(3/3).
..that mean government cannot increase (current) deficit much - whatever the fiscal rules.
But none of that stops radical reform of (eg) council tax, social care finance, pensions, etc, etc, or reversal of economically/socially damaging immigration policies...
They also look at the responsiveness of house prices to interest changes (instrumented by local housing supply elasticity) to show that around half of the consumption increase comes from people increasing borrowing when refinancing instead of improved cashflow from lower debt service costs
The headline finding is that a 1pp rate cut leads to a 3% increase in consumption for households with mortgages (0.7% of overall GDP) which matches aggregate estimates of the effect of rate changes on consumption
Reading a really interesting paper (www.lse.ac.uk/CFM/assets/p...) treating the end of fixed-rate mortgage deals in the UK as natural experiments to estimate the effect of rate changes on borrowing and consumption
That being said if trends continue, people retiring in the coming decades will be more likely to be in the PRS. I prefer a more renters, higher state pension, higher mandatory DC pension contribution political economy to the current weak state pension/own outright in retirement one anyway though
Yeah I think the issue here is that targeting 100% replacement of gross income is just not right. You already stop paying NICs and most people also own outright (with most of the rest social renting) in retirement. 100% gross replacement will be >100% net replacement, possibly considerably more!
Things look worse when compared to the "reference living standards" but I just don't find the levels plausible. The "moderate" standard is >90% of my take-home pay and assumes paid off housing, and I earn close to the median salary!
My guess is that people who post about UK politics on here are disproportionately likely to be self-employed and therefore had to/failed to actively opt in to a pension?
I'm a little confused by how people have been talking about this tbh. Most people are expected to reach their target replacement rate (and higher earners are actually the ones less likely to do so)
Unicameralism + PR always appealed to me from an aesthetic perspective, but also needing to build actual majority coalitions to change policy is a big upgrade over both stupid, arbitrary, and undemocratic veto players (US) and elected dictatorship on <40% of the vote (UK)
US: impossible to pass a law unless it is cleverly disguised fiscal policy
UK: elected dictatorship engages in 10 policy u-turns a minute chasing outdated and out of touch caricatures of what the median voter wants
I used to think that veto players in political institutions were an unalloyed bad after becoming politically aware during the Obama administration after 2010, but I'm increasingly sure that the UK's ~zero veto players system is just as bad.
National accounts household income per capita in the UK was converging with Germany in the 1990s and 2000s, but has stalled at around 10% lower since 2010
Per the DWP analysis from last year, someone who follows a typical earnings profile contributing in an auto-enrolment DC scheme is not far off a target replacement rate of 67%. But the default should be higher to account for earning breaks or unexpectedly early retirement
www.gov.uk/government/s...
Short of mass re-education of the British public it's hard not to see increasing default contribution rates for auto-enrolment pensions as the obvious solution to this
Vote shifts July 2024 - April 2026
Labour hold 44% of about 10m voters
31% lost to centre/left (19% Green, 12% to LD) - 3 million
11% to would not vote - 1 million
10% to right (6% to Reform, 4% to Cons) - 1 million
Cons hold 52% of their vote, shed a third to Reform, pick up 1/10 of Reform
Labour: You don't understand we can't change our leader because if they become unpopular we're stuck with them
SNP: About to win a thumping victory with their third leader of this Holyrood term
Given the whole point of the triple lock was to gradually increase the replacement rate of the state pension vs. average earnings why not just do a big one off increase, declare mission accomplished, and then go back to earnings uprating?
Reform, in theory, could have been a gift to Labour: they divided the Right-wing vote. All Labour had to do was govern in a way that held their Center-Left coalition together
Instead, they chose to act foolishly and blow up their own coalition in pursuit of a voting base with no interest in them
Every time I force myself to read one of his columns, I am amazed at the degree of nonsense he gets away with.
There are a lot of reasons for this, but a big one is that people on low rates of hourly pay tend to be in middle income households. Low income is more connected with being out of work or having more household members who are unable to work (e.g. children, people with long-term health conditions).
People also tend to conflate pay compression with falling income inequality, but pay has compressed a lot (particularly since 2020) while inequality is unchanged over the last 30 years
The UK went from having a relatively high 90:10 pay ratio in 2010 to a relatively low one in 2024 compared to other OECD countries, but it's actually still pretty normal by EU standards and notably higher than the Nordics
I know there is (a bit) more to it than this, but the idea that AI could code its way to humanity's demise is really funny to me
Sure. But I guess I'm more interested in whether the motivation is more about avoiding a decline in consumption or in social rank, relative to expectations (whether that's to match parents or exceed them)
As in preserve their relative social position or as in avoid absolute downward mobility?
Also at least in the US the college wage premium has a long way to fall before I would be worried about skill biased technological change running in the opposite direction of the 1970s to 2010s
I'm a little bit confused by the specific anxiety here because my primary concern about a society where almost all manual labour is done by robots and non-manual labour by AI is how do we socialise the capital income so my standard of living doesn't fall, not how I can feel good about working
Unlike in the US, consumer confidence in the UK seems to have stuck to what you would predict from fundamentals using pre-covid data
