Can’t be complacent…

From the RBS Chief Economist’s Weekly Brief. Link.

The UK is enjoying its third-longest run of growth since the 1950s. 350,000 more people are in work today than a year ago. Unemployment is close to pre-recession levels. Real wages are rising. Corporate profits are as strong as at any time since the 1990s, at least outside of oil and gas. Business investment has been growing pretty consistently for more than five years. And all this without the slightest hint of inflation. We’ve rarely had it so good.

Reasons to be fearful? Yet if UK history is a decent guide to the future, we’re closer to the next recession than the last one. The greatest risks to the UK lie overseas. A still-fragile Eurozone economy relies on quantitative easing for the little growth it can muster. China’s slowdown is apparent in weak trade flows and lower commodity prices. These are already “priced in” to the view that UK growth will be a little slower in 2016. But recession – the one thing economists are notoriously bad at spotting – is unlikely.

Low. The average inflation reading in the UK this year has been a barely perceptible 0.1%. Lower oil and food prices are playing a role. And a gradual return back toward 2% is expected over the coming year. But other forces are keeping inflation low. The rise in sterling since the middle of 2013 has made imports cheaper. China’s slowdown is a disinflationary force for ‘made in China’ goods. And the forces of globalisation (heightened migration and offshoring boosting competition amongst workers and holding down wage growth) and technological change (similar mechanics) look here to stay. For interest rates to rise, there will have to be a compelling case of higher inflation ahead. For now there simply isn’t.

The pull. During the summer China snatched the ‘global economic risk baton’ from Greece and put the afterburners on. The country’s slowdown has intensified over the past 12 months, causing all sorts of issues for the global economy. At work is a post debt binge hangover and a need to ditch the country’s worn-out investment-led growth model. In the meantime China is pulling down on growth, trade, inflation and expectations for interest rate hikes, including the UK.

All and sundry. It’s not just China, emerging markets as a whole are having a difficult time with the reasons including a failure to raise productivity, a over-reliance on credit to fuel growth and, of course, the negative feedback loop of China’s slowdown. And there is the potential for financial distress should the Fed decide to raise interest rates. Navigating the route from emerging to developed economy has always been both difficult and rare. And so it continues to prove to be.

Tortoise. The eurozone remains characterised by modest growth, worryingly low inflation and an incomplete monetary union. To help with the first two the European Central Bank has floated the idea of further expanding its quantitative easing programme.  It would be better if the laggards – France and Italy – deepen reform efforts to prime their economies for growth. And the third? A report released by the EU’s institution leaders recently laid out a roadmap for ‘economic & monetary union’. Decades worth of political capital have been invested in the eurozone project. And much more will be invested to ’complete’ it. But that process, coupled with modest growth, leaves the eurozone vulnerable.

The weight. If you think the financial crisis was caused by too much debt best look away now. Since 2007 total debt in advanced economies has risen from 2.5x GDP to almost 3. Japan’s precarious 390% debt-to-GDP ratio is well known. But Belgium’s has risen by 85 percentage points since 2007 to nestle behind Japan at 342%. The Netherlands stands at 321%, and Sweden at 300%. China’s is up by 87 percentage points and France’s by 80. On this measure the US and UK look abstemious, as debt:GDP ratios have risen by 39 and 21ppts respectively. Low interest rates means servicing this debt is affordable. But what offers support can also imprison. How, with debt high and rising, can we afford higher interest rates?

Team Sky. The UK lags our peers in what we can achieve for each hour we work. GDP per hour is about 27% below that of the US, 25% behind France and 22% less than Germany. How do we close this gap? Firstly it’s about education. That’s education for all ages, but especially early years education, which equips children with the behavioural bedrock necessary for cognitive development. Second, we need more investment. We need more roads yes, but we also need to invest in energy, housing and broadband. Lastly innovation. That’s more than new products, encompassing better processes, ways of working and management. The best motivating factor is an old one – fear. Competition drives improvement.

The Monday Morning Quote #337

“The trouble with common sense is that it is so uncommon.”

Anna Freud

Anna-FEUD

Practice Plan’s NHS Confidence Monitor Results…speak for themself

NHS-Confidence-Monitor-Results-May_June_2015

 

 

NHS-Confidence-Monitor-Results-May_June_2015 2

 

 

NHS-Confidence-Monitor-Results-May_June_2015 3

 

 

The Monday Morning Quote #336

“An ounce of prevention is worth a pound of cure.”

Benjamin Franklin 1735

Benjamin_Franklin

The Weekend Read – The Diet Delusion by Gary Taubes

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Gary Taubes is a scientific researcher and journalist. His previous books have examined the myth of cold fusion and scientific experimentation. The cover claims that he is “America’s most controversial scientific writer”.

When the book was published in 2009 my brother suggested that I give it a look, at 640 pages and with a host of references to scientific research I wasn’t too keen, but in early 2010 I persevered. It’s an eminently readable book which draws you in from the preface which tells the story of William Banting, a corpulent man who, in spite of regular exercise and a good diet, could not lose weight. With the guidance of his physician, William Harvey, he changed his approach to eating (and dieting) and scrupulously avoided food that might contain sugar or starch – the result was that he lost 50lbs in 18 months or so. He became so famous that the word ‘banting’ entered the language as another word for dieting. The results were published and ridiculed by the scientific hierarchy.

The book proper starts with President Eisenhower and his heart disease which leads the section on ‘The Fat-Cholesterol Hypothesis’. The next section explores ‘The Carbohydrate Hypothesis’ and the final third is devoted to, ‘Obesity and the Regulation of Weight’.

As you would expect from the book’s material there were some mixed responses to Taube’s book with him being accused of interpreting data to suit his theories – much like those who convinced us to give up animal fats.

I can’t add anything to the review that wasn’t made by David Colquon in the improbable science blog here.

Summary:

Here is his Gary Taubes’ 10 point conclusion – read the book and make up your own mind at least you’ll be able to hold your own in the conversations about diet and the apparently new evil that is sugar. Funny how I was considered a zealot and my wife a crank when we would look at foods on supermarket shelves for “hidden” sugars 25 years ago in order to give our patients and their children good advice. “We’re all sugar zealots now Father”, as they might have said on Craggy Island.

““As I emerge from this research, though, certain conclusions seem inescapable to me, based on existing knowledge

  1. Dietary fat, whether saturated or not, is not a cause of obesity, heart disease, or any other chronic disease of civilization
  2. The problem is the carbohydrates in the diet, their effect on insulin secretion, and thus the hormonal regulation of homeostasis – the entire harmonic ensemble of the human body.  The more easily digestible and refined the carbohydrates, the greater the effect on our health, weight, and well-being.
  3. Sugars – sucrose and high-fructose corn syrup specifically – are particularly harmful, probably because the combination of fructose and glucose simultaneously elevates insulin levels while overloading the liver with carbohydrates.
  4. Through their direct effect on insulin and blood sugar, refined carbohydrates, starches, and sugars are the dietary cause of coronary heart disease and diabetes.  They are the most likely dietary causes of cancer, Alzheimer’s disease, and the other chronic diseases of civilization.
  5. Obesity is a disorder of excess fat accumulation, not overeating, and not sedentary behaviour.
  6. Consuming excess calories does not cause us to grow fatter, any more than it causes a child to grow taller.  Expending more energy than we consume does not lead to long-term weight loss; it leads to hunger.
  7. Fattening and obesity are caused by an imbalance – a disequilibrium – in the hormonal regulation of adipose tissue and fat metabolism.  Fat synthesis and storage exceed the mobilization of fat from the adipose tissue and its subsequent oxidation.  We become leaner when the hormonal regulation of the fat tissue reverses this balance.
  8. Insulin is the primary regulator of fat storage.  When insulin levels are elevated – either chronically or after a meal – we accumulate fat in our fat tissue.  When insulin levels fall, we release fat from our fat tissue and use it for fuel. 
  9. By stimulating insulin secretion, carbohydrates make us fat and ultimately cause obesity.  The fewer carbohydrates we consume, the leaner we will be.
  10. By driving fat accumulation, carbohydrates also increase hunger and decrease the amount of energy we expend in metabolism and physical activity.”

Oh yes Amazon have it.

The Who – Spero ante decessero senescunt.

THE WHO today confirmed that they are postponing all remaining dates on their “THE WHO HITS 50!” North American tour.  They had initially postponed FOUR shows on doctors orders after Roger Daltrey contracted a mystery virus.  Initially it was hoped that the rest of the tour might proceed, but after extensive tests the seriousness of his condition became apparent when doctors diagnosed Roger as having viral Meningitis and prescribed a period of rest.  The band apologize to fans and realize that the postponement will cause an inconvenience for ticketholders.  It wasn’t a decision taken lightly–THE WHO always give their fans 100% and were never going to compromise the show, but ultimately the band had no alternative but to postpone the tour.

Roger was particularly disappointed as he had been especially looking forward to the Teen Cancer America benefit in Los Angeles, a charity that he and THE WHO have worked tirelessly for. Thankfully he is already getting better and said, “We are very sorry to disappoint our fans in this way.  For the last four weeks, I have been in and out of the hospital and have been diagnosed with viral Meningitis. I am now on the mend and feeling a lot better but I am going to need a considerable time to recover.  The doctors tell me I will make a complete recovery, but that I should not do any touring this year.”

Pete Townshend added, “We are rescheduling all the shows for next Spring 2016. We apologize to all our fans who have supported us in the last 50 years. Once Roger is completely well we will come back stronger than ever and Roger and I will give you all a show to remember.”

Is this where it all ends? I wonder.

(PS I have used Google translate for the title line, we’re clean out of babelfish.)

Could you live a life like this?

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