I thought big rise in 5yr/5yr indicated there was more to it than the policy rate path?

Seems like the role of QE is underplayed in explaining the 2008-2020 period. Real rates rose in tandem with nominal rates when inflation took off, which maybe suggests a causal link between the 2?

All academic now but I don’t get this. Seems like he made the right judgement because of squatting/fiscal downgrade/nothing going to turn up/Reform off guard etc. just don’t understand the case for the long game

Agree, but seems like even on a narrow definition there is plenty of ‘traditional’ protectionism in the form of soft loans directed towards manufacturers

How many net additions do EPCs suggest for England in 2023-24 Neal?

It doesn’t leave you back where you started in terms of the trade deficit - it falls as the tariffs rise

Not sure I follow. As I see it the diagram says ‘when you reduce trade, deficit country net saving rises’

A unilateral tariff moves you further up Home’s savings schedule and retaliation by Foreign pulls you back down a bit. But net effect of trade fragmentation is more saving in deficit country

I think if you’re Home, tariffs tend towards eliminating CA deficit because in the limit there’s no trade. So interest rates rise to ‘r aut’, which has to entail no capital inflow but higher domestic saving

Obvs impact of tariffs is different, tending towards 'r aut'. But both are ways of refusing to absorb Foreign's CA surplus

In the tariff case world econ takes a supply-side hit from market fragmentation. In the savings case there's a demand-side hit - washes up in falling r* and weak (prod) growth

Sorry to hear this Nancy. You and your team have done some really important work

The chancellor's boost to LHA offers only a temporary reprieve on rent affordability.

Here's the summary and report:

www.generationrent.org/2023/12/08/t...

Really interesting. When you say ‘batteries’ do you mean wholesale storage or people using their EV batteries? Could that provide additional storage? Also, does demand management feature as a major contributor to the solution or marginal?

There's big politics here. If the OBR were to downgrade potential output growth by 0.1% from the current 1.6% that would take about £10bn off the chancellor's fiscal headroom.

If they were to split the difference with the Bank's view of 0.7-0.8%, the Budget would be *very* difficult

But even if the Bank eventually corrects and there’s no hysteresis, the short term effect is more debt and a tougher couple of years than necessary for households. Which in context of fiscal over-optimism isn’t great!

Certainly true abt the correlation with global growth. But can still underperform others if you have consistently deflationary policy and/or if there’s hysteresis causing future growth to start from a lower level than it could

Thanks Sam

Last week's tax cuts certainly can. If the OBR agreed with the Bank headroom would have been deeply negative