I’m optimistic, why aren’t you?

In the FT’s annual new year forecasts, I seem to be one of the only people not forecasting a slowdown in the UK in 2017. Why? Because growth was strong in 2016, productivity is only starting to pick up as the labour market tightens and there’s no evidence of inflation from overheating yet, although of course we may see some from exchange rate depreciation, if that persists. That’s not to say that over the medium-term there wont be negative economic (and other) effects from Brexit, depending on the results of the negotiation. But they will be measured in the medium term, not now.

It’s always a risky thing to point out when one diverges from the crowd, particularly when talking about the future. But I also think you should say it as you see it. So that’s what I’ve done. If I’m proved wrong, for reasons I don’t currently understand, I will say that too.

What the ONS tells us about Piketty

The Office of National Statistics is publishing its latest slew of data on the UK wealth distribution on Thursday, This gives us an opportunity to explore whether the Piketty thesis – that wealth must increasingly concentrate amongst a few – is correct. All is not however as it seems. Research for the Smith Institute suggests that there is an important yet much overlooked cohort of people who own their own homes but have low incomes. Four million households in Britain, to be precise, or a sixth of the total, and by no means all of them are pensioners.  Insofar as these four million do not need to earn much money because they have no housing costs, it could be argued they are the real winners in the wealth distribution. See my Tooley Street Research blog for more