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    Watch out for the impact of Scottish independence opinion polls on the UK’s borrowing costs

Watch out for the impact of Scottish independence opinion polls on the UK’s borrowing costs

While much of the debate is centred around the economic implications of Scottish independence, Costas Milas and Tim Worrall investigate whether the narrowing of opinion polls is having economic implications right now in terms of public borrowing costs. Indeed, they find a link between the UK’s cost of borrowing and Scottish independence opinion polls, and argue that this has important […]

More on why the government’s policy in dealing with the rising debt burden in the current low growth environment is indeed justified

In a previous article, Costas Milas examined the relationship between public debt and GDP growth, arguing that the government’s policy in dealing with the rising debt burden is justified. A recent critical response to his piece has caused quite a stir. Here, he elaborates on his econometric model and arguments.  In early December, I looked at the relationship between the […]

The government’s policy in dealing with the rising debt burden in the current low growth environment is indeed justified

Looking at the relationship between the UK’s public debt levels and economic growth using data from 1831 to 2013, Costas Milas finds that public debt has been a drag on the UK economy in the last few years. This justifies the government’s decision to put in order its finances. Equally important, the time to resume interest rate hikes is when […]

The Bank of England’s inflation report and what it means for the unemployment rate

As expected, the MPC revised upwards its GDP growth forecasts and predicted a return of the unemployment rate to the 7% threshold 18 months earlier than it previously thought. Costas Milas argues that despite the rising economic optimism and better economic data, unemployment might still take until the second quarter of 2016 to return to 7%. In August 2013, the Bank […]

November 13th, 2013|Costas Milas|1 Comment|

A (simple) justification for Carney’s “7% unemployment rate threshold”

Looking at the change in the UK inflation rate against the UK unemployment rate over the 1971-2012 period, Costas Milas examines the implications of the Bank of England’s forward guidance and why the 7% threshold was chosen. The empirical results offer support to the recent decision by Mark Carney and his MPC colleagues. Historical inflation and unemployment rates confirm that inflationary pressures […]

Do royal babies boost the UK economy?

The arrival of Prince George this week has caused some to proclaim the economic benefits of royal births. Costas Milas tests this claim and finds no statistical significance. Following royal births, UK growth strengthens solely due to economic factors. The birth of the royal baby on Monday was followed by reasonably good news on the economy. Indeed, according to the Office for […]

BREXIT talk is already hurting the UK economy

David Cameron has promised to hold a referendum on Britain’s EU membership in 2017. Costas Milas argues that talk of an exit from the EU has been a hugely unnecessary distraction that has led to economic uncertainty and higher borrowing costs. He shows this by plotting the 10-year UK yield together with the Google trends search queries index for “BREXIT”. Policymakers […]

The biggest threat to Britain’s credit rating is a possible exit from the EU

In advance of David Cameron’s now postponed speech on Europe, Costas Milas explores the ramifications which the prospect of an exit from the EU might hold for the UK’s credit rating.  Prime Minister David Cameron is preparing for a major speech in the Netherlands which is expected to shed some light on the future of Britain’s relationship with our European partners. […]

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Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported
This work by British Politics and Policy at LSE is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported.