In 2022, the UK economy is struggling with very weak economic growth and one of the highest inflation rates in the OECD. Some of these problems can be attributed to global short-term problems, in particular recovery from Covid lockdowns and rising oil prices which have caused the worst cost-push inflation since the 1970s. However, short-term …
Readers Question: Why was inflation higher in the 1970s? In 2022, inflation has increased in western Europe to the highest levels for many years. With inflation in UK and US approaching 10%. Yet, despite rising oil prices and other inflationary pressures, inflation is still considerably lower than in the 1970s. A big question is whether …
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 …
Readers Question: Why is it so expensive to rent a house in the UK? The average cost of renting a property in the UK is now £1,060 a month (£1,752 in greater London) statista. Between 2005 and 2022, the cost of private renting in England has increased nearly 40% (index from 82 to 114) The …
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. …
After several decades of sluggish growth, the Indian economy is now among the fastest growing economy in the world. Economic growth is currently 7-8%, and set to outstrip China. Despite several problems facing the Indian economy, many economists point to potential strengths of the Indian economy which could enable it to continue to benefit from …
Readers Question: How important is the budget deficit? The budget deficit is the annual amount the government borrow. The government usually financed the budget deficit by selling bonds to the private sector To libertarian and free-market economists, budget deficits are liable to cause significant economic problems – crowding out of the private sector, higher interest …
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 …