Panicos Demetriades's picture
Affiliation: 
University of Leicester
Credentials: 
Professor of financial economics
Former Governor, Central Bank of Cyprus and ECB Governing Council member

Voting history

National Living Wage and the UK economy

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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:
Strongly disagree
Confidence level:
Very confident
Comment:
If there are any effects on employment, they are likely to be small and will only affect low wage sectors. Paying a decent wage to those employed in these sectors is more likely to increase productivity, which may well lower employment costs, than to reduce employment.

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:
Strongly Agree
Confidence level:
Extremely confident
Comment:
Brexit, like Grexit was last year, is an unknown. We simply do not know what will happen afterwards, if I may borrow that expression from J.M. Keynes. Brexit will not just affect Britain. It may prove to be a catalyst for other significant changes in the EU. It is not impossible that other countries may follow, it is also not unlikely that Grexit uncertainty may resurface again, given political developments in Greece. Brexit can prove to be a paradigm shift in expectations. Brexit will add to an already high degree of geopolitical uncertainty around the world.

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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:
Very confident
Comment:
It is not just the debate that matters, it is also changing perceptions as to a probability of a vote in favour of Brexit. Such a vote would clearly weaken growth prospects and weigh heavily on the exchange rate. It is almost inevitable to see many swings in public opinion as we get closer to the referendum since there is so much at stake.

Autumn Statement & Charter for Budgetary Responsibility

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Question 2: Do you agree that the Charter for Budgetary Responsibility is helpful in underpinning the credibility of fiscal policy?

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Answer:
Agree
Confidence level:
Very confident
Comment:
It's a step in the right direction, which can help enhance the credibility of fiscal policy, although on its own it is not sufficient to ensure fiscal responsibility. Fiscal policy remains in the hands of democratically elected politicians, if they have other priorities they will always find ways around fiscal rules.

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Question 1: The Chancellor forecasts a cyclically adjusted fiscal surplus by 2017-18 and in cash terms by 2019-20. Do you agree that this planned path of fiscal consolidation is appropriate?

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Answer:
Neither agree nor disagree
Confidence level:
Very confident
Comment:
It's very hard to say without having access to their models, although from the outside it looks rather optimistic that GDP will grow above trend at a time when Europe is still struggling and there is growing global uncertainty, emanating from geopolitical factors, including terrorism, ISIS, the refugee crisis, the Middle East crisis, tensions between Russia and the West. We are going through some very uncertain times and this will weigh down heavily on the growth prospects of the U.K., which is a relatively open economy and therefore susceptible to events in Europe and the rest of the world.

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