A fundamental problem in the UK housing market is a persistent shortage of housing. The ONS forecast the number of households in the UK will increase by 1.6 million (7.1%) over the next 10 years, from 23.2 million in 2018 to 24.8 million in 2028, and yet the current rate of home construction is struggling …
Households are considered by the Government to be in ‘fuel poverty’ if they would have to spend more than 10% of their household income on fuel to keep their home in a ‘satisfactory’ condition. It is thus a measure which compares income with what the fuel costs ‘should be’ rather than what they actually are. …
22 June 2016 If the UK vote to leave the EU, many predict the Pound will fall significantly. Investor George Soros predicted it could be a bigger fall than in 1992 ERM crisis. Soros claims the Pound could fall by up to 20% (BBC) There are different reasons why the Pound may fall. Uncertainty. Leaving …
Oil prices have a significant effect on the consumer price index, though the correlation between oil prices and inflation is less direct than it used to be in the 1970s. St Louis Fed estimates a correlation of 0.27 between changes in the oil price and inflation. In other words, a sustained 10% rise in oil …
Secular stagnation is a term coined to describe a prolonged period of lower economic growth. Economists, such as Larry Summers have written on secular stagnation arguing the world has entered a period of substantially lower economic growth. He points to factors, such as ineffective monetary policy and weak demand for explaining the lower rates of …
Wage growth is a key factor in determining living standards, aggregate demand and inflation. If wages increase faster than inflation, then households will be able to afford more goods and services. Real wage growth = nominal wage growth – inflation. In the post-war period, apart from short-lived recessions, real wage growth has been positive, growing …
Inflation is a continuous rise in the price level. Inflation means the value of money will fall and purchase relatively fewer goods than previously. In summary: Inflation will hurt those who keep cash savings and workers with fixed wages. Inflation will benefit those with large debts who, with rising prices, find it easier to pay …
Reader’s Question: Why does printing money cause inflation? Does this always occur? Summary If the money supply increases faster than output then, ceteris paribus, inflation will occur. If a government prints extra money, households will have more cash and more money to spend on goods. But, if the amount of goods stays the same, the …