Slowing economies

We now see that most of the main western economies slowed in the first quarter of 2018. Part of this is likely to have been bad weather, possibly with insufficient seasonal adjustments in the figures. The UK economy slowed as  I predicted,  both through the EU slowdown and from the change of  domestic policy designed to slow it. This had nothing to do with Brexit. The Bank’s decisions to raise rates, withdraw substantial special credit lines from the clearing banks, and ask them to rein in consumer and car loan credit have had an effect as expected. The tax rises on Buy to Let, dearer homes and cars have reduced activity and investment. In the months after the referendum vote car sales and consumer sales generally flourished, with good overall growth, before these policy actions were taken to rein it in some nine months later. Shop prices continue to fall, boosting consumers’ effective spending power.

The government should be thinking about what it can do to speed growth up again. Across the Atlantic the Trump tax cuts are having very positive effects on growth and confidence. Consumers have more money to spend. Companies have more money to invest, to grant pay rises and to reward shareholders who in turn can spend more. Many US corporations are busy repatriating cash to the USA, and there have been numerous announcements of pay awards and of increased investment programmes to raise US capacity.

The US has also given itself a big boost by granting more licences to drill for oil and gas, and allowing more pipelines construction to deliver the results. Cheap energy and cheap feedstock for the chemical industry are two important underpinnings of a successful industrial strategy.

It looks as if this year the US is going to grow faster again than the EU, benefitting from a climate that favours enterprise. The US is also capturing more and more of the consumer spending through its highly successful technology based companies. The latest figures from Apple show huge cash generation, whilst Amazon continues to lift turnover from traditional  retailers on both sides of the Atlantic.



  1. Lifelogic
    May 4, 2018

    “The government should be thinking about what it can do to speed growth up again.”

    Not much need to think. Just cut taxes, simplify taxes, cut regulation, cut the parasitic bloated and inept state sector, cut the green crap, cut the attacks on the self employed, cut gender pay reporting etc. get some real competiton in banking, get a rapid clean Brexit and get some real Conservative vision. Cut the payment that encourage the feckless not to get a job.

    In short replace Hammond and May with some real Conservatives.

    1. Lifelogic
      May 4, 2018

      Plus a sensible, fair, points based, quality only immigration policy for all who wish to apply. Easy hire and fire. Fewer people doing pointless valuless degrees and getting practical skills and real jobs. Fewer lawyers, tax planners, litigators and other esentially parasitic activities. Relax planning and OTT green crap building regs.

      A health system that works would be helpful too.

      1. Adam
        May 4, 2018


        Both your above pieces include many actions Conservatives regard as needed.
        Some are obvious, as you indicate, yet not acted upon.
        Some are rather sharp, but toward a sensible direction.
        Even so, whatever state a country is in, a good Govt would take the shortest path to better.

        1. getahead
          May 4, 2018

          Our current Chancellor of the Exchequer works for a particular group of people. He does not work for the good of the country or the plebeians.
          He is as Lifelogic has said many times, a tax and spend Chancellor reminiscent of Labour party chancellors.

    2. Bob
      May 4, 2018

      You’ve nailed it as usual.
      Sadly the Tories now dance to Labour’s tune, they’ve lost their USP.

  2. Lifelogic
    May 4, 2018

    Meanwhile: Ministers have been told Britain will be unable to leave the Customs union before 2023 reports the Telegraph today.

    1. Lifelogic
      May 4, 2018

      Good to see that UKIP voters are returning to support the Tories despite its dithering, rudderless, lefty leadership. It does look like Corbyn can indeed be avoided. Not that many people are taken in by his magic money tree cons it seems.

      But why of why are Hammond and May making so many appalling decisions. We need sensible real small government Conservative policies and vision desperately.

      1. Leslie Singleton
        May 4, 2018

        Dear Lifelogic–It’s not just decisions, though they are bad enough–Mrs May is vapid unauthoritative and uninspiring–Being able only to keep barely a nose in front, if that, of Corbyn and his crowd says it all

      2. Richard1
        May 4, 2018

        We have seen peak Corbyn. With Corbyn leading Labour the Conservatives could win the next election even if Mrs May is retained. With a better leader such as Michael Gove who would have a proper Conservative vision, it could be a good majority.

        1. Leslie Singleton
          May 4, 2018

          Dear Richard–Cannot possibly accept that snake in the grass Gove, who singlehandedly caused all our problems–Boris would actually win some votes, as he of course did to become Mayor of London–Ask yourself how he managed that

        2. Andy
          May 4, 2018

          Corbyn is terrible. Awful. An awful, awful unelectable leader.

          Yet in 2017 we saw the Tory hard-right pensioners could barely beat him. They ended up in a pathetically weak minority government propped up only by a £1bn bung to the DUP dinosaurs.

          Extrapolating the results from last night’s local elections to another general election would see Corbyn perform about the same as last year. Perhaps a bit better as young people are more inclined to vote in national elections than local ones.

          The Tory hard-right pensioners, on the other hand, would LOSE further ground. Not much – but enough so that even the DUP dinosaurs could not prop you up and give you a majority.

          Mr Corbyn, on the other hand, despite getting fewer seats could form a coalition government with the SNP, Lib Dems, Plaid and Greens. None of them would go in to coalition with the hard right Tory pensioner Brexiteers. Any or all of them might with Labour.

          Of course this supposes that the almost 69-year old Mr Corbyn will still lead Labour in 4 years time. A more moderate leader would convincingly beat the Tory pensioners. David Miliband would absolutely annihilate you. Jacob Rees-Mogg? Bring it on. It’d be a Tory car crash of epic proportions. With Corbyn running Labour you got lucky so far, but demographics mean your luck is not so much running out as dying out. Bye bye Tories. Bye bye.

          1. NigelE
            May 5, 2018

            Strange, that. Your demographics argument (which you keep pushing here and I’ve seen it elsewhere) implies that the Tories should have died out years ago, perhaps around 1850. Wonder where their renewed support comes from? Oh, of course as the youngsters pass forty, they tend to favour more right wing parties. Hello, New Tories. Hello.

    2. Ian wragg
      May 4, 2018

      The Civil Servants latest wheeze to thwart Brexit.
      Why not 10 years or indefinitely.
      We manage quite well with the other 60% trade with the rest of the world. Perhaps they could learn from them.
      We have the whips telling May she can’t win the vote against joining a Custom Union. Let it be a confidence vote and smoke out the Quislings.

    3. Alison
      May 4, 2018

      Enraging. Customs partership idea given the thumbs down, and the very next day, in come senior civil servants say, technology not up to scratch for five years. I am sure that many comments to this blog over the months indicate otherwise.
      I suspect that the senior civil servants had this latest keep-the-CU-in-place drive ready and waiting.
      IF this latest one is dealt with, what will they bring up next?
      And yet again, why are these civil servants not working to ensure that the UK is able to operate when we leave the UK, with or without transition period. Every single time, the civil servants put forward delaying measures, distractions or obstacles.

      Surely, surely, they are not working in the interests of the UK, but in the interests of a Remainer view, which is not that for which we the people voted, and accepted by the government.

      1. stred
        May 4, 2018

        They may mean that the (stupid ed)customs partnership, where we collect tariffs for the EU and hand over 90% of British money for them to put up spending 17%, would take 5 years to work this horrendously complicated and stupid system to work. And that’s just for government, never mind the traders.
        Whoever thought this one up must be without experience of real life and common sense. What an olly. Thank goodness our strong, stable leader had the sense not to listen to this nonsense.

      2. alan jutson
        May 4, 2018


        I actually wonder if anyone in Government has even discussed a WTO terms arrangement, let alone plan for it.

        Any knowledge of any discussions John ?

        If so what was the outcome still on the back burner or scrapped.

    4. Lifelogic.
      May 5, 2018

      “The increases in tax rate for buy to let” taxes, of well over 100%. Make zero profit on you BTL yet still have to pay £20,000 in Tax. Someone can have a job with salary of say £40k and some break even buy to let’s and yet be left with a negative overall income after tax. They can actually be better off resigning from their job! What a great plan Hammond. Let kill the property rental industry!
      Let landlords starve and tenants pay higher and higher rents all going into Tax for Hammond to piss down some drain or other.

      Clearly spreadsheet Phil cannot even do simple sums! He is a total menace to the economy.

  3. John Soper
    May 4, 2018

    The Uk’s economy is the slowest growing in all of Europe. You can claim it is nothing to do with Brexit. But no economist will agree

    1. Roy Grainger
      May 4, 2018

      The same economists who told us there would be 500,000 job losses and a recession in the year immediately following a Leave vote ?

      1. Lifelogic
        May 4, 2018

        Or wanted us to join the Erm and Euro. Or failed to see the banking crash!

      2. Leslie Singleton
        May 4, 2018

        Dear Roy–Yes–I cannot remember the eaxct self-laudatory adjectives he used but Sir Jeremy Heywood the other day was going on about a list of attributes he reckoned the Civil Service had with the glaringly obvious omission of being correct every now and again

    2. Denis Cooper
      May 4, 2018

      The facts say that it is nothing to do with Brexit, see my comment below.

    3. Lifelogic
      May 4, 2018

      Well all the sensible economist agree it nothing to do with BREXIT we have not left yet anyway.

      Growth in the UK is mainly dire as we have the highest taxes for 40 years, have dithering interventionist socialists in charge and the threat of the dire Corbyn if broken compass May fails to get her act together.

      Getting cleanly out of the EU would clearly a huge benefit to the economy as Prof Minford & other make clear. But we still need sensible, low tax, cheap energy, low regulation & much smaller state, leadership.

    4. getahead
      May 4, 2018

      But no economist connected to the EU will agree.

  4. Mark B
    May 4, 2018

    Good morning

    Many US corporations are busy repatriating cash to the USA . .

    This is very significant. Money that will be invested in the USA and not elsewhere including the UK. No wonder the EU and the UK Government were up in arms when President Trump announced his tax cuts and changes. Such a shame we can’t have the same here.

    After the boom comes the bust. Thing is, have we been mending the roof whilst the sun has been shinning ?

    1. Lifelogic
      May 4, 2018

      Indeed Hammond is actively chasing investment, non doms, high earners and the rich away from the UK. While maintaining open door immigration to low paid EU migrants.


    2. Ghost of JB
      May 4, 2018

      No, we were busy paying off the last tennant’s rent arrears…

      1. Adam
        May 4, 2018

        It was the responsible thing to do.

        The previous occupant had not only neglected the roof during sunshine, but funneled its drainpipes into the ceiling during the storms.

    3. Derek Henry
      May 4, 2018

      Not True.

      I study the US accounts very closely and it hasn’t started yet.

      Blance Sheet reduction is up to speed. As of the 25th April

      Fed balance sheet down $5.2 bln to $4.43T. It has shrunk by $79 bln since October or, about $9 bln more than Fed had initially targeted.

      Reserve balances at federal reserve banks down $89 bln to the lowest level since the week ending Jan 3.

      Treasury holdings up $70 mln. Second week of small gain. Total holdings down $52 bln since Oct. That’s $10 bln more than what the Fed targeted.

      MBS down $4.8 bln to $1.754T. This is the lowest level since Feb 2017. It’s down $20.8 bln since October, but still about $7 bln higher than where the Fed had targeted these holdings.

      Foreign currency assets down $156 mln to $22 bln. This is the lowest level in 3 weeks, but still not far from recent highs and still near the highest level since Oct 2014.

      Central bank liquidity (Forex) swaps, unchanged at $82 mln. Nothing here to speak of. No dollar squeeze, at least not apparent in these swaps.

  5. Fedupsoutherner
    May 4, 2018

    Strange how the media cannot find it in themselves to praise Trump for something. With May and Hammond in charge there is no way we will see any improvements in our economy and with the dire anti Brexit stance from the BBC is it any wonder most people blame Brexit for our dismal performance? We need a big turn around to boost our economy again but May and Hammond are quite happy with the status quo because they want people to believe its Brexit that’s at fault. I wonder what the results of the local elections will be?

    1. Turboterrier.
      May 4, 2018

      Strange how the media cannot find it in themselves to praise Trump for something.

      You should have added anything. The whole media and their dog is hell bent on toppling him at any price.

    2. Ed Mahony
      May 4, 2018

      ‘Strange how the media cannot find it in themselves to praise Trump for something’

      – it’s totally wrong to slap Trump on the back – yet. You have to wait a few years to see whether his policies over-heat the economy, like past policies did, leading to the major recession of 2008.

      What we can be more certain of, is that soft, creative government investment in the high tech industry leads to higher productivity, better paid jobs, more high quality brand exports, great inland tax revenues. Just look at how Israel transformed Tel Aviv. But other countries have had similar results from soft, creative government investment.

      Lastly, let’s not forget that the American economic model has been decline for decades Not just in terms of a less lively economy but also in leaving major social problems.

  6. Peter
    May 4, 2018

    Of course the USA now favours economic nationalism rather than the sort of globalism that allows China to dump exports in America while fiercely protecting its own market from overseas access.

  7. Epíkouros
    May 4, 2018

    Boom and busts are as inevitable it seems as death and taxes. Is the recent slow down of economies a sign that the next bust is rapidly approaching? That we will only know when it happens. Two factors cause booms and busts. Natural economic forces and human decision making. The latter involves consumers, vested interests, those with power and influence and government and its agencies. The last two being of the greatest importance because it is how they react to all the other influences including natural economic forces (which they really have no right to interfere with as the result is like adding oil to a fire making it potentially explosive) will determine the nature and timing of the bust. Generally they react very badly exacerbating the busts and ensuring that they are progressively more severe and frequent. You have pointed out two such reactions. That of those of Trump and Hammond. The one more likely to delay the bust and make it less severe when it comes the other exactly the opposite. Pity that Trump may negate all that he has gained by implementing his misguided international trade policies.

    The West should be very afraid of the next bust because it will undoubtedly cause political change that will also change our social environment so that we will be living not nearly as comfortably as we are today. Past busts have been against a backdrop of political stability except for a few exceptions that brought Hitler and Mussolini to power. Today political stability is the exception not the general rule. Left extremists, nationalists and progressives have ensured that instability so that they can take advantage of a crisis be it political or economic. An example, if a bust occurs in the UK in the run up to the next general election then in a panic voters will turn to Corbyn and momentum to take the helm and see them through it. See it through it they will not but they will change the country out of all recognition and it will not be a very pretty sight.

    1. Ed Mahony
      May 5, 2018

      Great comment

  8. agricola
    May 4, 2018

    Hurray for the USA they have someone in charge who knows how to turn sixpence into half a crown. Meanwhile back in the UK we suffer atrophied thinking. With windmill fetishists in charge we are not allowed to frack for gas, and prefer to destroy the diesel engine industry based on ignorance of technology. What sort of a government can destroy 26% production over three months at LRJ ,and then throw in 1000 redundancies just for good measure. We would be no worse with striking bin men in charge of government.

    The drive for all electric, strategically inept, might be half logical if we could produce enough at a competitive price, but we cannot. God preserve us from lawyers and idiots, because that is all we seem to, have where it counts.

  9. alan jutson
    May 4, 2018

    Brexit is not the cause, but fiddling about with it as the Government have done has created and extended the very uncertainty they did not want, no one has a clue what sort of Brexit we are going to have, so who is likely to invest in unknowns.

    Then we have transition, to what, yet another two year extension and/or more drifting.

    Tax rises galore, fiscal drag on many tax allowances, more regulations, more Health and Safety, no wonder the economy is slowing.

    Who ever is steering the ship has lost the compass as well as power.
    We are simply drifting around, do not know where we are going, or how to get there.

    The remaining mutineers need to be crushed, an experienced captain needs to take control.

  10. hans christian ivers
    May 4, 2018


    This is the first time in 12 years, that Britain has had lower growth than the EU and US for 4 straight quarters, so I would, say I would need more than your explanation on the slow down, for not relating this to Brexit as well.

    EU grew by 0.4 % we grew by 0.1% and the US grew even more last quarter, but let us look forward and give it a few more quarters before we make final conclusions.

    1. Denis Cooper
      May 4, 2018

      We British have a saying about swings and roundabouts.

      1. hans christian ivers
        May 4, 2018

        yes but in 12 years this is quite a time

        1. Denis Cooper
          May 4, 2018

          I can remember when most of the EU, and especially the eurozone, stagnated year after year.

          1. hans christian ivers
            May 5, 2018


            What exactly has that got to do with the challenges we are facing currently?

          2. Denis Cooper
            May 5, 2018

            Exactly what I said before, about swings and roundabouts; and according to the Economist, see below, it is already swinging back against the eurozone.

    2. Woody
      May 5, 2018

      Labour soft left have been the driving force behind the vote to leave … and my breakfast costs significantly rose after 1975 when the eu butter milk and meat mountains increased food costs .. all to benefit french farmers.

  11. Caterpillar
    May 4, 2018

    Planning and implementation for a clean Brexit no divorce bill would have been useful, but is now lost to remainers, the unelected Lords and the civil service.
    Follow this with some more supply side policies (including tax system and deregulation) and decentralise from London (can’t move finance but can move govt and some culture).

  12. Andy
    May 4, 2018

    It’s nothing to do with Brexit!!!!!!!

    I am just choking on my breakfast – which costs more this year thanks to your Brexit.

    Tory hard-right pensioner Brexit is slowly but surely crashing the economy.

    At least have the guts to admit that you are putting ideology before prosperity.

    1. Anonymous
      May 4, 2018

      The WTO has nearly abolished tariffs worldwide while Brussels whacks on the tolls and difficulties at every meeting. Only a diminishing number of has-beens cling to the Euro-dream of their vanished youths.

      In fact all I ever see is old people (over 50s and much beyond) either in charge of the EU or advocating for it but I don’t bang on about it.

      Sewing hatred division again, you etc ed

      Your claims that Brexiters are xenophobes does not bear scrutiny. The BNP only ever garnered 500k votes.

      1. hans christian ivers
        May 5, 2018

        this is such an unscientific and unsubstantiated claim it is not worth commenting on

        1. Edward2
          May 6, 2018

          Well not quite hans.
          There are lots of tariffs the single market has introduced as it steadily becomes a protectionist bloc whilst the TWO steadily works towards low tariffs or tariff free trade.
          And extremism in the UK has never been popular of the left or right wing.
          No BNP or even UKIP Mps.
          Polls show the EU becoming less popular amongst citizens of member states.
          It is not unscientific nor unsubstantiated.
          The figure are out there.
          Go look.

    2. Woody
      May 5, 2018

      Labour soft left have been the driving force behind the vote to leave … and my breakfast costs significantly rose after 1975 when the eu butter milk and meat mountains increased food costs .. all to benefit french farmers.

  13. Bryan Harris
    May 4, 2018

    Yes, it is time for some economic stimulus, but I’m afraid that Ms May doesn’t want to worry the EU, by making sure we will be good neighbours, and not rock their boat financially…. It is of course, the wrong approach.
    If we carry on like this our high streets will disappear completely, and more shops will close. The best way to provoke this stimulus would be with strategic tax cuts…but even better – When are we going to reevamp our current tax system, which is even more unfit than it ever was before?
    JR >I’ve often talked about ways to change our tax system, to make it better – Would you be prepared to review a short document on this subject?

  14. Roy Grainger
    May 4, 2018

    Hammond’s response to the Trump tax cuts was to band together with the EU in trying to get them reversed under WTO rules. So not much hope he’s going to follow the same policy.

    1. getahead
      May 4, 2018

      Lord how I hate that man. And I don’t mean Donald.

  15. Denis Cooper
    May 4, 2018

    Well, the latest House of Commons Library update on Economic Indicators is here:

    and on the front page of that report there is a chart of UK economic growth quarter by quarter back to Q1 2007; and if in the future somebody said to me:

    “You know that EU referendum really hit our economy”

    then I would have to ask if they thought the referendum had been held around the end of 2007, and that was why our GDP had then shrunk by 6% in just one year.

    The fact is that after a slow initial recovery from that massive recession, caused largely by the hubristic incompetence of the Labour government, our economic growth rate bobbed up and down and spiked wildly at about 1.2% quarter on quarter in Q3 2012, since when it has been trending downwards albeit in a very irregular manner; and any dispassionate observer must conclude that it is not possible to see how that rough downwards trend has yet been affected by the June 2016 vote to leave the EU, one way or the other.

  16. BOF
    May 4, 2018

    Bring on cheap energy, it is essential to help growth. But dream on.

    The longer we remain shackled to the EU the longer our growth will be restricted.

    1. hans christian ivers
      May 4, 2018


      Interesting observation , so which factors on the EU membership is particularly restricting our growth and which factors will enable us to grow even more outside, please share with us?

      1. getahead
        May 4, 2018

        In 2016 the UK’s net contribution was about £8.6 billion. Customs duties after collection costs were €3.2 billion, VAT €3.3 billion.
        Customs duties and VAT contributions are in addition to our membership fees – so £5bn pa can be added to the net membership fee.
        All this money to fund a trade deficit.
        People consider the EU is a free trade union for members like the UK when we have to pay c 19 billion a year to be in it. That’s twice or more what we would pay on tariff for the amount we import annually.
        The EU does nothing for the UK. We have had a reduced GDP since we joined the Single Market protection scheme.

        1. hans christian ivers
          May 4, 2018

          your figures are interesting and highly informative, however they do not support nor do they prove your so -called hypothesis about UK growth

          1. Edward2
            May 6, 2018

            Easy to say Hans but “get ahead” quoted figures.
            Have you got any different ones or is it just your usual dismissal without any other proof?

    2. Mitchel
      May 4, 2018

      Where is this “cheap”energy going to come from?

      I saw a pictagram the other day extracted from a presentation Igor Sechin,head of Rosneft,gave to an audience of leading European and Asian figures at the 1oth Eurasian Economic forum in Verona,Italy last October.It reveals the central plank of Russia’s Eurasian geopolitical strategy;it has divided Eurasia into three zones according to whether they are energy producers or consumers-a Western consumer bloc led/managed/ruled by Germany,an Eastern consumer bloc led/managed/ruled by China and a central producer bloc with three zones:-Russia & the Arctic,the Caspian region and the Middle east/N Africa.Over the past couple of years Russia has been moving relentlessly south through these zones tying in producers,resources and infrastructure-deals with Iran,Saudi Arabia,Turkey,Iraq,Iraqi Kurdistan,Libya,Qatar,Syria,India,etc.(They and China are also taking increasing control of Venezuela’s output,helping it circumvent US sanctions and taking it out of the $ payment system).

      Masterful,absolutely masterful.

    3. hans christian ivers
      May 5, 2018

      that is why our growth is four times lower than the Eu what a load of rubbish

  17. Derek Henry
    May 4, 2018

    Analysing the US Daily Treasury statement Trump is going to spend $5 trillion this fiscal year. Which is unprecedented in US history. Add tax cuts to that and what we have is straight out of the Keynsian handbook.

    All the deficit hawks have been defeated. No wonder because the budget deficit = private sector savings.

    Increase the defict = increased private sector savings. More money to spend in the economy.

    Budget deficit = private sector surplus

    Budget Surplus = private sector deficit

    An accounting identity that is neither ideological or political. As Osborne found out very quickly

    1. Rien Huizer
      May 6, 2018

      Keynesian handbook? Current Fed policy is to manage nomila GDP along a path that based on current GDP deflator values equates to a 2-2.5% real GDP growth path. Or, most of the stimulus (rational expectations will apply too of course) will be neutralized by monetary policy. Same rason why monetary policy in the UK would not be tightened (Howard’s budget is pretty good) if there was not the possibility of a bad Brexit in the background. Despite all the optimism on display, the chances are still that the country will end up with someting undesirable (for investors, not for ERG people of course).

  18. Derek Henry
    May 4, 2018

    US Government spending For the month of April thus far (thru April 27)

    Total spending was $348 bln, down $55.5 bln from March, but up $16.1 bln over April 2017 and that’s the important comparison because there is a normal drop-off from March to April.

    Total net spending for the fiscal year thru April 25 is $2.75 trillion, up $84.4 bln. The growth rate is 3.17%.

    By comparison, at this time last year spending was only up $27 bln over the previous year and the growing at 0.85% y-o-y. As you can see, spending is expanding at a rate 3 times faster than last year.

    Here’s what’s up.

    Social Security, $505 bln, up 16.4 bln y-o-y. The growth rate is 3.4% y-o-y.

    Medicaid, $220 bln, up $2.6 bln. The growth rate 1.2% y-o-y.

    Medicare, $232 bln, up $9.5 bln. With Marketplace payments (subsidies) included, this item is up $13.9 bln y-o-y. Subsidies are currently $29.8 bln. That’s $4.4 bln more than last year.

    Defense Vendor Payments, $174.6 bln, up $11.4 bln and growing at 7% y-o-y. As I mentioned, this has leapt up by a huge amount. Remember, this was down on a y-o-y basis for the past 3 years.

    Federal Salaries $104.3 bln, up $4 bln y-o-y.

    Individual IRS tax refunds, $244.4 bln, up $721 mln. Even this has turned around. It had been running down, y-o-y.

    HHS, $63.3 bln, up $1.7 bln.

    Here’s what’s down

    HUD, $39 bln, down $4.7 bln. This may be exaggerated due to a calendar quirk. We’ll see later this week.

    Education Department Programs, $104.6 bln, down $3.5 bln. This has been a major fiscal drag as I have been pointing out.

    Unemployment insurance benefits, $18.1 bln, down $1.4 bln.

    Other Withdrawals (military and war), $453.7 bln, down $12 bln. This is a calendar quirk. It will be adjusted this week. Once the calendar quirk is removed this item will be up about $20 bln y-o-y.

    Supplemental Nutrition Assistance Program (SNAP), $39.4 bln, down $535 mln.

    There are not too many items down y-o-y and the only big one, really, is education. That has been a major drag. On the other hand, most major items are up and up big.

    Employment and withholding tax deposits thru April 25, $1.45T, up $28 bln over last year The growth rate of these deposits is 2.0% y-o-y. This continues to look like it is decelerating, but that’s probably due to the tax cuts and not due to a slowdown in the economy.

    Total Federal Tax Deposits, $1.75 trillion, up $21 bln.

    Corporation Taxes, $151.4 bln, down $24.5 bln. There is no sign here of any increase in corporate tax payments. All that “repatriation” talk. We have yet to see any.

    Public debt cash issues, $5.77 trillion, up $520 bln y-o-y.

    The Federal deficit thru April 25 was $361 bln, up $32.4 bln over last year. The deficit is 1.8% of GDP, so it has shrunk some, but only because the month of April is when the government runs a surplus. That reduces the deficit. The government will spend that money right back out so you will see the deficit begin to increase again very soon. Remember, an expanding deficit equates to a net addition to the financial balances of the non-government. So it’s not a bad thing.

  19. Kenneth
    May 4, 2018

    We need to replace the current socialist government with a Conservative government

  20. Adam
    May 4, 2018

    Growth varies according to which periods are compared.
    Fastest % growth is from small.
    Rapidly producing & eating doughnuts generates growth.
    Growth in sensible purpose-led efficiency is most welcome.
    JR leads the way to better.

    1. Anonymous
      May 4, 2018

      Economic growth can be a bad thing as Gordon Brown proved.

    2. hans christian ivers
      May 5, 2018

      Better What, propaganda and fake news, yes I would agree

      1. Adam
        May 6, 2018

        Evidence could support your claim, if it exists.

  21. stred
    May 4, 2018

    Hitting BTL must have reduced growth. Many landlords are barely making any return after tax changes and additional regulation. The right to remain in a tenancy permanently, meaning that an investor cannot get the property back for life, has killed investment in Scotland. HMO rules mean that not more than 2 unrelated persons can share a 3, 4 5 bedroom house, cutting returns and reducing availability. Licensing will cost thousands.

    Many landlords bought dilapidated property and invested £10 or more in renovation. This is now pointless. If tenants are to buy expensive ex BTL houses, a large price drop will be necessary. Even if we manage to build 200k new houses, this is 300k short of the increase in population every year. Where are snowflakes going to live? Probably back with mummy and daddy, or maybe join the EU army and go to fight the Russians. Houses are cheap in the Ukraine.

  22. David D
    May 4, 2018

    Look forward to a lot more bad weather going into the solar minimum. As evidence to support this 90% of Canada still has snow cover in April. Numerous states in the US have been unable to start planting crops even by May. Already crop failures are being reported. Climate warmists are likely to start looking very stupid quite soon.

    1. Emperor Wishy-Washy
      May 4, 2018

      David D
      The only difference in weather in the last few centuries has been the frequency or otherwise of people reporting it as significant and thinking it is worth recording it accurately. Who cared at the time whether it was minus three Fahrenheit or minus five, blowing air or still and, in this connection,what available relatively highly educated person would question the fact that the recorder always slept in way past his alleged 5o’clock temperature and rain test? You don’t get honest reporting in your job even now, why do we assume hundreds of years ago they were more honest to the point in this case of stupidity? It didn’t matter!!!!!!

  23. Percy Sepshun
    May 4, 2018

    All Party leaders are on TV today claiming “A great victory for our party”
    It seems Wandsworth had a “great surge in turnout” ( 38% )
    So, it seems the overwhelming view of the electorate is that all parties are a dead loss and it is the percentage of decaying body-politic within each which determines how few steps they are from the gates of Hell and their good friend Devil-e-Bob

  24. Denis Cooper
    May 4, 2018


    “Britain ‘will not be able to leave customs union until 2023’, ministers told”

    “In a briefing to the Cabinet’s Brexit sub-committee earlier this week, senior civil servants said highly complex new technology that will be needed to operate Britain’s borders after Brexit might not be ready for another five years.”

    What a load of insulting twaddle, both the headline idea that we would have to stay in the/a customs union under the control of the EU because we hadn’t sorted out improved customs procedures and the idea in the article itself that “highly complex new technology” “will be needed to operate Britain’s borders after Brexit”.

    Once again this is nothing more than eurofederalist “senior civil servants” trying to delay, dilute and ultimately thwart Brexit in defiance of the will of the British people as directly expressed in the referendum.

  25. English Pensioner
    May 4, 2018

    Do what Trump has done in the United States.
    Get out of the EU and get trade agreements with Trump and the other English speaking countries. It’s far easier to trade with people who speak your language and with whom you have more in common.
    The EU only want us as a member to pay them money and sell us their goods, but in exchange they buy few of ours in comparison.

  26. Denis Cooper
    May 4, 2018

    Blimey, for once there will be a proper debate on a Statutory Instrument:

    “On 9 May 2018 there will be a debate in the main chamber on a motion relating to The Education (Student Support) (Amendment) (No. 2) Regulations 2018 No. 443.

    Until 1 August 2017, students taking undergraduate pre-registration courses in nursing and other allied health profession subjects were supported by NHS bursaries … “

  27. Iain Gill
    May 4, 2018

    So just become another state of America….

  28. margaret
    May 4, 2018

    A guest on BBC TV this am ( I don’t know her name ;I was muti- tasking simultaneously) suggested that part of the change in lifestyle is that we don’t actually buy as many products due to smaller housing and more crowding . We don’t have the space to buy other that the needed .She then continued to say that we spend more money on leisure such as pubs, clubs, restaurants etc. therefore GDP will not grow as quickly as it is unseen money.

    1. Edward2
      May 6, 2018

      We buy smaller but more expensive products.
      And there is more of us.
      Living in more households.
      GDP will rise.

  29. Jack snell
    May 4, 2018

    Don’t be fooled..the ground is being prepared now so that we remain in some kind of a customs union with them and also the single market..a will be set out as a transitional period so to allow us get new deals overseas..and in the meantime and before very long we will be soon into the next generation who will reverse the referendum vote completely..then for ever more students of these things will marvel at the stupidity of this Tory/ UKIP generation who through crass ignorance and fake news nearly brought the country to it’s knees.. they will say brexit but will think doubt

    1. Denis Cooper
      May 4, 2018

      I won’t be fooled.

  30. Blake
    May 4, 2018

    Yes i read where the EU has also revised its growth prediction down to 2.3 per cent from 2.4..they also talk about the hard winter..on the other hand deficits for all euro countries is now below 3 per bad and unemployment on the way down..perhaps we should have a rethink about where we’re going?😂

  31. Ed Mahony
    May 4, 2018

    ‘its highly successful technology based companies’

    – Government here should be doing what government in Israel (and other places) did by creative, soft investment (creating a public hedge fund) in the high tech industry, helping to turn Tel Aviv into a major high tech hub.

    I’m glad to see the government now taking an interest in developing the Oxford to Cambridge corridor, but they should have started this years ago. Developing the UK’s high tech / digital industry should be a major, major government focus right now and for the future – resulting in higher productivity, higher exports of strong brands around the world, strong inland revenue tax receipts, and stronger sense of patriotism.

    1. Ed Mahony
      May 4, 2018

      ‘by creative, soft investment (creating a public hedge fund)’

      – but centre-right wing governments around the world have successfully done far more than just this.

      And we’ve got to get away by being so dependent on the City of London, important as that is. We need a high tech industry to balance this, in particular so we’re not influenced by the highs and lows of the financial industry (leading to the bailing out of banks in our last recession – and they had to be bailed out or else our country would have plummeted into extreme recession / depression).

  32. Ron Olden
    May 4, 2018

    The UK’s Q1 growth rate was 0.3%, lower than it was in Q4 2017.

    France’s was 0.3% lower the EU’s 0.3% lower, and the US’s by 0.15% lower.

    I still wouldn’t be surprised however, to see UK Q1 revised down to zero.

    Given that the weather effect, in statistical terms, will have been most marked this side of the Atlantic (the US is used to it), the fact that the two or three days of the Easter Holiday that fell into Q1 were a washout, and there has recently been a sharp tightening of monetary policy which has now near fully dealt with the inflation risk, these are still quite acceptable figures for the UK, in comparison with others and sets us up well for Brexit.

    Most importantly however, the very recent figures show service sector growth accelerating again construction bouncing back, and new car registrations in April were 10% higher than in April 2017. So the chances are, that, the car production drag on the economy is now passing.

    There’s no point in the State borrowing yet more money so people can consume more, and companies to ‘invest’ it.

    You can’t build a successful economy on a never ending debt driven consumer bubble. All it achieves, is to suck in more imports, and leave today’s young people stuck with the debt.

    Companies are not short of money to invest either. They have large cash balances and other relatively liquid assets in their balance sheets, and can still borrow at rock bottom interest rates.

    There’s also been something approaching a deluge of foreign investment coming into the UK since the Brexit Vote.

    By the time we Leave the EU, the UK’s growth rate will be back up in line with other countries.

  33. getahead
    May 4, 2018

    I quote Lifelogic, “in short replace Hammond and May with some real Conservatives.”

    Please John.

  34. duncan
    May 4, 2018

    With a proper Tory leader and a Brexit chancellor our party would be hammering that Marxist rabble that’s infected that one decent party, namely the Labour party.

    It is worrying that we still aren’t burying Marxist Labour in the polls and the reason is simple, Theresa May. She’s an empty vessel

    We want a patriot at the helm and someone who exposes the anti-UK stance of the Labour party, its leader and their union backers

  35. Denis Cooper
    May 4, 2018

    Here’s an interesting little item for those who think we should stay in the/a customs union with the EU so that it can continue to run our trade policy for us:

    “With the Achmea decision, any EU country that ratifies the EU-Canada Comprehensive Economic and Trade Agreement (CETA) before the decision of the European Court of Justice on CETA’s investment provisions compliance with the European treaties, will be breaking the principle of loyalty to European Union institutions.”

    “Although few people in Europe have heard about the ECJ’s ‘Achmea ruling’, the case will have far-reaching consequences and it is important for member states to understand the implications of the case quickly, especially those states that are considering ratifying CETA.”

    But I’m quite sure that Lord Andy Haw-Haw and his fellow eurotrolls who are constantly submitting their pro-EU comments to this blog will be among that “few people in Europe” and they will be to explain it all to us, and in particular explain how good it will be for us if the EU decides our policy on trade with Canada rather our own Parliament.

  36. Blue and Gold
    May 4, 2018

    ‘ Shop prices continue to fall ‘ , well they may have done at Fortnum and Mason but for us lesser mortals they continue to rise, ever since the damaging Referendum.

    If the US is so great with tax reforms and their economy etc, why don’t all of you Brexiteers move there and join your great friend Trump?

  37. Denis Cooper
    May 4, 2018

    Ha, from the Economist …

    “The euro area’s economy loses momentum”

    “The best of the zone’s growth spurt may already have passed”

    1. margaret howard
      May 5, 2018

      Talk about wishful thinking. Imaging if they wrote an article in the same vain about the sterling areas economies!

      “The best of the zone’s growth spurt may already have passed” would read: No growth rate ever happened.
      Exit Brexit!

      1. Denis Cooper
        May 6, 2018

        The Economist is not renowned for its support of Brexit …

  38. Dennis
    May 4, 2018

    I see here all the posters have a magic cornucopian resource tree but they don’t say where it is. I bet they have no idea.

    1. Denis Cooper
      May 5, 2018

      There are four of them in the courtyard at the Bank of England!

      “What’s special about mulberry trees?”

      1. Mitchel
        May 5, 2018

        And given what happened to that Chinese experiment with paper money,it’s no surprise they have a passion for gold.

  39. margaret howard
    May 4, 2018

    ( wants to post a lie about my views. Let me repeat I have always said Brexit should be good for the UK economy and any suggestion otherwise is false. ed]

  40. MikeM
    May 5, 2018

    Not much has been said in the national media about UK energy policy post-Brexit. Free of EU directives, the UK will once again be free to prioritise exploration and development of oil and gas, including coal gas and shale gas. Prospects are positive, but only if local intransigence and propagandist scaremongering against fracking is overcome. And why not reopen some collieries? UK coal provides some of the lowest cost energy available anywhere. Properly developed, indigenous onshore energy resources by all rights should enable Scotland and the north of England to have among the lowest cost energy in the developed world, offering a boon to consumers and tremendous competitive advantage to industry, much as in the US.

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