Brian’s Brainstorm

Economists have a record of getting it wrong

Chris Giles, in “Economists’ rare unity highlights the perils of Brexit” (June 16), suggests that when economists reach a strong consensus, it is more likely to be right. History suggests otherwise. The 364 economists who wrote a letter to The Times protesting against the 1981 Budget said there was “no basis in economic theory or supporting evidence for the government’s belief that by deflating demand . . . [it would] induce an automatic recovery in output”. Only a handful of economists stood against this consensus. Yet publication of this letter coincided with an economic recovery which saw domestic demand grow at an annualised rate of 3.3 per cent over the next five years.

Then in 1999 The Economist conducted a survey of 164 economists which found that two-thirds were in favour of giving up the pound and joining the euro. Yet we now know this would have been a massive policy blunder for the UK. Indeed the bias in favour of joining the single currency, at that time, was all the more remarkable given that, earlier that decade, Britain endured a disastrous dress rehearsal with its unhappy participation in the Exchange Rate Mechanism.

With this shocking record, it is entirely possible that the perils of Brexit are being overstated by majority of economists.

Brian Durrant

Staff Matters

  • Mark Tomlinson has this month signed up to abseil off the top of the 128 feet tall Peel Tower in Ramsbottom with his daughter Ella
  • This is sure to be a challenge for Mark who admits himself that he is terrified of heights!!
  • However this isn’t just a cunning way for Ella to frighten her Dad. Both Tomlinson’s are seeking to raise money for Annabelle’s Challenge the UK’s leading charity for Vascular Ehlers-Danlos Syndrome.
  • Ella worked closely with the charity during a school project and is keen to give back to the team that helped her so much during this assignment.
  • If you wish to contribute a link to the Virgin Money Giving page can be found by clicking on the logo to the left.

Statistical Information

Last Month This Month Change
CPI 2.5% 2.4% -0.1%
RPI 3.3% 3.4% +0.1%


The Office for National Statistics (ONS) released figures for the Consumer Prices Index (CPI) demonstrating that this inflation measure has fallen back from the recent highs experienced in Autumn 2017.

The positioning of Easter in this calendar year has caused a statistical quirk pushing the effects of price rises over the holiday period into the March figures of the previous month. As inflation is measured via comparing prices against this time last year the rates have come down.

However the increased cost of oil has impacted both motor fuel and utility prices limited any downward inflationary pressures.

UK Consumer Price Inflation

Mar 2018 May 2018 Change
Base Rate 0.50% 0.50% +0.00%


For the second month in a row the Monetary Policy Committee (MPC) voted 7-2 in favour of maintaining an unchanged Base Rate of 0.50%.

MPC Meeting – Summary and Minutes

The MPC is next due to meet on 21st June 2018.