Economists generally agree on few economic theories, but the negative impact of tariffs is one of them. The theory advocating for free trade without tariffs or barriers between countries was first articulated by Adam Smith in 1776 in “The Wealth of Nations,” showing that even if a country has an absolute advantage in producing goods, …
UK can cut interest rates a lot
In recent months, official interest rates have been cut worldwide as inflation has fallen sharply from the peak of over 9% following the end of the Pandemic and Russia’s invasion of Ukraine, which drove up global food and energy prices, see chart 1. Global price inflation has fallen to the rates before the Pandemic and …
This week, the Bank of England’s decision should be a no-brainer – just not in the way the market thinks
Financial markets are betting this week that the Bank of England will not cut its key interest rates but leave them on hold at 4.75%. The market consensus from Trading Economics is that the 9-strong committee on Thursday, the 19th, will vote 8:1 to leave the UK Bank rate at 4.75%. That is despite annual …