Slide 1 Stephen Blackman, RBS Group Economics March 2013.
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Transcript of Slide 1 Stephen Blackman, RBS Group Economics March 2013.
Slide 1
Stephen Blackman,
RBS Group Economics
March 2013
Slide 2
Slide 3
It was the best of times, it was the worst of times
Slide 4
rarely has borrowing to invest been cheaper
and this is unlikely to change soon
yet rarely have households been so constrained
Slide 5
10%
2%
-3%
13%
-4
-2
0
2
4
6
8
10
12
14
Typical recession Great Depression Current Recovery Difference from typicalrecovery
Size of the economy relative to eve of recession (%)
Source: BoE; ONS
Slide 6
13%Equivalent of c.£137 billion a year for UK households
18 million UK families
Or £7,500 per family
Equivalent of typical UK household’s annual tax bill
Source: BoE; ONS
Slide 7
£0
£1,000
£2,000
£3,000
£4,000
£5,000
£6,000
£7,000
1 2 3 4 5 6 7 8 9 10
Monthly household disposable income by decile
Income of just £1,700 a month (UK)
Income of over £2,000 on IoM
Source: ONS; Isle of Man Government
Slide 8
Supermarket Sweep
2.5%
0.9
1.8%
30%
11%
5.4%
Source: Company Results
Slide 9
Both are already rich & successful countries
Look for options within the existing constitutional settlementTake the welfare system as given
What makes economies grow?– More people in work (and other inputs)– Higher productivity
So, critical question: what will most effectively boost the UK’s and IoM’s productivity?
Humility
(How) can the IoM (and the UK) achieve strong long term growth?
Slide 10
IoM has more in common with London than the rest of the UK
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
■Lond
on
■South
Eas
t
UK
■Scotla
nd
■East o
f Eng
land
■South
Wes
t
■UK ex L
ondo
n
■East M
idlan
ds
■North
Wes
t
■Wes
t Midl
ands
■Y&H
■North
ern
Irelan
d
■North
Eas
t
■Wale
s
■ IoM
GVA per head in 2011
Source: ONS
Slide 11
But the demographic challenges are the same
Change in key demographic ratios 2010-2015
Source: UN; Isle of Man Government; State of Jersey
Slide 12
Migration will play role, but cannot fill the demographic gap
Source: UN
Slide 13
Stylised evidence on the rate of return to ‘education’ at different ages
Source: Heckman
Slide 14
Smaller projects generally offer better ‘returns’ than larger ones
Slide 15
‘Planning’ means fewer, more expensive houses
In England, ‘planning’ restrictions increase house prices and, hence, living costs
Relaxing planning constraints would reduce real house prices in England by 35% & boost the size of the housing stock by up to 17%
Slide 16
Thank you and questions
Inventions of the 1870s
The prototype telephone was invented by Alexander Graham Bell in 1876
A version of the light bulb was invented by Thomas Edison
The phonograph is invented in 1877 by Thomas Edison
Slide 17
Thank you and keep in touch!
Internetwww.rbs.com/economics
E-mailwww.rbs.com/economics/registration
Social media@rbs_economics
Slide 18
A word from our lawyers
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