Michael Yang

Our Weekly is out - free download. What is our assessment of the #UKBudget released by R. Reeves? 1. A strategy based on sharp public investment increase funded by tax hikes amid spare fiscal space in the UK. 2. Although the rise in #NationalInsurance (NI) contributions is not the wisest strategy (a rise in VAT would have been much better), nevertheless the UK's tax wedge is not very wide so the negative effect on growth should be contained (unlike, say, in France). 3. The UK has a very low #InvestmentRate (and outdated capital infrastructure) compared to peers, so a rise in investment spending will probably have very positive effects for the economy. New funding for the NHS is also most welcome, but beware of chronic labour shortages in the health sector which could hamper some of the positives. 4. Overall, we estimate that the government's fiscal policy will support growth from 2026 on thanks to a favourable spending/tax mix. The investment-to-GDP ratio should reach its highest since 1992. Quite an achievement.

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The aim of the Roadmap is to put forward an investor and solutions-focused perspective on some of the key public policy priorities to boost low-carbon investment in the UK for the next five years. Read more in 'Boosting low-carbon investment in the UK: A Policy Roadmap' 📖 https://bit.ly/4bWJ2uw #LowCarbon #UKEconomy #Policy

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- How would you assess if your pricing is fair for consumers? - How would you determine if your business model is helping to deliver good consumer outcomes? - How would you evidence whether your communications are effective? Back by popular demand… Oxera Consulting LLP together with UK Finance will be answering these questions as part of our Consumer Duty interactive workshop sessions for financial services firms - covering what it means to embed the FCA’s requirements on fair value and effective communications. With limited spaces available, find out more and sign up here https://lnkd.in/e369FzEE or reach out for more information. Tom Davies Reinder Van Dijk Peter Andrews Jessie Davidson Wiktor Woszczek #consumerduty #fairvalue #pricing #pricingstrategy https://lnkd.in/eAhcKbcC

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Quite an intresting discussion. My takes are: 1) it merits the focus on both central projection with an equal emphasis of alternative one or two scenarios; 2) it is an advantageous to communicate future policy rate path, and alternative endogenous policy rate path should the risks under scenarios materialise (accompanied by clear and concise baseline and scenario assumptions); 3) the modelling approach ought to be based on small central model that capture key macroeconomic linkages, with various specific satelite models for indept analysis of specific sectors and markets, "too" big model ought be avoided (this is an opposite of what Bernanke's suggestions); 4) judgements is equally important rather than mainly relying on model based projections, but judgements need to be framed within the model structure and interlinkages (the impression of Bernanke's report is as if the Bank of England rely solely on model based forecasting, which i sincerely do not think so, my guess is that the assumptions used for forecasting were inaccurate and were not adequately revised); 5) not withstanding the above, to note Goodhart's view that in no way one could measure likelihood and uncertainty of some risks such as political, fiscal and debt crisis risks (in other words, implicitly policy making would continue to be subject to unpredictably mistakes) 👌

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Clare Lombardelli,Bank of England Deputy Governor for Monetary Policy, addressing the audience at Bank of England Watchers Conference about the shape of the UK Economy, drawing upon the DMP data while speaking about the wage inflation exceptions during the conference said the following - "There are some signs that the process of wage disinflation may be slowing. Chart 5 (attached below) shows companies’ expectations of wage growth from the Bank’s Decision Maker Panel (DMP) survey. Firms expect wage growth to decline further, but their one-year ahead expectations seem to have stabilised in recent months. Last month our Agents reported that contacts expected pay awards in 2025 to moderate to around 2%-4%. We’ll need further intel to assess where in that range we’re likely to land. If we use the decomposition from Chart 4, assuming productivity growth of c.1% and a labour market broadly in balance, wage growth would need to be around 3% to be consistent with inflation at target." For full article 👉 https://lnkd.in/eyRnYAR6 #BankOfEngland #CentralBank #UKEconomy #Inflation #WageInflation #EconomicGrowth #DecisionMakerPanel

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📣Register for our European pensions deep dive on decision-useful climate scenarios: https://lnkd.in/e7dEMUAD 🤝 Partnering with Universities Superannuation Scheme (Ltd), University of Exeter and Carbon Tracker, the session will look at the challenges of current scenario modelling and what industry peers are doing to address these within the investment decision-making process. 📅 12 Dec 2024 🕓 3:30pm – 5:00pm CEST 📍 Online 🚀 Designed for those within the European pension industry who are either directly involved in scenario analysis or who use scenario results for investment decisions, eg pension management, asset managers, advisers and associations. Participants will: 🛠️ Learn the key challenges of current approaches to scenario analysis. 🔄 Dive deeper into emerging approaches that embrace a narrative analysis and how this translates into the asset allocation process. 📊 Hear practical examples of how to address these challenges within the investment decision-making process. 🔎 Ask questions of the experts in our Q&A session.

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"Despite best efforts to boost UK investment, election pledges are holding the government back." In October 2024, Chancellor Rt Hon Rachel Reeves presented her "budget for growth," but the Office for Budget Responsibility (OBR) cut its UK GDP forecast. This first of two blogs by Dimitri Zenghelis sets out the macroeconomic reasons why the measures, despite good intentions, are not likely to achieve the desired boost to UK investment, productivity and growth. Without a change of course, every time the government tries to boost investment, the Bank of England and the markets will act to bring it back down. Read: https://lnkd.in/eHw5Ue5Z

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Understanding and testing the impacts of choice architecture on customer behaviours will become ever more important for business with the introduction of the Digital Markets Competition and Consumer Act in the UK, the role of behavioural remedies within the EU Digital Markets Act, and the UK FCA’s Customer Duty.

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✍️ Our latest Bi_Focal blog is a fascinating piece by PhD student James Breckwoldt, covering views on economic growth in the UK. The article utilises both our quant and qual products to get a comprehensive view of public opinion on the subject. 📊 James' analysis finds that attitudes towards growth are not easily tied to traditional left-right or liberal-conservative divides, instead forming a distinct dimension of political beliefs. Read it here 👇 https://hubs.li/Q02TYdbK0

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My latest article on the long-term significance of Labour's plan for a national wealth fund. Measuring public sector net wealth, which includes such funds, as opposed to public sector net debt, could be a key to revising the fiscal rules if Labour comes to power.

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What did we find in our survey that explored public attitudes towards how UK-based R&D could be used as a tool for solving global issues? 💬71% thought higher income countries should work in partnership with lower income countries to solve problems 💬A majority said that if the UK invested money into R&D to come up with new solutions to problems facing other countries, it would have a meaningful positive impact (62%) and that they would feel proud (61%) 💬59% would prefer large R&D infrastructure to be paid for by and built in the UK so the UK can benefit from job creation and be a key part of the research, compared to 24% who said they would prefer it to be built elsewhere so the money can be used on more pressing national issues 💬53% agree that cutting funding for R&D that benefits other countries would be a mistake, with just 14% disagreeing 🔗Explore the full results: https://lnkd.in/gYQNC9Bi

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The UK government is seeking input on a new Industrial Strategy, and we’re asking data practitioners to contribute. This proposed 10-year plan for the economy aims to provide the stability and confidence businesses need to invest in high-growth sectors, driving sustainable economic growth. The final strategy is set to be published in spring 2025, alongside the multi-year spending review. We encourage everyone in the data community to participate in the survey to make sure our voice is heard on the issues that matter most to the future of our profession. To take part fill out the survey here - https://lnkd.in/eZaYpv54 DEADLINE NOV 24TH #datacommunity #dataprofessional #dataresearch #industrialstrategy

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This month, the Decision Maker Panel (DMP) runs its one-hundredth survey wave. Since 2016, the survey has brought timely and quantitative evidence to policymakers, particularly the Bank of England’s Monetary Policy Committee, from a large sample of UK businesses. This rich dataset has also informed research on a wide range of topics. In this post, we highlight key findings from our analysis of the survey data, drawing on past research publications as well as ongoing work. These findings include measuring the uncertainty faced by businesses following the Brexit referendum, providing high-frequency data on the impact of Covid, measuring firm price-setting and inflation expectations, as well as monitoring the impact of higher interest rates. Read more about our key findings here: https://b-o-e.uk/4iJRnGD

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The proposed Vodafone-Three UK merger strongly merits approval. In this brief paper submitted to the CMA, and now published on the CMA website, I set out the reasons why. To summarise: economic growth requires innovation and productivity gains, and in a telecoms context this boils down to lower prices per GB. In turn, lower prices per GB are driven by network investment – and the merger provides a way to improve the viability of this network investment, paid for out of operating efficiency gains. It should therefore be embraced.

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The past year has been eventful for merger control, with 2024 further highlighting the evolution of UK and EU merger control, and the development of more novel theories of harm associated with the loss of potential competition and ecosystem theories of harm. In our latest expert chapter for ICLG on merger control, Mat Hughes and I review some of the key highlights of 2024. In summary: - There have been further prohibitions involving potential competition / dynamic innovation concerns (e.g. Adobe/Figma). - Large technology companies continue their pursuit of potentially “killer” acquisitions, with Artificial Intelligence (“AI”) mergers now starting to appear more frequently. This has brought increased scrutiny from competition authorities, particularly in cases involving large digital platforms and their expansion into adjacent markets. - Horizontal concerns around enhancing an ecosystem and raising barriers to entry for rivals has emerged as a theory of harm in what would normally be a classic conglomerate merger, as evidenced by the European Commission’s prohibition of Booking/Etraveli – and notwithstanding that this merger was cleared by the CMA at Phase 1. - Our review of the 36 UK/EC parallel cases since January 2021 show that although the majority of decisions are aligned (61%), in eight mergers (22%) there was disagreement about the competitive assessment. Those differences can be a function of the different facts facing each authority (i.e. taking account of the idiosyncrasies of the individual geographical markets); however, it can also be a result of a different weighting on the evidence, or approaches (read scepticism) to different types of remedies (with the CMA’s approach to behavioural remedies – e.g. in Microsoft/Activision – being noticeably more stringent than the European Commission’s).  - This changing landscape of merger control means practitioners need to remain alert to the interplay of network effects, potential competition, and market entry barriers in their assessments of competitive effects, and for parallel cases, how different authorities may view the specific facts.   Since finalising the chapter, the position on remedies has evolved again following the CMA’s decision of 5 December to clear the Vodafone/Three merger subject to commitments relating to the delivery of the parties’ joint network plan over the next eight years and capping the prices of selected mobile tariffs and data plans for three years (covering the early years of the network plan). The CMA also announced a review of its approach to merger remedies in early 2025.   🔗 https://lnkd.in/g_qGy_nT   #MergerControl #CompetitionLaw #UKRegulation #AI #Ecosystems

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