Press Release: For once, missing the inflation target is a good thing

Commenting on today’s fall in inflation to 1.2%, Sam Bowman said:

It’s usually a bad thing when the Bank of England misses its inflation target but today’s figures look like the exception. The fall appears to be due to supply side factors like cheaper fuel and food. On the demand side, inflation seems healthier and closer to being on target, and this is what counts from the macroeconomic point of view. All in all, good news and not something that should cause any panic.

What this does highlight is the absurdity of the government’s pensions triple lock. Pensions are now rising by 2.5%, more than double the 1.2% inflation rate. This would be unsustainable and unnecessary at the best of times, but at a time when tax revenues are worryingly weak this is totally profligate and unsustainable.

Old people have been spared most of the pain of austerity, perhaps for the obvious reason that the grey vote is so powerful, but throwing money at them like this is going totally overboard. As Britain’s population gets older, the demands of the triple lock will become increasingly difficult to meet, and it should be abandoned to help restore stability to Britain’s public finances.

Notes to editors:

For further comments or to arrange an interview, contact Kate Andrews, Communications Manager, at kate@adamsmith.org / 07584 778207.

The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

 

 

Press Release: Letting people spend their pensions how they want is a good idea

Commenting on the pension reforms being set out today, Head of Policy at the Adam Smith Institute, Ben Southwood, said:

Letting people decide what to do with their own money is almost always a good idea, and this reform is no exception.

It’s only a small move, but giving people more flexibility over how they spend the money they’ve saved through their life is positive—a step forward when so many pension reforms over past decades have been steps backward.

The system is a complicated mess, and anything we can do to make it clearer to people how they will be able to use their savings when they retire is a good move.

Why would people have saved up over such a long time only to blow it all? If we trust people to spend their salary we should trust them to spend their savings.

 

Notes to editors:

For further comments or to arrange an interview, contact Kate Andrews, Communications Manager, at kate@adamsmith.org / 07584 778207.


The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Sam Bowman discusses the economic benefits of TTIP on BBC 3 Counties radio

Research Director of the Adam Smith Institute, Sam Bowman, spoke to BBC 3 Counties breakfast programme on Saturday morning about the economic benefits that TTIP would have for the UK and the rest of the world. He also explained the importance all entities, including corporations, holding the government accountable to the law.

Listen to the interview here. (Starts at 02:20:05)