By Claer Barrett and Kiran Stacey
Last autumn, George Osborne came to the Commons to present his Autumn Statement against the backdrop of a stagnating economy and a recent credit downgrade. His speech was full of language about continuing with “Plan A” despite ongoing concern over whether it was working.
This year was very different. With massive increases in the OBR’s growth forecasts, this was in effect the chancellor’s victory speech: in his words “the plan is working”. But there were also plenty of warnings against voting for Labour instead.
Here’s a quick, fun, look at how the language has changed….
The Chancellor was keen to put a positive gloss on continuing austerity while the economy is picking up, promising to “fix the roof when the sun is shining”.
2013 = 2 mentions
2012 = 0 mentions
Armed with a rosy set of forecasts, the Chancellor was able to boast
confidently about his economic strategy: “The plan is working.”
2013 = 3 mentions
2012 = 0 mentions Read more
1. Forget the announcements
The net tax and spending measures are tiny compared with the forecasting changes to tax receipts. The purple bar on the right of this chart shows just how small the announcement are relative to the Office for Budget Responsibility’s forecasting changes. Read more
News this week that Repsol looks increasingly likely to accept a settlement from Argentina’s government over the forced nationalisation of its YPF subsidiary, makes a new paper from Chatham House on clashes over mineral contracts very timely.
The report suggests there is a clear correlation between rising oil prices and the number of disputes in the extractive industry (think oil, minerals and metals).
A deal with cash-strapped Ukraine was originally supposed to be the centerpiece of today’s “Eastern Partnership” EU summit in Lithuania. But last week Ukraine froze plans to sign the EU integration agreement in favour of overtures from Russia.
The trade deal with the EU was expected to stimulate much-needed investment flows to Ukraine and exports via the removal of trade tariffs. But as this was contingent on reforms, benefits were likely to be longer term. A deal with Russia on the other hand – potentially a lowering of the price at which the country imports gas – could give a short term fillip to the economy.
Here is why Ukraine’s economy desperately needs a boost.
First, and most crucially, is the question of Ukraine’s falling foreign exchange reserves.
As of October, foreign reserves stood at $20.6bn, down $6bn in the last year and only just covering three-months worth of imports – a level seen as the danger zone by many economists. And even under the most benign scenario projected UniCredit modeled this August see reserves falling further: Read more