Jumana Saleheen's picture
Affiliation: 
Vanguard Asset Management
Credentials: 
Chief Economist

Voting history

Assisting Households Facing Rising Energy Costs

Question 2: Which of the following is the best way to address the impact of rising energy costs on household finances?

Answer:
Conditional/targeted transfers
Confidence level:
Very confident
Comment:
Standard economic analysis tells us that the best way to address the rising cost of energy bills on household finances is to provide targeted transfers to the households that need it. The intuition here is that society can reach a higher level of welfare when prices are not distorted through taxation and subsidies. Instead, the market price is allowed to ‘clear’ the market. Those who can pay the higher price do so, with a share of them adjusting their demand down in response to the higher price. Those who cannot afford the essential level of heating costs are provided a lump-sum transfer from the government to purchase the essential levels of energy.

Prospects for UK Economic Growth

Question 2: What is the most important contribution economic policymakers can make growth in the UK over the next decade? 

Answer:
Other or don't know
Confidence level:
Confident
Comment:
I think the most important action policy makers can take is on climate change. Policymakers must set out policies and regulations that incentivise business to select the early action (orderly path) to net zero. These policies must go beyond the high level net zero commitments. They must be detailed, like the EU taxonomy and EU fit for 55 policies. They should include plans to increase carbon prices, and expand its use, as a way to internalise the price of greenhouse gas emissions.

Question 1: How do you see prospects for future (per capita) GDP growth in the UK in the next decade?

Answer:
Other or don’t know
Confidence level:
Confident
Comment:
I expect moderate annual growth over the next decade. Growth over the next decade will be similar to growth over the past decade, averaging around 2% per year.

Effects of an embargo on Russian gas

Question 2: By how much would an immediate EU-wide import ban on Russian gas reduce German GDP growth per annum in 2022-3, in percentage points (pp), if the government offset the costs with a well-targeted fiscal policy?

Answer:
Between 1pp and 3pp
Confidence level:
Confident
Comment:
An EU ban on Russian energy is likely to lead to a recession in Germany. This could prompt a large fiscal package which could offset most, but not all of the fall in output.

Question 1: By how much would an immediate EU-wide import ban on Russian gas reduce German GDP growth per annum in 2022-3, in percentage points (pp), absent other policies?

Answer:
Between 3pp and 5pp
Confidence level:
Not confident
Comment:
Germany is one of the largest importers of Russian gas. It imports 65% of its gas from Russia, compared to 40% for the EU. An immediate EU ban on Russian gas would therefore have a larger impact on German output on the EU. Germany is known to have a larger manufacturing sector than its EU counterparts. A shortage of gas supply is likely to lower manufacturing output and exacerbate an already disrupted global supply chain.

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