Society

Would cutting spending “risk the recovery?” This claim is, literally, Gordon Brown’s re-election manifesto. He is hoping that the Tories haven’t learned to use numbers as weapons – so any economic message he has will not be effectively countered. In fact, his claim is very easily exposed as being bogus by a simple look at recent British economic history. Bloomberg’s Chart of the Day shows that economic growth in the past two recessions (white line) was not at all threatened by fiscal tightening (green graph). Even Goldman Sachs – which is acquiring a reputation as the Labour Party’s house broker – is conceding the central point.  I hope Bloomberg won’t

Where the Gilt market goes in coming months is going to be very important for the UK economy and politics. There is little history of countries being able to sustain deficits of the UK’s magnitude, for very long, without serious market problems. At the moment, we’re getting by thanks the sticking plaster approach of quantitative easing. The Bank of England has purchased £186bn of gilts so far this year, almost perfectly matching the £179bn the Debt Management Office has needed to sell so far. As long as the Bank is willing to support the market with a fast-rolling printing press, government funding at attractive rates is assured. However, the end

The inflation surge is now upon us. The CPI rate again “surprised” to the upside – Britain is the only major economy in the world to have inflation doing this. But given that the Bank of England’s printing presses have been working overtime to fund a fiscally irresponsible government then little wonder things are different here. To understand just how unusual the UK situation is, consider the below graph: despite suffering the longest recession in G20, we have one of highest rates of inflation in the developed world. The next few months will see this push higher, potentially reaching 4 percent in March and busting the 2 percent target. Without

Coffee House readers sometimes complain that we do not talk enough about Muslims and Islam. I have certainly shied away from the subject, fearing that emotion and prejudice, rather than argumentation and empirical data, would dominate the debate. I don’t write about Christians, Jews or Buddhists, so why focus on Muslims? At any rate, I don’t like talking about collective groups, much as I prefer not to be talked about based solely on my heritage. But now a new study called Muslims in Europe allows for an empirically-based debate about sentiments across a number of Muslim communities. Based on interviews and surveys in 11 European cities, it presents some interesting