Michael Ellington

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    Are we witnessing a ‘deal dividend’ effect on the economy?

Are we witnessing a ‘deal dividend’ effect on the economy?

The latest GDP data for 2018 shows an annual growth of about 1.6%. This may be reflecting expectations of an impending Brexit deal which would greatly reduce policy uncertainty, write Costas Milas and Michael Ellington. But if this growth is indeed conditional on a deal, no deal will result in no dividend.

The Office for National Statistics (ONS) has just […]

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    Pushing the BoE to the limit: what a no-deal Brexit will mean for UK exchange and interest rates

Pushing the BoE to the limit: what a no-deal Brexit will mean for UK exchange and interest rates

The absence of a trade agreement between UK and EU will yield further depreciations of the pound relative to leading currencies, explain Michael Ellington and Costas Milas. This will then lead to a sharp cut in the Bank of England’s policy rate and to another round of quantitative easing. In other words, a no-deal Brexit will push the Bank […]

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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 […]