David Smith's picture
Affiliation: 
Sunday Times
Credentials: 
Economics editor

Voting history

National Living Wage and the UK economy

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Question 2: Do you agree that the new NLW will have a muted effect on wages and prices?

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Answer:
Agree
Confidence level:
Very confident
Comment:
The Bank of England's estimates, which suggest a 0.1% sustained increase in earnings growth as a result of the National Living Wage, would have to be very wildly out for there to be a more significant effect on wages and inflation.

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Question 1: Do you agree that the new National Living Wage is likely to lead to significantly lower employment?

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Answer:
Disagree
Confidence level:
Confident
Comment:
The National Living Wage may change the nature of some employment, particularly in certain sectors, and could have an effect at the margin on hours worked, but is unlikely to have a significant negative impact on employment at the macro level.

Brexit and financial market volatility

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Question 2: Do you agree that the possibility of Brexit significantly increases uncertainty and volatility in financial markets and the economy in general?

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Answer:
Agree
Confidence level:
Very confident
Comment:
There will be volatility in currency markets and, to a lesser extent, other financial markets. There is a risk that the uncertainty results in weaker economic activity in the run-up to the referendum.

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Question 1: The value of the pound fell sharply this week. Do you agree that the public debate on Brexit can be expected to (continue to) lead to a substantially higher level of exchange rate volatility in the upcoming months?

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Answer:
Strongly Agree
Confidence level:
Extremely confident
Comment:
Markets expect that Brexit would result in a substantial markdown for sterling. Any evidence that the chances of Brexit have increased will see selling of then pound, and vice versa.

China’s growth slowdown: likely persistence and effects

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Question 2:

Do you agree that if the Chinese slowdown turns out to be persistent, it will have a significant impact on UK growth (say, in the order of a few tenths of a percentage point) and/or it will justify a material change in monetary policy (for example, in terms of the timing and speed of a return to ‘normal’ interest rates) and fiscal policy (for example, in terms of the timing and speed of fiscal contraction).

Answer:
Strongly Disagree
Confidence level:
Very confident
Comment:
The direct impact of slower Chinese growth on the UK economy will be very marginal. Indeed, by easing the upward pressure on energy and commodity prices, the net effect is likely to be negligible. China's slowdown may already have had an impact on UK monetary policy by pushing out the timing of the first post-crisis rate hike but it is unlikely to have a permanent impact on UK monetary and fiscal policy.

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