Believe it or not, there was more good news than bad on the UK economy last week. But let’s start with the ugly. Inflation again surprised on the upside in March, with the CPI measure of food prices up 19.1 per cent on the same month a year ago.

Fortunately, there is also a glimmer of light. Producer price inflation in the food sector has been falling for six months, and the UN index of global agricultural commodity prices has been dropping outright for a year. With the usual lags, shop price inflation should also start to fall very soon.

Of course, this has not prevented the usual suspects from demanding that the government intervenes to fix prices. It has become fashionable to blame continued high inflation on ‘profiteering’ and ‘cartels’, and even rename it ‘greedflation’.

Jeremy Corbyn quickly blamed the latest bad news on ‘corporate greed’ and called for ‘price controls’ on staple foods. This is regardless of what price controls could mean for supply, or what is happening to costs, or the overwhelming evidence that price controls almost always backfire.

The UK supermarket sector is super-competitive, and lower costs are already being passed on to consumers. For example, Tesco cut the price of milk earlier this month (for the first time since May 2020), a move which Sainsbury’s, Aldi and Lidl quickly followed.

In the meantime, rather than interfering with market signals, the government should limit itself to topping up the incomes of the most vulnerable households and tackling any problems on the supply side.

The same point applies, of course, to the rest of the economy. Rather than capping rents, the government should remove restrictions on the supply of housing. Instead of subsidising everybody’s energy bills, the government should target support at those that really need it – and ask why the cost of energy is so much higher in the UK to begin with.

Unfortunately, calls for ‘something to be done’ often lead politicians to back ‘quick fixes’ that worsen the problem. The IEA will continue to bang the drum for free-market solutions that actually tackle the underlying problems.

Julian Jessop
Economics Fellow, Institute of Economic Affairs

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NOT ADDING UP

On Monday, Prime Minister Rishi Sunak castigated the UK's 'anti-maths mindset' and re-announced plans to make maths compulsory till 18. Sunak claimed that improved numeracy rates could translate to increased economic growth.

IEA Director of Public Policy and Communications Matthew Lesh forcefully responded that “maths education is no silver bullet,” pointing to the Soviet Union’s lacklustre growth despite strong technical education:

Matthew's response was Guido Fawkes' quote of the day and quoted in The Independent, i News, City AM, The Guardian and Reaction.



In City AM, Matthew pointed out that increased STEM education will not make up for the UK's stagnant economy and broken planning system:

"The UK has some of the world’s top universities, a record-high number of graduates, and impressive scientists. But none of that matters when a housing shortage prevents those skilled graduates from living in cities where they would be most productive. Nor does having top scientists matter when they cannot build successful companies – because of a shortage of laboratory space or barriers caused by red tape."

NEW INTELLECTUALS CONFERENCE

Last week, IEA Communications Officer and Linda Whetstone Scholar Reem Ibrahim attended the New Intellectuals Conference, hosted by the Ayn Rand Centre Europe in Belgrade, Serbia.

This year's conference theme was Love. Reem delivered a talk about how it is in our self-interest to cooperate and trade with one another. In a market economy, for an entrepreneur to be successful, they must provide something that other people want.

LIBERTY IN GHANA

In partnership with the Institute for Liberty and Policy Innovation (ILAPI) in Ghana, we have been promoting  entrepreneurship and free markets across the region.



Using the IEA’s ‘An Introduction to Entrepreneurship’ by Dr Eamonn Butler, the ILAPI have held three events recently with a combined attendance of over 2150.



One event in particular had over 1200 students in attendance. Peter Bismark Kwofie of ILAPI hosted the event at University Of Education, Winneba, where lectures were held on the importance of entrepreneurship.



Due to the success of the student events, the team at ILAPI were invited onto Afeema FM in the Eastern part of Ghana to discuss the ideas in the book. 

IEA DIGITAL

The IEA's YouTube channel is home to all of your digital free market needs. From lectures with leading thinkers to informative public policy explainers, we have it all. On this week's schedule, we had:



TERF war... The IEA was delighted to host a conversation between IEA Head of Cultural Affairs Marc Glendening and author and journalist Helen Joyce to discuss her latest book, 'Trans: When Ideology Meets Reality'.



IEA Podcast... In this week's podcast, Matthew Lesh sat down with Dr Jón Danielsson to discuss financial regulation and banking crises. Danielsson is the Director of the Systemic Risk Centre at the London School of Economics and author of 'The Illusion of Control: Why Financial Crises Happen, and What We Can (and Can’t) Do About It’.

IN THE MEDIA



Dodgy data... In his fortnightly column for The Times, IEA Director General Mark Littlewood highlighted faulty methodology can produce misleading data:

“A prime example arose a few days ago when Angela Rayner, Labour’s deputy leader, suggested that an average earner would have to work for 400 years before they benefited from Jeremy Hunt’s recent abolition of the cap on tax-deductible pensions savings.

"In trying to reverse-engineer how Rayner got to her jaw-dropping figure, it seems likely that she simply failed to account for the magic of compound interest. If we are willing to entertain a world in which life expectancy has increased so dramatically that we can contemplate being in work for four centuries, some rudimentary maths will show how inaccurate her calculations are. A single sum of £1,000 invested today at a real interest rate of about 2 per cent will yield you a pension pot of about £3 million when you retire in the year 2423."



Encrypted exit... Matthew Lesh also wrote for The Spectator on the threats posed to privacy by the Online Safety Bill after seven messaging services warned about risks to encryption:

“Some contend that privacy should be sacrificed in the fight against child abuse. But there are clearly limits to this logic. Few would consent to the state putting CCTV in everyone’s bedroom to crack down on the abuse of children. But that is effectively what a technology notice could mean: a CCTV camera in everyone’s phones."



Panic at the Crucible... IEA Head of Lifestyle Economics Christopher Snowdon wrote for Spiked! after a radical environmentalist activist disrupted the World Snooker Championship:

“It is not a novel observation that these tactics are self-defeating. Just Stop Oil and its fellow travellers’ sole contribution to civilisation has been to disprove the theory that there is no such thing as bad publicity. While Europe suffers from a painful shortage of fossil fuels, stunts from the likes of Just Stop Oil only serve to remind the public that they are a bunch of idiots. At least when they blockade petrol stations, there is some sort of coherent message. The link between snooker and the oil industry, by contrast, is not immediately obvious.”



White collar incompetence... IEA research on the Serious Fraud Office was referenced by the Law Society Gazette:

"Last month, the Institute of Economic Affairs thinktank concluded that the SFO ‘must be held to have failed’ and proposed 'radical institutional change'. It also called for legal changes: in the rules of disclosure; corporate liability, and the use of juries in complex fraud trials."



Throttled wages... IEA Editorial and Research Fellow Professor Len Shackleton was in the i News on the latest ONS labour market data:

“This labour market tightness has pushed up pay. However, continuing rapid inflation means that real earnings are declining. For the moment, economic policy must focus on bringing inflation down and thus enabling real pay to start growing again in the medium term.”



Unintended consequences... IEA Energy Analyst Andy Mayer was quoted in City AM warning that Ofgem's plan to suspend forced pre-payment meters could raise costs across the sector:

“Putting up the cost of serving vulnerable customers with expensive interventions, however well intended, risks suppliers avoiding such customers, as to take them on in larger numbers than rivals renders them uncompetitive.

“This in turn will compel the government to create either a social supplier of last resort, or subsidise social tariffs, which will spread the risk, but encourage welfare fraud to avoid higher bills.”



From my cold, dead hands... IEA Office and Studio Manager (and resident American) Zachary Vicario wrote for 1828 on the liberal case for the right to bear arms:

"The Second Amendment serves as a crucial protection of individual freedoms and the right to bear arms. The ability to defend oneself and one’s property is a fundamental human right, and the Second Amendment ensures that citizens can access the means to exercise that right."

IEA BOOK CLUB

The IEA Book Club is pleased to announce a number of forthcoming events with a variety of fantastic authors.



IEA Book Club with Bruce Caldwell:

The IEA Book Club will be hosting an event with Bruce Caldwell on his latest book, 'Hayek: A Life, 1899-1950'. This event will take place on Monday 24th April from 17:30 – 19:30 at the IEA Westminster offices. Chairing this event will be IEA Law and Economics Fellow Dr. Cento Veljanovski.

IEA Book Club with Paul Johnson:

The IEA Book Club will be hosting an event with Paul Johnson on his latest book, 'Follow the Money: How Much Does Britain Cost'. This event will take place on Wednesday 7th June from 17:30 – 19:30 at the IEA Westminster offices. Chairing this event will be Matthew Lesh.

IEA Book Club with Ross Clark:

The IEA Book Club will be hosting an event with Ross Clark on his latest book, 'Not Zero: How an Irrational Target Will Impoverish You, Help China (and Won’t Even Save the Planet)'. This event will take place on Tuesday 13th June from 17:30 – 19:30 at the IEA Westminster offices. Chairing this event will be Andy Mayer.

These events are for IEA Book Club members only, for details on how to join, click here.

STUDENTS AND TEACHERS



Freedom Week... Applications are now open for Freedom Week, a week-long series of seminars delivered by top liberal thinkers! Click here for details on how to apply.



Join the IEA's internship programme!... We are now welcoming applicants. From editorial work to aiding our operations team, there are a variety of opportunities on offer for sixth form and university students. Want to work for the UK's original free-market think tank? Click here to find out more and submit your application.

Our current cohort of talented interns put together a video providing an insight into what you can expect, which you can watch here.