The regular poll from Opinium for the Observer came out this weekend. Topline figures are CON 43%(+3), LAB 39%(-1), LDEM 6%(-1). Fieldwork was on Tuesday and Wednesday and changes are since last month. This is the largest Conservative lead Opinium have shown since the election, following the trend we’ve seen from other pollsters of a modest improvement in the government’s position in the polls.

The rest of the survey had a numnber of questions on Brexit. More of the public disapprove (44%) than approve (32%) of Theresa May’s handling of Brexit, but it’s less negative than their perception of how Jeremy Corbyn has handled it (19% approve, 48% disapprove) and they would trust the Conservatives more than Labour to handle Brexit negotiations by 33% to 20% (though a chunky 32% say either none or don’t know).

In a forced choice question between the staying in the single market and ending free movement of Labour, 40% would prefer the single market, 34% would prefer ending free movement, 26% don’t know. As you’d expect, this break is overwhelmingly down Remain/Leave lines – by 70% to 8%, remainers would prefer to stay in the single market; by 60% to 14% leavers would prefer to limit freedom of movement. A more interesting question asks what people think the position of the political parties is, underlying that a large proportion of the public don’t know what the parties stand for – 38% don’t know if the Conservatives prefer the single market or ending freedom of movement, 44% don’t know what Labour think, 48% don’t know what the Lib Dems think (and some that do get it wrong – 21% of people think the Conservative’s favour staying in the single market.

On a second referendum, 37% of people said there should be a second referendum on whether to accept the terms agreed or remain in the EU after all, 49% think there should not (as regular readers will know, this is one of those questions that produce quite varied responses depending on how the question is worded – other polling questions show a narrower split, probably because this question is quite explict about the referendum containing the option of staying in the EU after all, resulting in overwhelming opposition from Leavers).

Full tables are here.


344 Responses to “Opinium/Observer – CON 43, LAB 39, LDEM 6”

1 3 4 5 6 7
  1. Donald Trump`s extreme sanctions against Iran are going to have a nasty impact on the UK, and it appears Theresa May is doing little to make him reconsider.

    Besides Airbus aircraft sales, we now have a North Sea oil development halted:

    https://aerotime.aero/en/aviation-economics/deals-and-transactions/21267-us-exit-of-iran-deal-threatens-billions-of-dollars-in-aviation

    https://www.independent.co.uk/news/business/news/bp-north-sea-gas-trump-iran-nuclear-deal-latest-sanctions-a8362806.html

    TM was very quick to react against Russia re Skirpal, so why nothing definite when it is one of her right-wing friends causing the UK problems.

    The best way to hurt Trump would be to call off his vanity visit to the UK. This would save us millions, avoid upsetting the Royal Family, and not impact US people. It would also help the Tory vote.

  2. My view of the general public response to the NI border issue and other matters.
    The general public couldn’t care less about NI and it’s potential boarder issues if anything they rather think the matter is overblown.
    The general brexit issues ,the public just wants the government to get on with it hard/soft brexit doesn’t interest them in the slightest.
    Tory or Labour Government again not really in the public consciousness as yet ,however with the possible caveat of party leaders .
    Those of us who post on here have a passionate interest in politics and other matters ,sometimes we forget that those passions are not shared by the majority of voters.
    Don’t misunderstand me I believe politics effect most aspects of everyday life and I wish people would pay more attention to it but having spent many years as a party activist it is possible to find the politically aware but the vast majority have little or no interest in politics and consider politicians of any party along with car salesmen and solicitors people that they have to deal with but would rather not.

  3. @ CARFREW – Speaking of former H.Secs and following on from a chat of a few days ago did you spot SMogg slamming May’s ‘idiotic’ 100,000 immigration target.

    https://www.politicshome.com/news/uk/home-affairs/immigration/news/95388/jacob-rees-mogg-slams-theresa-mays-‘idiotic’-100000

    Javid is part of the Leave ‘dream team’ and already in place (although I’d have preferred him as CoE).

    You can never please everyone of course and CON won’t write a chapter in a book about it (unlike Paul Mason+co’s final chapter in “Corbyn Effect”) but if you please enough marginal voters in enough marginal seats then you win a majority!

    We might well get a ‘softened’ Brexit. Clean exit from CU, SM and ECJ but ‘softened’ for those potential voters toying with voting LAB/LDEM or abstaining.

    Throwing money at NHS, changing the interest rate on student loans to CPI and avoiding any ‘punches’ to the grey vote the obvious moves but probably a half dozen or more policies that can be thrown out with May+Hammond ahead of a GE in order to secure a comfortable majority!

  4. @ ALEC – The GDP forecasts were wrong on magnitude but unless you invent a time machine the last two years can not be reversed. IMHO it is good that spending has dropped. Consumers borrowing money to buy imported depreciating assets is probably not what Keyne’s had in mind with ‘paradox of thrift’! The lack of investment and weak performance from construction is however a concern – whether or not that is a backlog that will be released is TBA. Certainly HMG could do a lot to encourage investment as BCC pointed out today. As Carney and even yourself have admitted – HMG can affect the outcome – let’s hope they get on with it!

    P.S. How’s the forecast for unemployment doing though? ;)

  5. BAZINWALES

    That’s 3 YGs in a row with virtually no change. The figures are roughly in line with the average of all recent polls.

    No it isn’t. If you look at the polls for the last six weeks or so[1], all YouGov polls (six) have had a lead of 4 or 5 points. Only one Opinium in that period has a 4 point lead – all the others have been less, from eleven polls from six pollsters.

    YouGov is clearly consistent in its polling, but there is a definite difference with all the other pollsters. As I’ve said before it’s very possible they are right and the rest are wrong, but it may be a slight worry to them.

    The tables for the latest (and promptly published!) YouGov are here:

    https://d25d2506sfb94s.cloudfront.net/cumulus_uploads/document/8vbs3n6auc/TimesResults_180521_VI_Trackers.pdf

    and show the usual pattern of Labour losing votes to smaller Parties and DK and losing out a bit on LTV rather than having 2017 voters move to Con in large numbers[2]. All things you would expect to see as reversible come an election. When the polling basics aren’t really altering, there’s a danger of seeing things that aren’t there.

    [1] Taken from:
    https://en.wikipedia.org/wiki/Opinion_polling_for_the_next_United_Kingdom_general_election
    from Opinium 10-12 Apr onwards.

    [2] The Conservatives also have gained a little from having less voters say they would move to UKIP or DK. In practice this would also have probably happened in a GE campaign as well.

  6. @Trevor – “The GDP forecasts were wrong on magnitude…”

    No – it wasn’t. The outcome has probably just exceeded the low end of the GDP loss estimate, although this includes the mitigating actions taken, the delay in triggering A50, and the nearly agreed transition period, so overall their GDP forecast wasn’t too bad.

    Please don’t keep repeating porkies.

  7. EU have announced trade talks with Australia and NZ will commence next month, with an ambitious aim to completing them by end October 2019. NZ say that even without the UK, the EU is their third largest trading partner.

    There is speculation that the EU will end up with a better deal with these commonwealth countries than the UK will.

    While that would be very, very funny, it does raise once again the central point about the Brexit benefits, which seem to be largely focused on getting more trade deals. If the EU can do this quicker and better than we can, what’s the point?

  8. The cost of austerity, financial and political should not be overlooked. Professor Wren – Lewis has looked at it.

    https://mainlymacro.blogspot.co.uk/search?q=cost+of+austerity

    “10,000 for each household is an average figure, but we know that austerity did not fall evenly, but was concentrated on those at the bottom end of the income distribution. It is certain that cuts to social care and the NHS cost lives: it is just a question of how many thousands of lives we are talking about.

    And then there is the political cost of austerity. The Coalition government, and particularly our current Prime Minister, has used immigration as a scapegoat for the impact of austerity. With the help of the right wing press that scapegoating has worked. In particular, as I show here, many people believe that immigration has been bad for public services like the NHS. In reality the opposite is true, but the government and press have succeeded in creating what I call a politicised truth: something that is believed to be true just because politicians and the media keep saying it is.”

  9. Rabobank has done its own calculation of costs of different scenarios of Brexit.

    https://economics.rabobank.com/publications/2017/october/the-permanent-damage-of-brexit/

    “Ultimately, a hard Brexit will cost the UK 18% of growth in 2030, compared to a situation where the UK would continue its EU membership. In absolute terms, this comes down to £400bn until 2030, which is equal to £11,500 per British worker. A FTA and soft Brexit will cause less harm but will still cost the UK economy roughly 12.5% and 10% of GDP growth, respectively. This is equal to £9,500 (FTA) and £7,500 (soft Brexit) per British labourer.”

  10. Roger Mexico

    The 3 latest YouGovs have only varied by 1% for parties and no movement at all for Lab, hence my statement “That’s 3 YGs in a row with virtually no change”. The previous one had a 3% difference for LD. I average the polls each month and the figures in YouGov are very similar to this month’s average so far.

    PS it’s nice to have a discussion about polls on this polling site for a change!

  11. I’ve run the new poll through my model (based on regional data):

    Con 321 (+3)
    Lab 252 (-10)
    SNP 37 (+2)
    LD 17 (+5)

    Conservatives 4 short of a majority. The key areas that Labour need to gain in is the Rest of the South, the Midlands and Scotland.

    Regarding Labour, the model shows no gains in the RoS, and losses in the Midlands and Scotland. It even shows some modest losses in the North and London.

    Of course, it’s just a model that could be wrong, and years to go until the GE (unless there is an Autumn poll).

    However, I think it broadly shows the weak areas for Labour that it really needs to get cracking on, if it wants to win next time.

    If we have an Autumn poll, I think Mrs May would fancy her chances much more that in 2017 (IMHO).

  12. Assuming there is a transition period,the UK will have to have the permission of 40 countries to stay in trade agreements. Chile has indicated it will look for concessions in the agricultural sector. Others may follow.

    By rolling over some of the more recent trade deals the UK may be triggering “most favoured nation” clauses in some of the older and more narrow trade deals.

  13. Sam

    A Dutch economic firm making predictions about unknown outcomes of brexit should be taken with a pinch of salt.

  14. @TURK

    “The general public couldn’t care less about NI and it’s potential boarder issues”
    I care about NI boarders – I mean where will we put them?

  15. @CMJ

    With your caveat on the length of time until the next GE, it is starting to look like Labour will need a progressive alliance, particularly in the RoS, to stop the Tories winning a majority. I suspect that they won’t be able to get one with the SNP in Scotland unless they, at least, commit fully to Remain and the Devo Max proposals from the Scottish Referendum.

  16. Maura

    Those damn boarders are bordering on the boring side of boring boarders.

  17. @CMJ

    “If we have an Autumn poll, I think Mrs May would fancy her chances much more that in 2017 (IMHO).”

    Not sure about that!

    I think May thought she had a 100 majority in the bag when she called that election. When you pull the pin from the grenade, throw it at the apposition, not at your own troops!

  18. CMJ

    I think it’s an awfully big risk with the possibility she’ll end up where she started with the polls locked as they are.

    The public could easily turn on her if in the middle of the most important negotiations the country has faced, she decides to have 2 General Elections (and then refuse to take part in the campaign).

    You’d only need to swing ten seats more then your model (does your model allow you to calculate a Credible Interval for the seats?) and things get VERY tricky for May.

    If it’s 30% change of an (small) OM, 40% chance of status quo, 30% chance of trying to cling on despite the numbers clearly not adding up. I don’t think she will take that gamble.

  19. JIB

    I’m not sure throwing the pin at anyone is that much use!

  20. CMJ

    Baffled why you think May with a current 4 point lead would fancy her chances more than in 2017 when the Tories held a 20 point lead.

    Have you been on the Sherry?

  21. MP

    I suppose the difference is the polling companies have updated there models since then and Corbyn is much more of a known quantity to the voters.

  22. @Alan

    I personally don’t think a GE is likely.

    @Mike Pearce

    The last GE was marked by:

    a) An appalling campaign by TM

    b) A complete under-estimation of Corbyn

    I think that a) wouldn’t happen again. Lessons learned and all that, and b) Corbyn is no longer a surprise factor. People know him now.

    (I don’t like sherry ;-) )

  23. @ ALEC – really, again! OK, here’s Project Fear 1.0:
    https://www.gov.uk/government/publications/hm-treasury-analysis-the-immediate-economic-impact-of-leaving-the-eu

    We know of course that you never make errors but it does appear HM Treasury are not as perfect as you ;)

    I’ll quote from the exec summary:
    “A vote to leave would cause an immediate and profound economic shock… The central conclusion of the analysis is that the effect of this profound shock would be to push the UK into recession and lead to a sharp rise in unemployment”

    If you want a ROFL then read their severe shock scenario!!

    Anyway, how about this time machine so we can undo the last 2yrs. As I’ve said before if we can go back 2yrs why not go back 25yrs and never join the EU. Then we might have had 0.5%/annum higher GDP (mix of trade deals focussed on UK’s interests and not taking on some of the EU’s red tape) – that would have put GDP over 20% higher by now! I’ve just visited a parallel universe and checked that number, UK GDP if we had never joined EU was actually 20.1% higher but as you know I don’t do 0.1%s ;)

    @ ROGER MEXICO – LAB’s DKs and LTVs might well be abstain in a GE or even potentially be convinced to vote for another party but for sure it’s great if LAB are complacent that it will all come good on the day – a lesson CON learnt the hard way!

  24. @Alan

    I’m trying to work out how to generate the confidence intervals of the model.

  25. CATMANJEFF

    Never mind the electorate, I don’t think the Tory party will allow May another election campaign.

  26. @ ALEC – P.S. in Carney’s testimony he also clearly stated 1% worse due to Brexit (not 3.6%). He then tried to point out other factors (HMG, BoE policies and rWorld pick-up) that maybe got it to 1.5%, 1.75% or even 2%. Clearly showing that ‘status quo’ is an absurd assumption in any predictive model.

    He has also been trying to justify why he got it so wrong and the ongoing prediction errors that BoE are struggling with (i.e. not hiking in May having said they probably would). Instead of admitting the MoE issues, that the BoE reports even state, he seems to feel the need to pin the tail to within 0.1% of the donkey. Only fools believe predictions to the 0.1%s ;)

    P.P.S. I’m quite happy with a Remainer in BoE until we’ve left. It’s keeping rates down and the currency weak – all useful during this period of uncertainty.

  27. @Garj

    I agree.

    I think the plan is keep her there until Brexit happens, then she will step aside.

    I can imagine an early GE then though.

  28. @ CMJ – YouGov’s model was widely acclaimed to be the best out there for the last GE – combination of the sheer mass of data they pulled in and the approach they use.

    However, they had enormous confidence intervals (e.g. CON predicted seats 269-334, a 95% confidence range of 65 seats!)

    A confidence range of 65 seats will cover almost every option (apart from a LAB clean majority)

    P.S. Unless SF start taking up there seats then you don’t need 325 for a majority.

  29. CMJ

    One way would be bootstrapping.

    Essentially you run the model a (preferably large) number of times, allowing for a random variation in the input variables, then measure the statistics of the output (such as the standard error of the number of seats) you wish to measure. To get a Credible Interval for example, take the 2.5 percentile and the 97.5 percentile for the number of seats of each party.

    It’s normally used for calculating unusual statistics which are either not solvable analytically or just too difficult and a numerical calculation will suffice.

  30. TW

    The YouGov model did highlight seats like Canterbury. (Which was met pretty much universally with howls of derision here)

    The problem with 650 weighted coinflips (where you don’t even know the weighting that accurately and several seats can be decided by 100 votes) is there will be a pretty large natural variation.

    It had a significantly smaller margin of error than Lord Ashcroft’s model, which was a joke in terms of hedging its bets. As a trial, the YouGov model was pretty successful and a sensible approach to predicting elections. If you want tighter Confidence Intervals, pay for more data.

  31. Turk

    You would cap those estimates, would you?

  32. @Alan

    I was thinking about that approach, but it’s tricky to run.

    I have a spreadsheet of each region, with all the seats listed. I take the EWMA value, and compare it to the the last GE.

    So, if the LDs were 10% last GE, and the EWMA value is now 12%, I add 2% to all LD seats in that region.

    Do this to all seats, and bingo.

    So I think this means that I should randomise the EWMA value for each seat (using the LD value – take a number from a normal distribution with x = 0.12 and the SD 0.0158).

    I should add up the seats won.

    This would be repeated a number of times.

    I’m left with a whole series of seats numbers, and pick the 2.5% and 97.5% of the distribution.

  33. BazInWales

    “it’s nice to have a discussion about polls on this polling site for a change!”

    We could discuss the ONS “Personal well-being in the UK”

    https://www.ons.gov.uk/peoplepopulationandcommunity/wellbeing/bulletins/measuringnationalwellbeing/januarytodecember2017

    Like why do “A larger proportion of people in Wales report low ratings of life satisfaction, worthwhile and happiness compared with the UK average ” (Chapter 6)

    Why is “Scotland is the only country to show improvements across any measures of personal well-being ” (Chapter 5)

  34. Court of Session hearing today on A50 revocability case.

    Lord Boyd will deliver his judgment later.

  35. GARJ

    @”Never mind the electorate, I don’t think the Tory party will allow May another election campaign.”

    I agree.

  36. CMJ

    That’s it in a nutshell. Getting the distribution of the EMWA data might be a little trickier than assuming an independent normal distribution for each party (If LD are a little higher than average in one run, other parties will be a little lower on average)

    Not sure what code you are running but something which generates a multinomial distribution (and then sample from LD=0.12, Lab = 0.22 Con = 0.24 OMRLP = 0.42 or whatever your numbers are) will at least take this effect into account.

  37. Since Sam posted something from Mainly Macro up the page, and I’ve had a really bad day at the office, I’m going to allow myself a bit of a rant. Not so much about left-wing policies as about left-wing behaviour.

    Professor Wren-Lewis makes me wonder why I’m not a professor. I could honestly have written everything in that passage you quoted myself. (Except, actually, while largely criticising the austerity programme, I would nonetheless have noted that income inequality is down since the recession, and that unemployment is the lowest it has been since the postwar consensus. That in itself is probably a thoughtcrime in some academic circles.)

    In general, I find left-leaning economic blogs tiresome to read. Not particularly because I disagree with the fundamental ideas, but because they are never expressed in terms of economics. Left-wing economists only ever seem to appeal to the heart, or the conscience, never to the brain. The pitch seems to be “either you agree with me, or you don’t care about poor people, and that makes you a bad person.” False dilemma with a side order of ad hominem.

    Now, there are theoretical and empirical justifications for these policy positions, most notably the arguments put forward by Thomas Piketty. But why don’t the likes of Wren-Lewis actually communicate these ideas in their columns? Is it perhaps because they know that they are preaching to the choir, and what their audience wants to read is a partisan regurgitation of right-on shibboleths rather than looking at some graphs? (That one that looks like an elephant. I love that one. Please show me that graph more often.)

    I ask this because, if you read stuff put out by right-wing economists, it’s the antithesis of all this – not just ideologically but structurally. They don’t make moral assertions. They simply explain the logic behind their positions, why certain appealing-sounding ideas could have unintended consequences, etc. If there are two sides to an argument (and there always are), they will acknowledge the cons as well as the pros.

    Now, I’m pretty open-minded and not tribal to either side of the ideological chasm. BUT, in methodological terms, I’m very much with the right-wing guys. Because they actually make an argument. Making an argument is so important, and I wish more left-wing econ sources could do the same – and indeed, if anyone could recommend some left-wing econ blogs with some proper economics in them, that would be great.

    And note, I’m talking specifically about econ blogs here. The Conservative Party hasn’t made an intellectual argument for anything in a long time – as the Labour Party has retreated to virtue signalling, the Tories have retreated to vice signalling, with a form of politics that never lets a credible vision for the future get in the way of some pearl-clutching flag-waving. In that thought-free zone, the cuddly Jeremy Corbyn thrives simply by being a nice guy.

  38. Davwel, re Trump

    He seems to be “interfering” in our economy, not to mention our elections…. And then there is his support for IS-supporting (allegedly) Saudi Arabia and regional destabiliser Israel..

    How many US diplomats shall we expel?

  39. Trevor,

    The Bank of England forecast you posted is pretty good actually. They assumed an immediate A50 and conclusions are over the two-year A50 period. That makes comparisons a bit tricky since we actually had an extra 9 months to smooth out the shock. But even so:

    The predictions for the fall in sterling, investment and house prices and spot on. The forecast recession has not materialised yet, but as we have not got to the end of A50 yet, the betting is still open. The GDP growth for the last quarter was only +0.1%, which is really not looking at all good.

  40. It’s at times like this, with all the speculation and uncertainty over how a GE would turn out, that we really need Dr Mibbles….

  41. CMJ

    Treat your data as population (obviously you would want to have a reasonable starting date) and then take random samples from it. The confidence intervals would settle once you have the right distribution.

    I have to add – it is unlikely to work on a regional basis, so it is kind of waste of time, but there is a script on open software – I can dig the link out of you really want it.

    YouGov’s alternative model wasn’t based on this but on the similarity of the demographic, social, economic, hobby and so on characteristics of the different constituencies – as far as it is disclosed. Then the huge number of random samples were used to improve the prediction of the outcome, and hence increasing the expected change in the subsamples, thus making the job of randomness to change the prediction more and more difficult. Their last non-alternative poll ignored it, and was wrong, while the alternative adhered to the rule and was correct).

  42. @Alec:

    Much as you take joy in the idea of the EU sticking it to the UK over Antipodean trade, the celebratory Guardian article says:

    “The EU has made it clear before its negotiations with Australia and New Zealand that the size of its market offers bountiful opportunities, without the need for the bloc to expose its agricultural sector to cheap imports.”

    That is the difficulty the EU has in trade negotiations. There are countries with particular sensitivities that rule out negotiations in some areas. So excluding agricultural goods makes it harder for the EU with respect to these countries.

  43. NORBOLD

    I think Dr Mibbles was able to retire on his election winning bets.

    CMJ

    Maybe but I think you are under-estimating Jeremy Corbyn’s abilities at hustings. That’s when he comes alive. Frankly I wouldn’t place a bet on either party winning an overall majority at the next election

  44. Sam

    No caps ,but even you should be a little suspicious of estimates from Rabobank group who was fined one billion dollars in 2013 for unscrupulous trading practises.

  45. Polltroll

    There are some good observations and some incorrect ones in your post @19:12.

    Well, there is a moral point in the arguments in the writings of right-wing economists (will come back to left and right in a minute) too – it’s Dr Pangloss’s moral. M. Friedman made it very clear. And still the best critique of it is Joan Robinson’s article (What are the questions) written in the turmoil of the 1970s.

    Moralisation is not a left-wing thing – this is why I like Adam Smith’s work – the moral is very clear, and it is about the future, and hence a very different kind of criterion than moralizing (it’s worth reading his passages about the conditions of the workers) – it is the same with Marx.

    On the other hand, we do need the moralisation. Without those moralizing Victorians we wouldn’t have had Factory Acts and basic education (well, we would, just very differently). The reports of the the factory inspectors (pretty much moralizing middle classes) to Parliament are fascinating.

    This then brings back to the question of left-wing and right-wing in economics. From the perspective of the future as a criterion Keynes is a rightwinger. He is quite happy with the economic system that reproduces the need of goodwilling state (your correct point about moralizing). So, he is also Dr Pangloss (not accidentally called him Schumpeter a monetarist).

    There are many left-wing economists who didn’t have these moralizing bits. John Weeks’s articles back in the 1980s, Stephen Marglin’s works then, or from a completely different direction, Alan Freedman. One of the problems for left-wing economists (not necessarily those named in the previous sentence) is that there is absolutely no manifest social movement behind their analysis, while there is behind the moralizing ones, and the ones that deny moralizing (the right wing ones). So, the temptation is too high… Even to the degree to make essential methodological mistakes in describing the 21th century capitalism …

    Now back to the language and tools of mainstream economics – both are worthless, and useless as Joan Robinson wrote. It is a purely ideological form of thoughts without any intention of using it for social purposes (as Milton Freedman said: who cares that the marginal cost function in reality is not U shaped – the first derivative will give an optimum point. By the way it, resulted in a glaring contradiction between one of his graphs and his interpretation in the Monetary History – well worth a Novel Prize. By the way why the co-author didn’t get it? Or Debreu – the aim of economics is to prove the perfect market hypothesis using the fewest number of equations. Or Arrow: proving that all goods can be sold, all labour and all capital can be employed at equilibrium prices in an N-dimensional Eucledian epace. Well, he was wrong as in one of the segments there is no equilibrium in his model, still it was well-worth the Nobel-prize.)

  46. oldnat

    “Why is “Scotland is the only country to show improvements across any measures of personal well-being ” (Chapter 5)”

    Drink?

  47. Polltroll

    OK, what is wrong with this, please? What is it about what is said that makes it left wing?

    https://mainlymacro.blogspot.co.uk/2018/03/the-economic-and-political-cost-of-uk.html

    “The final point is that austerity was completely unnecessary. By austerity I mean cutting the deficit when interest rates could not be cut to offset the impact of fiscal consolidation. There is zero evidence that the markets demanded austerity in 2010, and plenty of evidence they did not. Even if the markets had panicked at the size of the deficit, the Bank of England would have bought government debt as part of its QE programme.

    The unusual feature of the Great Recession was not just its size, but that for the first time since the 1930s governments started reducing spending in what should have been the recovery period. They have never done that since the 1930s because economic textbooks and state of the art models say it is a stupid and costly thing to do.”

  48. “Public sector net borrowing (excluding public sector banks) in the latest full financial year (April 2017 and March 2018) was £40.5 billion; that is, £5.7 billion less than in the previous financial year (April 2016 to March 2017) and £4.7 billion less than official (OBR) expectations; this is the lowest net borrowing since the financial year ending March 2007”

    ONS

    The detailed tables show that the £40.5 bn Deficit for FY 17/18 comprised :-

    Current Budget-Surplus £ 1.3 bn
    Capital Budget ( Investment) -Borrowing £ 41.8 bn

    “Borrowing to Invest ” ! :-) :-)

  49. SAM

    @” Even if the markets had panicked at the size of the deficit, the Bank of England would have bought government debt as part of its QE programme.”

    But not from the Treasury.

    The Asset Purchase Programme authorises BoE to purchase UK Gilts ALREADY in issue -from the Financial Institutions who bought them from The Government.

    ie QE does not intervene in the market making & price setting by Gilt purchasers when they respond to offers of Gilts from the UK Debt Management Office of the UK Treasury.

  50. Is income inequality down since the recession?

    https://www.resolutionfoundation.org/app/uploads/2017/12/Unequal-results.pdf

    “Perhaps the most important problem with both datasets is the inaccuracy of top incomes. Work by Burkhauser et al. shows that the unadjusted household survey data greatly underestimates the incomes of the top few per cent compared to tax data. In the case of the top 0.1 per cent, often only around half of income is captured. An attempt is made to correct this in HBAI using tax data from HMRC. No such attempt is currently made in ONS’s ETB and so this data greatly underestimates the scale of top incomes. This has a large effect on inequality trends too, as the share of income going to the richest has increased. HBAI’s top income correction is a key cause of differing trends between HBAI and ETB. Despite often being the timeliest, ETB is therefore not the best source for overall disposable income inequality statistics. But HBAI – although it was a pioneer internationally – is also far from perfect. The top income (‘SPI’) adjustment is crude, covers only the very top of the distribution, is based on projections rather than outturn data, has varied slightly over time, and is partially undocumented. Both ONS and DWP, working with HMRC, must be given the resources to update and improve on their current methods as soon as possible.

1 3 4 5 6 7