Press Release: This is good deflation – no need to panic

For further comments or to arrange an interview, contact Head of Communications Kate Andrews: kate@adamsmith.org | 07584 778207

Commenting on the new UK inflation figures, Ben Southwood, Head of Research at the Adam Smith Institute said:

We have deflation—albeit extremely mild deflation of 0.1%—for the first time since the 1960s. But this seems to be ‘good deflation’, coming mainly from cheaper goods – especially from cheaper oil— rather than from a drop in consumer demand.

Economists worry about deflation, but only the ‘bad’ kind, when prices are sliding at the same time as wages and output. Bad deflation makes debts harder to bear, puts people out of jobs, and can lead to a downward spiral. Good deflation, when wages and output are rising steadily, makes everyone better off.

Though the Bank of England should stand vigilant against bad deflation, and ease policy if markets think it is coming, it should hold fire right now as UK employees enjoy real pay increases for the first time since before the recession.

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

Sam Bowman’s comments on the new Culture Secretary feature in The i

Deputy Director Sam Bowman’s CityAM piece on John Whittingdale’s appointment to Culture Secretary featured in The i:

The BBC was never meant to be the 5bn behemoth that it has grown into. It needs to be cut down to size, and the new Culture Secretary – John Whittingdale – might be the man to do it.

Sam Bowman’s criticism of the Government’s attack on free speech features in The Metro

Deputy Director of the Adam Smith Institute Sam Bowman was quoted in The Metro arguing that the Government’s pledge to crackdown on hate preachers is both illiberal and a threat to free speech.

From The Metro:

Extremism crackdown ‘threat to free speech’

David Cameron has announced a crackdown on extremism, with powers to tackle radicalisation. The measures include new rules on immigration, restricting people who seek to radicalise youngsters, and powers to close premises that harbour extremists.

Britain must confront ‘the poisonous Islamist extremist ideology’, said Mr Cameron.

His measures will be in a counter-extremism bill in the Queen’s Speech this month.

Opposition MPs and free-speech campaigners criticised the proposals, with Liberal Democrat MP Tim Farron accusing the prime minister of ‘playing politics on the basis of division’.

Emma Carr, director of Big Brother Watch, said the government needed to outline what is meant by extremist’.

Sam Bowman, deputy director of the Adam Smith Institute, feared the anti-extremism proposals could result in the state being able to ‘pick and choose the ideas that British citizens can express’.

Sam Bowman criticism of the Government’s crackdown on free speech features in Bloomberg Business

Deputy Director of the Adam Smith Institute Sam Bowman was quoted in Bloomberg Business, arguing that the Government’s pledge to crackdown on hate preachers is both illiberal and a threat to free speech.

Sam Bowman, deputy director of the Adam Smith Institute, a research group, said the proposals are “particularly concerning” and could lead to people accused of preaching hatred being banned without trial from speaking in public or using Twitter and Facebook.

Read the full article here.