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We are launching our Christmas reading list today. Our ‘top six’ is the product of a lot of reading and some debate in the Economics Team. The list aims to offer a thought-provoking and enjoyable break from the rigours of Christmas. All are available free and online. You can save these articles on your smartphone's or tablet's reading list. To print any use the print icons, where available, on the webpages to ensure the whole article comes out.
Humans seem to be disagreeing more about the big issues of the day and becoming more intolerant of others’ opinions. Why are we becoming increasingly uncomfortable with views that differ from our own? This thought-provoking speech by New York Times columnist, Bret Stephens, examines the dying art of disagreement (10 pages).
The Monday Briefing recently mentioned journalist and economist Tim Harford’s search for the 51st thing that made the modern economy. The Briefing has also made the case for what we call prosaic innovation, the everyday, incremental changes, often low tech in nature, which shape our lives. Tim’s recent blog underscores this point, arguing that we should pay as much attention to cheap and humble technologies as to the most sophisticated (6 pages).
Most of us would think it worthwhile to pay a small fee to find the right long-term partner. Yet many dating apps struggle to get users to pay for premium features which increase the probability of finding a good match. Humans seem to be quite bad at valuing such long term gains (3 pages).
How did the sandwich consume Britain? This article looks at how two pieces of bread and a filler have transformed how we eat and the UK’s so-called “food-to-go” market. This fascinating history also looks at what could be next for the £8bn a year UK sandwich industry (14 pages).
Our Christmas Quiz offers an eclectic test of knowledge of economics and business. The answers, and a brief explanation of the factors at work, are at the end of this note.
- Which of the following countries has the most affordable housing market relative to incomes, according to The Economist’s house price affordability index?
It’s official, the UK growth outlook has taken a turn for the worse. By far the biggest news in last week’s budget was the downgrade in the Office of Budget Responsibility’s (OBR) forecast for UK productivity growth over the next four years, from an average of 1.6% to 0.9% a year.
There is no consensus about why UK productivity growth has been so weak in recent years. But with the under-performance running into its sixth year, and other countries struggling with similar problems, the OBR has thrown in the towel and accepted that the days of rapid productivity growth are over.
What is the biggest question facing the European Union?
Brexit is the obvious candidate. The secession of a member state is an almost unimagined contingency. But for all the historic significance of Brexit the future direction of the EU itself is, for my money, a more important question.
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.
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.
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.
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.
A personal view from Ian Stewart, Deloitte's Chief Economist in the UK. Subscribe to & view previous editions at: http://blogs.deloitte.co.uk/mondaybriefing/
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.
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.
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.