UK slowly slips down economic league tables

Article Abstract:

The UK has been in relative economic decline since at least 1870, according to professor Nicholas Crafts of the London School of Economics. Real GDP per head in the UK was the 17th-highest in the world in 1994, from 11th in 1979, indicating that successive Conservative governments have not halted the country's economic decline. However, it is also important to realise that these figures do not take account of hours worked and that some of the countries which have become more powerful than the UK since 1979 in terms of GDP cannot be directly compared with the UK.

Economic development

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The role of luck in the Bank's policy dilemma

Article Abstract:

The short-term performance of the UK economy is very likely to prompt the government to make a serious error of judgement in determining economic policy. The windfall payments from building societies which many people are receiving are a particular barrier to sound economic policy, especially as the government can do very little to prevent people spending this money. Macro-economic conditions have tightened considerably recently, and it is very hard for the Bank of England to assess whether this will be sufficient to ensure that the economy slows down in 1998.

Analysis, Economic policy

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Prompt action needed from Bank

Article Abstract:

The Bank of England's Monetary Policy Committee has not yet reduced base rates sufficiently for monetary policy to become neutral. A neutral level for nominal base rates would be around 5.5%, and this means that current rates, at 6.25%, are still too high. It can be argued very convincingly that the Monetary Policy Committee should take rapid action to reduce base rates, possibly even below neutral. Under the 'Taylor Rule,' base rates would fall to below 5% by the end of 1999.

Interest Rates

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