News: "Trump applies tariffs to US imports." Economists: "That's really daft." UK Govt: "Sure is. That's why we're going to tax our exports instead." Economists: "..."

Aah, Budget week.

Super interesting (and technical!) blog on bond markets and budget reaction. One thing not mentioned is US markets will be shutting down on Budget Day ready for Thanksgiving. With a desire to manage closing positions and much less liquidity in global markets the day after, movements could be large.

This is a good piece. One thing particularly leapt out for me: "Assumes a sharp distinction with delivery: policy is mainly central, elite; delivery is mainly local, frontline — admirable but lower." The huge disconnect between ideas and delivery is a big problem. "Logistics trumps strategy" etc.

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The behavioural incentives mount when marginal tax rates are 42% (40% IT, 2% NI); not too much of an issue when few were in scope. This far down the distribution, many people will hit this for some period of working life. Add in student UG loan and for many it's 51%. 40% of London FT workers caught.

The OBR hath given: +£10bn of headroom. Putting aside the fact the OBR may taketh away in a future year, the govt has already paid its political costs for tax rises. It will be judged in 2029 on whether the country is better. It is more likely to be better with cash. Why not just take the "win"?

Just catching up on this (excellent) podcast. It points out (amongst lots of things - go listen!) something which I really hadn't realised. The Budget is scheduled for the day before Thanksgiving. That means the bond markets are going to be seriously short on liquidity the day after.

"For too long, Britain has been held back by governments that, because they lack a relentless focus on long-term ends, are buffeted about by events." Kier Starmer, Labour Manifesto 2024

Apologies to all my clients who I'm delivering post-Budget presentations to this year, but we're going to need a considerably longer slot.

Does the government have enough planning skill to both think this up and pull it off? Anyway, even if so, it only helps you *now*. The real problem still exists.

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One can't help but wonder if anyone in HMT has ever heard of the idea of tax morale. You might find it easier to raise more revenue if it's somewhat higher.

Budget chatter reverberates everywhere ("will she, won't she, we don't know"), but this, reported by Sky News, is intriguing. 'Rachel Reeves is unlikely to hike these taxes because the Treasury says those earning £45,000 or less qualify as "working people".' Higher rate threshold to come down?

Looking forward to this. One reason why I'm dubious about killing NI and switching it onto IT (both IFS and Mirrlees Review say we should) is that the UK has never had a proper debate about a contributory benefits system, particularly around the issue of tax morale.

This week I have mostly been reading ... @theifs.bsky.social 1978 Meade Report: The Structure and Reform of Direct Taxation.

As David Hume might have said, "Empires may rise and fall; liberty and slavery succeed alternately; ignorance and knowledge give place to each other; but profit per partner will still remain, and will never be affected by the revolutions of human society." www.ft.com/content/d3aa...

Hadn't realised that Grimshaw had died, and now Farrell, too. Fascinating architectural practice. Plans for an FT obit?

I feel that the argument for digital ID cards could be more easily won if government focused on how they can strengthen the citizen against the state. As someone who's in the process of moving house, having to do five separate ID checks (and being charged for some of them) has been a real pain.

Today I will mostly be wrestling with the OECD API. Thoughts and prayers appreciated.

@alphaville.ft.com is always worth reading for many, many reasons, but the occasional sarcastic digs are always up there. Not content with aiming at the Bank of England's communications on QT (answer in two minutes), today the target is French diacriticals: Sóćíéťé Géńéřáľë

Monthly GDP statistics: too volatile, and draw too much focus onto short monthly changes. The @financialtimes.com had a piece last week ("Abolish monthly UK GDP") and the ONS may have just complied, but not by abolishing it (that would be daft) ... 🧵(1/7)

Is there any other senior politician who has been sacked three times in their career?

Something else I've been looking into over the past few months (still need to finish the model for what Sched A would look like today), but this debate from 1960 on Sched A relief is enlightening: api.parliament.uk/historic-han...

Great thread and article linked here from @jpspencer.bsky.social. There's also a pre-/post-Covid story here with the North generally, and driven by the city regions, which shows their growth has outperformed the UK since the pandemic. Working on more research on this over coming months.

Leaving aside the fact that a 14-month-old government is having yet another "reboot" (how many is this now?), this is an important point. A common sign of failure (business as well as politics) is the inability to coherently separate and manage the operational from the strategic.

Bonne rentrée! After the August break (and a somewhat enforced break for personal reasons in June and July), it's good to be fully back at the desk for the big push through to Christmas. 1/2

Well, this is an interesting development in the area of de minimis customs exemptions. The US, EU and UK have been thinking about removing these entirely, so one to watch. on.ft.com/43oMhIC

Interesting new publication today from @niesrorg.bsky.social on seasonally-adjusted inflation series. #EconSky

Do you routinely work in the late-night economy? If so, come to a meeting at 9am ... 🤦‍♂️

You're reborn as a cartoon character. Who are you?

Good news from the Office for National Statistics this morning: SIC2026 is coming! Screenshot from the morning email, latest update on their website is here: consultations.ons.gov.uk/external-aff...

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This is one of those things that has puzzled me for years. Does anyone know why the UK chose to levy the thing it wanted more of, and not to levy the thing it wanted less of? Obviously politics will be a (large) part of it, but from the economic point of view this was always mad.

The National Rail Conditions of Carriage have always imposed a limit on the number and size of pieces of luggage that you're allowed to take on a train. It is (like many UK laws) simply not enforced. (See also that playing music out loud is also prohibited.)

And you geographers complain when boundaries move every few years.

We go live to the West Wing for the current tariff policy decision-making meeting.

Modelling things in a world of intra-day tariff changes. Time for a negroni.

So, China has retaliated. The EU has retaliated. The UK is likely not large enough to make a material difference, though the risk of dumping is one the UK will have to seriously consider. For now, playing the WOPR card is probably for the best. For now.

For a government supposedly keen on thinning out the regulators and the QUANGOs, setting up a *new* body to look after what the FCA, NCA and HMRC already do seems, well, not exactly in-keeping with current policy. Does this government have any idea what it actually wants?

Now for a fun (for some definition of fun) couple of days in Oxford for @theifs.bsky.social residential conference.

Well, it's one way to keep the NHS budget down. Simply ask people to work for free.

Uh, this is pretty important. www.wired.com/story/underg...

Good piece here. Britain's public services aren't functioning.

Jordi rightly points out how odd the world is. But I'm really here to say that, as someone who speaks Spanish and French (plus tourist-level German and Italian), every post I read in Catalan makes my brain hurt. I can read it, but ... it's ... as they say, vaja.

Yep. Did some work on this on green industries in an old job: www.progressive-policy.net/publications.... Some places might really struggle Either way it's not easy. For the East Mids you might say wind down "traditional manufacturing"...that will invite some very tough conversation with business

Oof. I've read all of the @dannyblanchy.bsky.social papers on underemployment (and implemented the methods a few times, too), but never realised there was a book. Ordering this now.

One of the biggest questions for the (still) forthcoming industrial strategy is when an economy is at full capacity, where are the workers for the "top 8" coming from? It will be interesting to see if they answer "which sectors will we allow/support/encourage to contract to support our goals?".

In today's spam: nothing says "high-performing digital solution" (mobile banking app!) like an agency running itself from an aol.com email address. I'm being spammed from the 1990s.

I've done and do a lot of policy teaching and the answer whenever anyone asks "what should I do with income tax, CGT, welfare, infrastructure, etc" is always "what do you want to achieve, Minister?". Economics and policy folks and theory have lots of answers, but often this one is crucially missing.