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Dr Arno Hantzsche

Posted: 29 May, 2019 - 18:00

With a Conservative leadership contest in full swing and differing interpretations of what European election results mean for EU withdrawal, the public debate has yet again turned to a no-deal Brexit, i.e. leaving the European Union to trade on a minimum set of rules defined by the World Trade Organisation. These political shenanigans do not change the economic arithmetic whereby leaving the EU without a deal would inflict a significant economic cost compared to the alternatives.

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Dr Arno Hantzsche

Posted: 26 April, 2019 - 16:41

At this week’s meeting, the Bank of England’s Monetary Policy Committee is unlikely to adjust the monetary policy stance substantially. Our latest economic forecast published last week suggests that the MPC should wait until the middle of next year before lifting Bank Rate above its current level of 0.75 per cent. This is because even though a soft Brexit seems more likely now it is offset by a weaker outlook for global demand and chronic levels of uncertainty at home.

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Sathya Mellina

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Dr Arno Hantzsche

Posted: 1 November, 2018 - 13:25

Today, the Bank of England published minutes of the meeting of the Monetary Policy Committee that came to an end yesterday. At the meeting, the MPC decided to keep interest rates unchanged. The minutes also record the discussions that took place at the MPC about the Bank’s appropriate monetary stance. At NIESR, we have started quantifying the information content of MPC minutes and construct an index of the monetary stance.

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Dr Arno Hantzsche

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Amit Kara

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Cyrille Lenoel

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Dr Rebecca Piggott

Posted: 1 August, 2018 - 14:55

The UK government published a White Paper on 12th July outlining its preferences for a future relationship with the EU. In this blog we compare the proposals outlined in the White Paper against other EU free trade agreements (FTA) and also estimate the impact on the UK relative to our central forecast, published in August 2018, that assumes a soft Brexit.

Our results suggest that the UK is looking for a trading relationship that is similar in scope to the arrangement between the EU and Switzerland. If that is indeed the case, we believe that the EU will insist that the UK make concessions on the freedom of movement of people and also ask for a budgetary contribution to EU programmes related to the single market.

We estimate that the economy will suffer an annual loss of around £500 per head over time if the White Paper proposals are broadly agreed.

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Dr Arno Hantzsche

Posted: 24 May, 2018 - 12:05

A debate is raging among both academics and policymakers whether wage growth and unemployment still form a negative relationship, in other words, whether the wage Phillips curve is alive. 

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Dr Arno Hantzsche

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Amit Kara

Posted: 16 February, 2018 - 12:41

Recent leaks of a Brexit impact study produced for the Department for Exiting the EU have reignited the debate about the costs of leaving the EU without a comprehensive trade agreement. The reported magnitude of estimated aggregate effects for such a ‘no-deal’ scenario is very similar to estimates published independently from each other prior to the Brexit referendum and also in line with updated work presented in our latest National Institute Economic Review: a loss in annual GDP relative to what it would otherwise have been of 7 to 8 per cent within the next 10 years. Put differently, annual income per head would be up to £2,000 less, compared to a scenario in which the UK remains in the EU’s single market.

What remains less clear in the debate is how these numbers came about, leaving room for political attack. This blog explains the assumptions behind our analysis. 

 

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Dr Arno Hantzsche

Posted: 19 December, 2017 - 16:07

A previous blog discussed the implications for government bond yields of changes to euro area monetary policy, namely a reduction of assets purchased by the European Central Bank. However, this is unlikely to be the only development that will affect long-term interest rates European governments pay on their debt, and ultimately firms pay to fund investment. A second development, which may be taken into account by financial markets, is the intensifying debate about institutional reforms in the euro area.

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Dr Arno Hantzsche

Posted: 24 October, 2017 - 16:40

On Thursday, 26 October, market participants expect the European Central Bank to set out its plans for the future of its asset purchase programme. After its last Governing Council meeting, President Draghi said that the ‘bulk of decisions’ concerning quantitative easing is likely to be taken in October. What many observers wonder is: will lifting unconventional monetary policy measures lead to a renewed divergence of euro area government bond yields?