Economics & Social Policy

Negative interest rates offer only a sugar high. They won’t revive monetary policy

Both Wall Street and the City of London are speculating whether the next innovation in monetary policy will be the use of negative interest rates as a deliberate tool. The new Governor of the Bank of England, Andrew Bailey, has changed the Bank’s position from that of the previous Governor, Mark Carney, who made clear that negative interest rates were not a proposition he was seriously considering. The central bank’s Chief Economist, Andrew Haldane, and one member of the Monetary Policy Committee (MPC), Silvana Tenreyro, have canvassed the idea.

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Helping Britain’s start-ups

The Government has outlined an audacious package of measures aimed protecting as much of the UK’s productive potential as possible. But it is an outlier among comparable European economies in that it is yet to announce measures to help start-ups and pre-revenue firms. Jan Zeber and Dr Gerard Lyons outline the unique challenges faced by those firms and what can be done to support them.

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Speed, Scale and Simplicity

The government has outlined an audacious package of measures aimed at dealing with the economic consequences of COVID-19, but in a fast- moving environment, it should be no surprise that policy has to continue to evolve. There have already been four fiscal packages in recent weeks, beginning with the Budget, then one focused on the corporate sector, the next on employees and last week’s targeting the self-employed. This has been supported by monetary policy. Despite this, further action is needed supported by another fiscal boost and further monetary action. It is not only the scale of the stimulus that needs to increase, but the execution of the policies. Also, the policy reaction on job protection has been impressively large, but the lack of any precedent means we cannot be certain how the measures will work.

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Limiting the Economic Impact of the Covid-19 Virus

On Thursday, the Chancellor unveiled his fourth round of policy measures to boost the economy during the Coronavirus crisis. He announced what he called a coherent, coordinated and comprehensive scheme for the self-employed. This positive approach from the Chancellor, and the speed of the Government’s response, is worthy of congratulations. Yet inevitably, in this fast-moving crisis, there remain some areas to iron out, largely linked to the policies’ likely execution and administration. The biggest challenge is the delay, as the measures unveiled will take a couple of months to implement, and the strain that this may place on those self-employed who do not have access to income during this time.

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Time to rethink macroeconomic policy

A new Chancellor of the Exchequer and a new Governor of the Bank of England offer the opportunity of taking a fresh look at not just monetary policy, but macro-economic policy as a whole and the role of fiscal policy within it. A decade after the Great Recession, there are profound questions that policy makers should be exploring.

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Putting consumer welfare at the heart of competition policy and market regulation

Related Content   The UK competition authorities, having for years been behind the curve in taking competition and consumer welfare issues with the seriousness that they deserve, are now upping their game significantly. The CMA is demonstrating much greater vim and...
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Latest Economics & Social Policy Publications

Latest Economics & Social Policy Blogs

20 years of the euro

20 years of the euro

Twenty years after the creation of the euro, a powerful cocktail of forces have made the southern economies of Europe permanently uncompetitive compared to the northern economies and the wider international economy. Yet the currency may limp on for years yet

The ‘end of austerity’ and what should come next

The ‘end of austerity’ and what should come next

Policy Exchange’s Warwick Lightfoot – a former Special Adviser to three Chancellors – says the Prime Minister’s announcement that ‘austerity’ is ending is good politics. But increased public spending doesn’t always mean better public sector productivity, he warns.

Latest Economics & Social Policy News

Latest Economics & Social Policy Events


  • Friday, 6 April, 2018
    8:45 - 10:00

Policy Exchange welcomed Siv Jensen, Norwegian Finance Minister and leader of the Progress Party, who said that British and Norwegian views on the single market in financial services have often been aligned and reflected on the challenges for monetary policy, including the lowering of inflation targets and an increase in interest rates to ensure credit risk is appropriately priced. Singling out the housing market, she argued that home ownership is cherished by people in both Norway and Britain – and that a balanced approach to regulation is required to avoid asset booms (and busts).

Venue:  

Address:
Policy Exchange, 6th Floor, 8 – 10 Great George St, Westminster, London, SW1P 3AE, United Kingdom


  • Tuesday, 30 January, 2018
    8:00 - 9:00

The Chief Secretary to the Treasury, Rt Hon Liz Truss MP, made the case for the free market in an event at Policy Exchange. Truss said that free enterprise has huge economic benefits, driving down prices and creating growth and jobs, and is intensely democratic and open, breaking down monopolies, hierarchies and outdated practices.


  • Thursday, 7 December, 2017
    12:00 - 13:45

How can the UK ensure that it is competitive post Brexit? Dominic Raab MP joined an expert panel to offer answers to this question which will have a significant impact upon the wealth of the country following Brexit. This event marked the launch of Everyone has a part to play: Improving the UK’s competitiveness post-Brexit by enhancing the rule of law, a new report from Linklaters on this once-in-a-generation opportunity to reinforce the rule of law and hence the UK’s economic competitiveness and prosperity.

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