Michael Ellington

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    How Cabinet resignations and the Chequers proposal could destabilise the economy

How Cabinet resignations and the Chequers proposal could destabilise the economy

The stability of UK economy is currently at a critical stage now that Theresa May’s leadership may be challenged following high-profile Cabinet resignations, and depending on how the EU reacts to the ‘soft’ Brexit approach agreed at Chequers. Michael Ellington and Costas Milas explain how the pound’s exchange rate and volatility go hand in hand with peaks in policy […]

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    How should Theresa May respond to Jeremy Corbyn’s customs union plan?

How should Theresa May respond to Jeremy Corbyn’s customs union plan?

Michael Ellington and Costas Milas explain why May should adopt Corbyn’s stance favouring a Customs Union. They show that there is an inverse relationship between business investment growth and economic policy uncertainty and, with Corbyn’s proposal praised by business leaders, such a step by the PM would decisively put the economy first.

The clock is ticking extremely fast, with only […]

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    Government should treat its Brexit studies like working papers: circulate them for feedback

Government should treat its Brexit studies like working papers: circulate them for feedback

With the second Brexit analysis leak, Michael Ellington and Costas Milas write that it is in no one’s long-term interest to keep such studies from experts until they are complete or leaked. Considering that the task of measuring Brexit’s impact is indeed a tall order, they suggest that the process be made more transparent and open to feedback.

The government […]

Budget 2017 and the economy: bad news all round

Following the 2017 Budget, Michael Ellington and Costas Milas offer some first comments on why, regardless of whether one supports Britain’s exit from the EU or not, the current situation is not good news.

To keep Brexiteers off his back, Chancellor Hammond did not spell it out, but Brexit-related uncertainty is taking its toll on the economy: anaemic GDP growth […]

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    Why the Bank of England should change how it publishes the future path of interest rates

Why the Bank of England should change how it publishes the future path of interest rates

The Bank of England’s Monetary Policy Committee should revisit the issue of publishing its own future path of interest rates, argue Michael Ellington and Costas Milas. They review the current process and explain why it is not very effective.

It was widely expected and indeed happened. The Bank of England’s Monetary Policy Committee (MPC) decided, by a 7-2 majority, to […]

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    How will a Bank of England interest rate hike affect the economy?

How will a Bank of England interest rate hike affect the economy?

In anticipation of the Bank of England’s interest rate hike, Michael Ellington and Costas Milas consider the Monetary Policy Committee’s options, and suggest that a hike be avoided until the direction of the Brexit negotiations becomes clearer.

Greek philosopher and mathematician Pythagoras of Samos famously said that “Silence is better than unmeaning words”. This is something that the Bank of […]

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    Brexiteers hope to rebalance the economy towards exports, but this risks proving a naïve myth

Brexiteers hope to rebalance the economy towards exports, but this risks proving a naïve myth

Nine months after the vote, the UK has triggered Article 50. Michael Ellington and Costas Milas explain why we should expect persistent exchange rate volatility and higher borrowing costs once the formal notification is sent to the EU. In this uncertain environment, the likelihood of rebalancing the economy towards export-oriented sectors may prove to be another pro-Brexit myth.

Theresa May […]

Brexit and the Gordian knot of the UK productivity puzzle

Economic uncertainty following the EU referendum, as well as additional political uncertainty stemming from the recent High Court decision to allow Parliament to vote on the deal, might delay the government’s preferred timing for triggering Article 50 by March 2017. There is therefore potential for fuelling investment uncertainty and delaying a steady recovery in UK productivity, explain Michael Ellington […]