Head of Research at the Adam Smith Institute Ben Southwood spoke to BBC news about the latest CPI figures; he explains the difference between good and bad deflation.
Deputy Director Sam Bowman argues that even as Greece pushes closer to a debt deal, a Grexit is not fully ruled out yet:
Greece is in not one, but two holes. It owes €330bn (£237bn) in national debt, equivalent to 196 per cent of GDP, and its nominal GDP is also at a 13-year low. This means that unemployment cannot come down rapidly, as it has in the UK –where nominal GDP grew healthily after the crisis – so nominal wages will have to fall to a “new normal”. That takes an agonising amount of time, because firms prefer to sack some workers instead of cutting wages across the board. Greece’s future, then, looks to be one of persistent high unemployment. Before this is addressed the country cannot hope to overcome its economic malaise – it is simply not credible to expect supply-side deregulations to deliver the sort of growth Greece needs without a healthy level of nominal spending. That means no solution to the debt problem either. If Greece stays in the Eurozone, it will be on life support for the foreseeable future. It’s hard to rule out Grexit just yet.
Head of Research Ben Southwood's comments on the latest CPI figures feature in Newsweek.
This is the first time the UK has entered deflation since official records began in 1996 and the first time since 1960 based on historic estimates.
However, Ben Southwood, head of research at the Adam Smith Institute, said the negative figures should be embraced by consumers.
"We have deflation - albeit extremely mild deflation - for the first time since the 1960s. But this seems to be 'good deflation', coming mainly from cheaper goods - especially cheaper oil - rather than a drop in consumer demand," he said.
Southwood added that the Bank of England, which has set a target of 2% inflation, should remain vigilant against bad deflation.
Deputy Director Sam Bowman's comments on the Bank of England's decision to replace Adam Smith on £20 notes feature in The Daily Mail:
The change could leave Scotland with only one representative on Bank of England notes, inventor James Watt, who appears on the £50. Sam Bowman, of the think-tank the Adam Smith Institute, said: ‘It’s a great shame that the bank is removing Adam Smith from the £20 notes. ‘Smith is not just the father of economics, he is in many ways the father of the modern industrialised world.’
For further comments or to arrange an interview, contact Head of Communications Kate Andrews: firstname.lastname@example.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.
Deputy Director Sam Bowman spoke to BBC Radio Scotland about the benefits and consequences of the living wage and what could be done instead to put more money in the hands of low-paid workers. Listen to the full interview here. (Starts 1:40:30)
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.
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’.
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.
For further comments or to arrange an interview, contact Head of Communications Kate Andrews: email@example.com | 07584 778207
The right to free speech cannot be conditional on what is being said. ‘Hate preachers’ may be bad people but unless they are making direct threats or incitements to violence - which we already have laws against - their ideas must be given the full protection of the law. That includes preaching intolerance. Anything less gives the state the power to pick and choose the ideas British citizens can express.
The details of these proposals are particularly concerning – people accused of hate preaching will be banned from speaking in public or using Twitter or Facebook.
These measures are almost certain to be abused as well – stop-and-search laws originally justified on anti-terror grounds are now mostly used to stop conventional crimes, and in 2008 it emerged that half of local councils had been using anti-terror laws to snoop on people who put their rubbish out on the wrong day.
We should hold these ideas up to scrutiny and challenge them in public debate, not push them into the shadows. With these measures Theresa May has crossed a line – if she pushes ahead, significant liberties will be lost.