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I like Christmas, but the period leading up to it is always one of high anxiety for me. It’s about shopping for presents. I hate it but I’m boringly Old School and still try to get appropriate gifts for people. I never learn.
In this, I take after my mother, who was collecting and immaculately wrapping presents from August onwards every year. It was awful for her in her last three years when, immobilised after a stroke, she was unable to potter round the shops as she had always done.
Sadly I’m not as organised as she was. I tend to leave it till well into December. This means I trail round a ram-packed Westfield desperately searching for something that might momentarily divert my niece’s daughter while wondering just how many previous times I have bought gloves for my sister-in-law. Nowadays, too, I am often to be found scouring websites at one in the morning with three days to go to The Big Day.
I usually end up buying everybody two or three things, working on the principle that at least one of them will please. I live in mortal fear of those insincere thankyous, which I’ve probably offered too many times myself.
We normally get it wrong. Brits return hundreds of thousands of gifts every year, the numbers accelerating now so many are ordered online. Trying to guess what people would really like is next to impossible, and asking them outright normally only produces non-committal answers.
Of course, any rational person would just email Amazon vouchers. It would save you the hassle and probably make the recipient happier.
There’s probably a public policy lesson in this. Politicians seem increasingly to want to give people things — free school lunches, cheap electricity, or free bus passes. An outfit based at University College London wants to give people ‘universal basic services’, including free internet access, housing, and even food. They draw an analogy with the NHS and free state schooling, though some of us might argue that these examples don’t do as much for their case as they think.
But, just as unwrapping a scarf or a foot spa may not please everyone on Christmas morning, it seems unlikely that our governments would get it right except by chance. Most of us, whether keeping our income after tax or receiving pensions or state benefits, would prefer to buy things for ourselves rather than have choices made for us, however kindly.
Still, I’ll keep my fingers crossed that this year Santa brings you something you like. Happy Christmas!
Len Shackleton
IEA Editorial and Research Fellow
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Should we cancel Christmas gift buying? ([link removed])
Former IEA Head of Public Policy Ryan Bourne, IEA Blog ([link removed])
Festive utility… Some economists have argued that cash is the optimal form of Christmas gift. But there might still be a rational case for making some extra effort.
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** Bank of England needs to change tack on interest rates ([link removed])
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The Office for National Statistics released new data this week finding that inflation fell lower-than-expected 3.9 per cent in November. The IEA’s Julian Jessop responded ([link removed]) :
* The sharp fall in inflation in November makes the Bank of England’s position on interest rates look even shakier.
* Almost every leading indicator has been pointing firmly downwards for some time, notably the monetary aggregates, but some on the Monetary Policy Committee still want to raise rates further
* In reality, inflation is well on track to hit the MPC’s two per cent target in the first half of 2024, which would be at least a year earlier than the Bank has been forecasting. Deflation is now the bigger risk and interest rates are too high.
* Unfortunately, the Monetary Policy Committee has continued focus on hypothetical ‘second-round effects’ and ‘wage-price spirals’. But with pay pressures now easing too, the MPC will soon run out of reasons not to cut rates. The longer the Bank waits, the greater the risks that the economy is tipped into a recession that is wholly unnecessary to bring inflation down.”
At its last meeting in November ([link removed]) , the IEA’s Shadow Monetary Policy Committee called for a cut in interest rates to avoid recession.
** Cut interest rates now...or risk UK falling into a damaging recession
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Julian Jessop, The Daily Express & The Daily Mail ([link removed])
Behind the curve… In November, the Bank of England forecasted inflation to average 4.4 per cent in the first quarter of 2024 and not return to the two per cent target until 2025, but it has already fallen to 3.9 per cent.
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Serious institutional problems at the Bank of England ([link removed])
Julian Jessop, talkTV ([link removed])
Faulty forecasting… It’s too easy to attribute all the blame to the Bank’s leadership. A more holistic analysis of the central bank’s decision-making is necessary.
Inflation concerns vindicated
Shadow Monetary Policy Committee featured in The Herald
Interesting company… Voices ranging from the Unite union to the IEA SMPC ([link removed]) have been warning for months that the Bank risks overcorrection.
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Is printing too much money the real cause of inflation? ([link removed])
Julian Jessop, The Spectator ([link removed])
Follow the money… In September, Julian outlined why the supply of money is essential to understanding inflation. Just as the Bank ignored the money supply growth during the pandemic, it appears to be ignoring its decline in the second half of 2023.
IEA Latest.
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Britain’s only growth area is regulation and red tape ([link removed])
IEA’s Matthew Lesh, The Daily Telegraph ([link removed])
A digital backwater… The Adobe/Figma case is the latest example of an out-of-control Competition and Markets Authority. Excessive intervention and the forthcoming Digital Markets, Competition and Consumers Bill are risking Britain’s investment environment ([link removed]) .
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New obesity stats require scrutiny ([link removed])
IEA’s Christopher Snowdon, talkTV ([link removed]) & Times Radio ([link removed])
Claims worth debunking… Does anybody truly believe that the NHS is spending the equivalent of over half its annual budget on treating obesity?
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Are Trade Barriers Growing, and Why? | IEA Podcast ([link removed])
Matthew Lesh interviews Philip Thompson, IEA YouTube ([link removed])
Trading-down… The enormous global reduction in trade barriers during the second half of the 20th Century has been a force for historic prosperity. But is progress receding?
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Nimby MPs have hobbled Gove’s housing plan, Tory manifesto author says ([link removed])
Matthew Lesh, The i ([link removed]) & Press release ([link removed])
Tinkering at the margin… The government made some welcome changes to the planning system this week but still refuses to tackle the key causes of the housing crisis.
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Climate border tax could cost British customers and industry ([link removed])
Energy Analyst Andy Mayer
Crony carbon tax… A properly designed carbon border adjustment mechanism (CBAM) would work to internalise carbon externalities. But there is a risk that the government’s new CBAM could benefit a small group of well-connected and politically favoured sectors at everyone’s expense.
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Britain is going cashless – and that’s fine ([link removed])
Communications Officer Harrison Griffiths, IEA Blog ([link removed])
Cashless frenzy… A decade of rapid advances in financial technology has already moved the UK towards being a cashless society. But banning cash would be damaging, unnecessary, and counterproductive.
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Social media can be good for young people ([link removed])
Matthew Lesh, The Critic ([link removed])
Safety-ism runs riot… Like almost anything else, the internet can be dangerous for young people, but it is now an essential part of growing up and the government has no business cracking down on its use.
IEA Insider.
** The Road to Freedom: Estonia’s Rise from Soviet Vassal State to One of the Freest Nations on Earth ([link removed])
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The latest instalment in the Realities of Socialism ([link removed]) series focuses on Estonia’s journey from Soviet socialism to free market prosperity.
Read The Road to Freedom: Estonia’s Rise from Soviet Vassal State to One of the Freest Nations on Earth ([link removed]) , by Peter J. Boettke, Matthew D. Mitchell & Konstantin Zhukov to find out more.
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