Richard Portes's picture
Affiliation: 
London Business School and CEPR

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:
Strongly agree
Confidence level:
Extremely confident

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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:
Very confident

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:
Very confident
Comment:
If the perceived likelihood of Brexit were to rise, then uncertainty in the economy and in the financial markets must rise. Even the proponents of Brexit have no clear view of what would happen - indeed, of what they would like to see happen, in regard to our subsequent relationship with the EU - after a vote to leave. And views on the likely outcome of negotiations diverge widely. How much this would affect volatilities of asset prices is another question - I'd say some, but I wouldn't expect volatility spikes of the degree we saw in the financial crisis.

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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:
Agree
Confidence level:
Confident
Comment:
I agree, but I wouldn't focus on volatility - leave that for the finance people, much overemphasised. But if the perceived likelihood of Brexit rises, the sterling exchange rate is likely to fall further. The evidence that Brexit would be significantly negative for the British economy is clear, and those in the financial sector will be particularly sensitive to this. Perhaps most important for the exchange rate, however, would be capital outflow and expectations of a fall in FDI, as well as expectations of a deterioration of the current account.

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 main impact is on Chinese imports of raw materials and semifinished goods. That can't be a significant proportion of our exports to China. The effects on us of the negative impact on emerging market exporters to China must also be second-order. And our exports will benefit from the Chinese switch towards consumption - in particular, foreign travel and educating Chinese students abroad, provided we have a more sensible visa policy. That may require a change of Home Secretary. Chinese financial liberalisation and the development of their financial sector (part of the structural switch) will also probably be positive for the UK.

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