The OBR’s supply-side review will have political implications

Here’s a link to a piece published in CityAM this morning that explores the political implications of the Office of Budget Responsibility’s decision to review over the summer its estimates of the supply side potential of the economy. Since the ability of the economy to grow without causing inflationary pressures is linked to estimates of the structural deficit, any change will affect the perceived success – or otherwise – of the government’s attempts to meet its self-imposed target to eliminate it.  A smaller structural deficit and the government looks economically competent; a larger one and the rhetoric will shift to the need for longer-term solutions.

Not much evidence for Piketty thesis in Britain?

The Office of National Statistics today published its long-awaited third data point on the distribution of wealth amongst households in Britain, covering the period from 2010-12. This is the third data point since 2006, enabling us for the first time to explore whether the Piketty thesis – that wealth must tend to concentrate at the top – is valid. What today’s data shows is that the wealth distribution in Britain hasn’t become more unequal in recent years (although it was pretty unequal to start with) and within that there are some encouraging trends, for example in the distribution of pension assets across the population. Here’s a piece published today on the Guardian’s comment is free. 

It’s the assets, stupid

We should dust off the asset-based welfare textbook, learning the lessons of child trust funds, the Savings Gateway and individual learning accounts, to use the power of time to enable the most vulnerable to take control of their own personal balance sheets. And, at the real bottom end of the pile, for those with negative assets (debts) we should use the concept of household solvency – not simply interest rates – to determine how easy credit should be regulated. – See more at: http://www.progressonline.org.uk/2014/04/09/its-the-assets-stupid/#sthash.SbzFCnm9.dpuf