This budget seemed more natural for a pre-election position, not post.
It was surprising how many leaked stories were numerically incorrect, for instance:-
the personal allowance was rumoured to go from 10k to 12k but went to 11k
the upper tax threshold was rumoured to go from 41k to 50k but went to 43k
I'm not sure I understand the defence statement as an increase as we were spending 2% of GDP anyway!
Mortgage tax relief for buy to let landlords restricted to basic rate is a good idea, but we still need more houses.
I was also surprised that Public sector pay rises will be frozen at 1% for four years, if all goes well with growth over that time, then private sector pay will rocket ahead and it seems a bit mean to restrict public service pay so much, especially when the politicians are going to get 10%.
The rabbit in the hat at the end seemed to be introduced to damp the fire of their opponents rather than be effective, will it be possible to police all the employers who will refuse to keep up with the rate?
Thursday, 9 July 2015
Wednesday, 8 July 2015
Barclays culture
Today Barclays has released Antony Jenkins the CEO, business parlance for incompatibility.
Antony Jenkins had been in his position for three years since Bob Diamond left, the charismatic character that was pressured out after failing to convince a commons select committee of his morals, following controversy over manipulation of Libor interest rates by traders employed by the bank.
Antony Jenkins started by making a statement to the staff something similar to [staff should quit the bank if they do not want to sign up to a set of standards aimed at rebuilding the bank's reputation] after a string of scandals.
He pointed out that over a period of almost 20 years, banking became too aggressive, too focused on the short-term, too disconnected from the needs of their customers and clients, and the wider society, also performance assessment will be based not just on what they deliver but on how they deliver it. They must never again be in a position of rewarding people for making the bank money in a way which is unethical or inconsistent with his new values.
Obviously this has not gone down well with the old guard within Barclays as Antony Jenkins walks out today. Perhaps the people investing with Barclays might like to take stock of the current situation and the way the world is moving away from these pre-historic ideas of greed is good.
Antony Jenkins had been in his position for three years since Bob Diamond left, the charismatic character that was pressured out after failing to convince a commons select committee of his morals, following controversy over manipulation of Libor interest rates by traders employed by the bank.
Antony Jenkins started by making a statement to the staff something similar to [staff should quit the bank if they do not want to sign up to a set of standards aimed at rebuilding the bank's reputation] after a string of scandals.
He pointed out that over a period of almost 20 years, banking became too aggressive, too focused on the short-term, too disconnected from the needs of their customers and clients, and the wider society, also performance assessment will be based not just on what they deliver but on how they deliver it. They must never again be in a position of rewarding people for making the bank money in a way which is unethical or inconsistent with his new values.
Obviously this has not gone down well with the old guard within Barclays as Antony Jenkins walks out today. Perhaps the people investing with Barclays might like to take stock of the current situation and the way the world is moving away from these pre-historic ideas of greed is good.
Tuesday, 7 July 2015
ECB independence
Has the ECB ever been independent?
No is the short answer.
On it's front page it states:-
"The independence of the ECB is conducive to maintaining price stability. This is supported by extensive theoretical analysis and empirical evidence on central bank independence.
The ECB's independence is laid down in the institutional framework for the single monetary policy (in the Treaty and in the Statute)."
However, it is now known that the ECB is waiting for it's political leaders to tell it what to do!
The ECB itself says it cannot act until a result from negotiations have concluded, but negotiations have been going for months without a conclusion and Greece needs action now, not next month.
If central bank independence increases credibility, it should be associated with greater rigidity in the setting of nominal prices and money wages, reflecting the fact that the bank's promise to keep inflation low is believed. Indeed independence, not merely fails to reduce the cost of dis-inflation, but rather seems to increase it. Getting inflation down takes as long and calls for a larger short-term sacrifice of output and jobs, on average, in countries with relatively independent central banks.
Perhaps we should ease off the idea of an independent central bank and accept that it has political masters so that the Greek banks can have assistance immediately.
No is the short answer.
On it's front page it states:-
"The independence of the ECB is conducive to maintaining price stability. This is supported by extensive theoretical analysis and empirical evidence on central bank independence.
The ECB's independence is laid down in the institutional framework for the single monetary policy (in the Treaty and in the Statute)."
However, it is now known that the ECB is waiting for it's political leaders to tell it what to do!
The ECB itself says it cannot act until a result from negotiations have concluded, but negotiations have been going for months without a conclusion and Greece needs action now, not next month.
If central bank independence increases credibility, it should be associated with greater rigidity in the setting of nominal prices and money wages, reflecting the fact that the bank's promise to keep inflation low is believed. Indeed independence, not merely fails to reduce the cost of dis-inflation, but rather seems to increase it. Getting inflation down takes as long and calls for a larger short-term sacrifice of output and jobs, on average, in countries with relatively independent central banks.
Perhaps we should ease off the idea of an independent central bank and accept that it has political masters so that the Greek banks can have assistance immediately.
Monday, 6 July 2015
Greek referendum - the result
Yesterday Greeks voted 'overwhelming no' and the question that most Greeks must be asking themselves is what happens now?
This 'no' vote could be catastrophic for the economy as it would mean that the cash-for-reforms deal that would give the Greeks access to the final €7bn tranche of a €240bn bailout fund would not be available. In turn, this would likely result in Greece defaulting on loans due on 20 July to the European Central Bank [ECB], which is currently propping up Greece's banking system.
The Prime Minister Alexis Tsipras and his government stay in place, but where can they turn to for support. If they want to start from the beginning as a new state, how are they going to pay for public services?
Leaving the eurozone means they need a currency, presumably they would return to the Drachma, but how long would it take to get the currency up and running?
What about supplies, every trader needs stock, Greece relies almost entirely on foreign imports for its pharmaceutical supplies. But since capital control imposed last Sunday brought the country’s banking system to a sudden halt, some suppliers have stopped delivering key medication because they cannot get paid. Foreign bank transfers have been banned by the Greek government and Greek credit is no longer accepted outside the country [as stranded Greek tourists found this week when their credit cards stopped working].
What happens when the food runs out?
It is possible that there are too many questions, problems, issues to answer in the short term and the likelyhood of civil unrest becomes more pertinent.
This 'no' vote could be catastrophic for the economy as it would mean that the cash-for-reforms deal that would give the Greeks access to the final €7bn tranche of a €240bn bailout fund would not be available. In turn, this would likely result in Greece defaulting on loans due on 20 July to the European Central Bank [ECB], which is currently propping up Greece's banking system.
The Prime Minister Alexis Tsipras and his government stay in place, but where can they turn to for support. If they want to start from the beginning as a new state, how are they going to pay for public services?
Leaving the eurozone means they need a currency, presumably they would return to the Drachma, but how long would it take to get the currency up and running?
What about supplies, every trader needs stock, Greece relies almost entirely on foreign imports for its pharmaceutical supplies. But since capital control imposed last Sunday brought the country’s banking system to a sudden halt, some suppliers have stopped delivering key medication because they cannot get paid. Foreign bank transfers have been banned by the Greek government and Greek credit is no longer accepted outside the country [as stranded Greek tourists found this week when their credit cards stopped working].
What happens when the food runs out?
It is possible that there are too many questions, problems, issues to answer in the short term and the likelyhood of civil unrest becomes more pertinent.
Sunday, 5 July 2015
Greek referendum
The Greeks are going to the polls today to vote either yes or no.
I do not claim to understand the question, but from an outsider's position I can see either a bad result or an even worse result. That is usually language that a comedian uses, but here it seems to be relevant.
Only tomorrow will tell.
I do not claim to understand the question, but from an outsider's position I can see either a bad result or an even worse result. That is usually language that a comedian uses, but here it seems to be relevant.
Only tomorrow will tell.
Friday, 3 July 2015
Terrorist naming conventions
Parliament is about to debate whether to allow our armed forces which are currently bombing locations in Iraq and turning round at the border of Syria and flying home, to continue into Syria and bomb locations there. They say it is different now. How is it different? have less people died?
No it is a matter of who to upset or not.
My focus today is on naming. Recently the BBC was praised for not calling I.S./I.S.I.S./ISIL [Islamic State of Iraq and the Levant] the Islamic State as it offends Muslims. Fair enough, but these people who are offended have not advised us what to call them instead!
If they are suggesting that we do not call them anything, then that could be a little difficult as we love to label everything.
Earlier today the defence secretary Michael Fallon started calling them Isil-Daesh part way through his speech, is this the new black?
No it is a matter of who to upset or not.
My focus today is on naming. Recently the BBC was praised for not calling I.S./I.S.I.S./ISIL [Islamic State of Iraq and the Levant] the Islamic State as it offends Muslims. Fair enough, but these people who are offended have not advised us what to call them instead!
If they are suggesting that we do not call them anything, then that could be a little difficult as we love to label everything.
Earlier today the defence secretary Michael Fallon started calling them Isil-Daesh part way through his speech, is this the new black?
Thursday, 2 July 2015
Credible Gatwick
The report is in and Gatwick is in a very good position for getting it's second runway. The restrictions that would be placed onto Heathrow to allow it to comply with today's regulations mean that it would no longer be a viable operation.
Gatwick has excellent rail connections. It is connected to 125 rail stations directly, and by the end of the decade it will be closer to 200. Heathrow is connected to six.
Gatwick also wins on noise, Heathrow impacts about 800,000 people whereas Gatwick impacts only about 3% of that number — a very tiny population. That’s because it is to the south of the city in a relatively sparsely populated area.
Unlike Heathrow, a new runway at Gatwick, will not interfere with existing motorway connections or rail services: “Already, the Sevenoaks junction round to Godstone on the M25 has been made four lanes wide, and that is going to go all the way round to Reigate in the coming years. Likewise, it will be four lanes all the way to Gatwick on the M23.
Of course the final nail in Heathrow's coffin is the Prime Minister's statement when David Cameron said "No ifs, no buts, no Heathrow third runway".
Gatwick has excellent rail connections. It is connected to 125 rail stations directly, and by the end of the decade it will be closer to 200. Heathrow is connected to six.
Gatwick also wins on noise, Heathrow impacts about 800,000 people whereas Gatwick impacts only about 3% of that number — a very tiny population. That’s because it is to the south of the city in a relatively sparsely populated area.
Unlike Heathrow, a new runway at Gatwick, will not interfere with existing motorway connections or rail services: “Already, the Sevenoaks junction round to Godstone on the M25 has been made four lanes wide, and that is going to go all the way round to Reigate in the coming years. Likewise, it will be four lanes all the way to Gatwick on the M23.
Of course the final nail in Heathrow's coffin is the Prime Minister's statement when David Cameron said "No ifs, no buts, no Heathrow third runway".
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