Deficits, debt in The Monday Briefing

Italian lessons

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Posted on 04/06/2018

300 years of public spending

Public spending
The changing size of the state tells the story of modern nations and the ideas that shape them.

Until the late nineteenth century the civilian state scarcely existed. In 1692, when comprehensive records for what was to become the UK started, civil spending by government came to a modern equivalent of around £90 million. A country that was about to acquire a vast empire was governed with a budget equivalent to that of today’s Food Standards Agency.

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Posted on 29/05/2018

Rising wealth, sluggish wages

The City_London
In the last decade Britain and the US have experienced an unusual combination of soaring asset prices and sluggish wage growth.

Between 2006 and 2016, the total value of assets held by UK households rose by 59% while average incomes increased by just 24%.

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Posted on 21/05/2018

Nine things you (may) not know about international trade

Two lorries on the road
1. Trade liberalisation boomed and has busted

A post-World War II wave of liberalisation reduced barriers to trade and helped fuel a global boom in exports. The Uruguay Round of negotiations between 1986 and 1994 marked the high point of this process. It was the largest ever trade negotiation and significantly reduced barriers to trade in goods. Since the 1990s the momentum of trade liberalisation has slowed, and since the financial crisis, almost ground to a halt. The election of Mr Trump, an ardent critic of the international trading order, is indicative of how much things have changed.

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Posted on 08/05/2018

Thoughts on the global economy

Abstract metal sphere
Last month Deloitte’s economists from across the world met in London to assess the outlook for the global economy. It was a fascinating and wide-ranging discussion. Rather than trying to summarise individual views, here are some of the areas where the discussions affected my own thinking.

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Posted on 01/05/2018

As good as it gets

Building with seedling
The global recovery has moved up a gear in the last year. The year 2018 is likely to be the best year for world growth in seven years. But this is a mature recovery and, at the risk of sounding like a kill joy, this is about the time you’d expect the economic cycle to start rolling over. For the rich western economies the second half of 2018 is likely to mark the peak in growth.

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Posted on 23/04/2018

Technology and productivity - a complicated relationship

Graphic of planet and charts
There are numerous explanations for why technology is no longer boosting productivity in the way it did in the twentieth century. The US economist, Robert Gordon, argues that today’s technologies are less productivity-enhancing than the great inventions of the past. The opposing view is that technology is still working its magic, but in ways, such as improving the quality of goods and services, which are poorly captured by the statistics.

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Posted on 16/04/2018

Brexit transition deal boosts UK business sentiment

Compass_CFO Survey
The latest Deloitte survey of UK Chief Financial Officers (CFOs) released this morning shows that business confidence has edged up and is running not far off its long-term average. CFOs seem to have shrugged off weakness in equity markets and concerns about trade with perceptions of uncertainty dropping to the lowest levels since the spring of 2016, before the EU referendum. This finding fits with our own “Worry Index” which tracks newspaper references to terms relating to uncertainty and risk. It dropped to a ten-year low in the first quarter.

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Posted on 09/04/2018

Can labour scarcity drive productivity?

Cityscape
To the bafflement of economists Britain’s economic recovery has been accompanied by growing demand for labour and falling wages. Since 2007 the number of people in work in the UK has risen by 2.7 million, an increase of 9%. Over the same time earnings, after allowing for inflation, have fallen by about 2.5%.

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Posted on 03/04/2018

Measuring happiness

A happy man sitting on a chair
The idea of measuring national happiness has been around for decades and was pioneered by the government of Bhutan in the 1970s. Since the global financial crisis interest in measuring, and understanding, what drives happiness, has risen.

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Posted on 30/03/2018