Coppola Comment

Earlier today, the Governor of the Bank of England, Andrew Bailey, gave a speech at the Resolution Foundation outlining the nature of the Covid-19 crisis and the challenge that it poses for monetary policy. But as his speech progressed, it became clear that the Bank faces a much larger challenge. Covid-19 hit the UK economy at the end of a dismal decade. Returning to "where we were" before the pandemic won't be good enough.  Just how dismal the 2010s were is evident in this chart from Andrew Sentance:  Even before Covid-19 struck, average GDP growth was well below its historical average and heading downwards. The 2010s were, to put it bluntly, a decade of stagnation.  The 2000s were slightly worse, but that was because they included the deep recession after the financial crisis, during which the economy shrank by 6%. For the 2010s, there was no such excuse.  So Covid-19 hit an already under-performing economy. As a result, Sentance's forecast for the 2020s is frankly

When even anti-EU tabloids say the Government's official position on Brexit is insincere, it is time to take it seriously. On Tuesday last week, The Sun reported that the European heads of government had concluded that Johnson's latest genius plan to create a "double border" on the island of Ireland wasn't a serious attempt to negotiate a Brexit deal. "They believe his insistence the dossier be kept secret is an effort to disguise the fact it is designed to set up a “blame game” with Brussels," it said. An hour after The Sun published its article, Sky News released a briefing from an unnamed "No. 10 source" on a phone call between Boris Johnson and the German Chancellor, Angela Merkel: "The call with Merkel shows the EU has adopted a new position. She made clear a deal is overwhelmingly unlikely and she thinks the EU has a veto on us leaving the Customs Union. Merkel said that if Germany wanted to leave the EU they could do it no

With only six months left to the moment when the UK leaves the EU, the Brexit end game is upon us. If there is to be a Withdrawal Agreement at all, the Northern Ireland border problem must be solved within the next couple of weeks. But at present, both sides are well dug in and showing no inclination to budge. No-deal Brexit is looking increasingly likely. Nonetheless, the game is still afoot. In Salzburg, the EU appeared to strike a mortal blow to Theresa May's Chequers proposal. After this, surely she had to compromise on her red lines? Not a bit of it. Mrs. May is sticking to her Chequers proposal, apparently hoping that eventually the EU will blink. She remains, as ever, oblivious to the mortal damage that this would do to the EU as a political project. But agreeing a deal with the EU is not Mrs. May's top priority anyway. With the Tory party conference approaching, continual rumours of a leadership challenge, and Boris trying to make himself look like Churchill-in

Sometimes I despair at the naivety of politicians. Theresa May's humiliation in Salzburg was an inevitable consequence of her belief that the EU would be willing to compromise its "four freedoms" to keep her in power. To be fair, press reports since the Chequers plan have suggested that the last thing the EU wants is a change of leadership in the UK. But it was a mistake to interpret this as meaning the EU was willing to become Theresa's poodle. Nothing could be further from the truth. The EU has said many times that the four freedoms are not up for negotiation, and proposals that tried to keep some of them while rejecting others have all been flatly rejected. Theresa's prized Chequers deal was weighed in the balance and found wanting the moment it hit Michel Barnier's desk. All the European Council did was confirm what everyone already knew. Except our Theresa, that is, who apparently thought that "this is not going to work" meant that the

Skewering Patrick Minford has become something of an economists' bloodsport. I admit, I have done my fair share of Minford-bashing, though I do try to stay away from trade economics. Others are much better at lampooning Minford's antediluvian approach to trade economics than me. But when Minford starts pontificating on the effect of currency movements on the balance of trade, I can't resist getting out the shotgun. Minford is appallingly bad on anything that involves foreign exchange. He just doesn't seem to understand how floating exchange rates interact with trade dynamics and capital flows. So it is unsurprising that his latest venture into this complex subject is as disastrous as the last . Here is Minford, in the Express , talking about Brits and their holidays: The mood of British consumers is good, reflecting the fact that the economy continues to grow and create record employment. A staycation is best because of the Brexit devaluation, which makes Britis

You would think, wouldn't you, that an "Alternative Brexit Economic Analysis" by four highly experienced and qualified economists would be a rigorous exercise in economic forecasting, supported by excellent econometrics and with care taken to avoid confirmation and selection bias?  A new paper from the Brexit-supporting thinktank Economists for Free Trade critiques the Government's recent forecast that Brexit would cause a GDP loss of between 2 and 8 percent over 15 years relative to remaining in the EU, with the "hardest" Brexit causing the greatest loss. Or at least, that's what the paper says it is doing. But the way it goes about it is decidedly odd for something claiming to be an "Alternative Brexit Economic Analysis". The first section of the report is an extensive discussion of the reasons why no-one should ever believe forecasts produced by the UK Civil Service. The authors argued that because HMT's forecasts are frequently w

If there is one industry Brexit has stimulated, it is the production of daft ideas for regenerating the UK economy after its exit from the EU. Many of the offerings have been from people who really like the idea of Britain becoming a European version of Singapore. But the left wing is not short of silly schemes either. This one , from businessman and self-styled economist John Mills, is one of the silliest I have seen. John Mills is chairman of John Mills Limited (JML). On his biography, he describes this as “a consumer goods company specialising in selling products requiring audio-visual promotion at the point of sale, based in the UK but with sales throughout the world .” Emphasis is mine, for reasons which will shortly become apparent. John Mills is also a long-standing supporter of Brexit. Like many left-wing Brexiters, Mills thinks that leaving the EU will create an opportunity to rebalance Britain’s economy away from finance and other service industries and towards manu