human welfare. The data bear this out. Consider that growth in living standards in the UK since the late nineteenth century has been driven entirely by rising productivity. It is not surprising that improving productivity is the Holy Grail of economic policy.

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Posted on 12/09/2017

Summer summary

Monday Briefing Summer Summary

With the return to work underway here’s our summary of the key developments in the global economy and in politics over the summer.

On the economic front the mood has been fairly positive, with activity nudging higher led by the euro area, Japan and emerging markets. Unemployment has fallen in Europe, North America and Japan since June. The VIX index, a gauge of financial market uncertainty, is close to a 25 year low. In the last three months global equity prices have risen by 5% and the euro by 4%. The dollar and the pound have continued to soften. Copper and oil prices rose over the summer, the later buoyed by Hurricane Harvey.

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Posted on 04/09/2017