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Another reflection. The savings from the reformed triple lock won't be enough to fund a national care service of the kind Burnham envisages. But he didn't shy away from that. He said everyone will need to contribute, i.e. broad based tax rises will be needed - but not just yet, only after 2030.

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There is precisely zero chance of any NHS savings being enough to fund a universal social care service free at the point of use.

Put differently, the OBR's long-run projections say that - absent some kind of miracle - the UK needs to scrap the triple lock (and do some other spending cuts/tax rises) just to stop debt exploding. We're scrapping it, to pay for (some of) a new age-sensitive spending programme.

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Ben Zaranko @benzaranko.bsky.social · 25/09/2026

One reflection. The triple lock was bad, unsustainable policy and it's good news if it goes in 2030. Credit due for taking it on. But Burnham wants to use it to part-fund a new arm of the welfare state. It's a "tough decision", but one that won't improve the UK's public finance position.

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I'll be at Labour party conference next week - my first ever. Do you have tips? Event suggestions? Would you like to have coffee and talk about economics? Do you know where's good to eat/drink/run in Liverpool? Get in touch!

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One day, our political parties will face reality and stop making farcical, unserious promises to voters -- promises which entrench the delusion that we can enjoy lower taxes and better public services without ever having to pay more, even amidst the crisis-strewn 2020s. But today is not that day.

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Don’t lose your head: the AI revolution versus the French...

... and I'm lucky enough to work in a job where, when I have a thought like this, I get paid to write it down. You can read my latest newsletter (which also includes analysis of the BoE bond sales decision and the latest ONS productivity estimates) here: observer.co.uk/news/busines...

observer.co.uk

Will AI do to lawyers and software engineers what the guillotine did to executioners in revolutionary France?

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On holiday last week, I read A Place of Greater Safety, Hilary Mantel’s marvellous novel about the French Revolution. Because I’m a huge nerd who struggles to switch off, several passages about the use of the guillotine for public executions made me think about the economic impacts of AI...

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Ben Zaranko @benzaranko.bsky.social · 09/09/2026

1) Pandemics are expensive 2) Monthly estimates of debt/GDP are noisy and shouldn't be over-interpreted + short term movements are far less important than longer term trends (a better chart would show them) 3) Debt (or this particular measure of it) has broadly stabilised at c. 100% of GDP

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Re-upping this because I think it's quite Bluesky-friendly (I mean this with affection)

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Ben Zaranko @benzaranko.bsky.social · 09/09/2026

Decided that this point is sufficiently important to deserve a chart

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Ben Zaranko @benzaranko.bsky.social · 08/09/2026

Or, the summary, for those who for some reason don’t want to read a full article about changes to the government’s social time preference rate:

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Ben Zaranko @benzaranko.bsky.social · 08/09/2026

The Treasury announced last week that for the first time in more than 20 years, it’s changing the single most economically significant, philosophically contentious number in government: the discount rate. Why? And why does it matter? My latest newsletter: observer.co.uk/news/politic...

observer.co.uk

‘Project tram’ v ‘Project pothole’: why the government is...

The single most economically significant, philosophically contentious number in government is being changed for the first time since 2003

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Reposted by Ben Zaranko

John Rentoul @rentouljohn.bsky.social · 06/09/2026

Key paragraph of good summary of Budget options by @benzaranko.bsky.social observer.co.uk/news/busines...

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Ben Zaranko @benzaranko.bsky.social · 06/09/2026

One stat which jumped out to me while writing this: UK consumer prices are 16% higher than they would have been had the Bank of England’s 2% target been consistently met over the past decade. The equivalent figure for the Euro area is 9%.

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Ben Zaranko @benzaranko.bsky.social · 06/09/2026

It's that time of year again. The OBR will be sending their first set of forecasts to the Treasury some time around now. I've written about John Healey's economic and fiscal inheritance, and the lessons he might draw from his predecessor's experience. observer.co.uk/news/busines...

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Some story, this. Incredible journalism. All of the undercover footage in restaurants and private members clubs reminded me a bit of Sam Allardyce. Half expected someone to order a pint of wine.

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For housebuilding targets and our ability to construct enough homes and infrastructure to meet our national needs, definitely. For the official productivity statistics on the other hand...

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Yeah I think that's probably right (though I have wondered for a while about lagged effects from, cumulatively, higher levels of investment in the recent period). If it's a TFP/allocation of capital story, I do wonder whether it's partly downstream of interest rate normalisation

Yeah I like the RF analysis, but I did think the dismissal of capital deepening was a little bit thin? Basically just Reeves only held investment/GDP constant, didn't increase it, so it can't be that. Within-sector capital deepening + culling of inefficient firms seem likely candidates to me

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Thanks. Worth noting that John van Reenen has said that the employer NICs hike was *not* to reallocate workers, but was to raise £s within manifesto constraints (I'd pedantically note that the manifesto ruled out any increase in NICs, but that's by the by) www.johnvanreenen.com/_files/ugd/b...

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Ben Zaranko @benzaranko.bsky.social · 01/09/2026

Company insolvencies in England and Wales are still running at elevated levels. Presumably, higher interest rates are part of the reason why. Question: could this have something to do with the UK's apparent productivity rebound, if weaker firms are going under?

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The government is investing £71m in a tungsten mine in Devon. I've written about what this tells us about the economic times we find ourselves in, where security trumps efficiency, and recurring supply shocks are the new normal. observer.co.uk/news/busines...

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Ben Zaranko @benzaranko.bsky.social · 28/08/2026

There's quite the disconnect in US economic policymaking right now. Kevin Warsh says "The Fed needs clear market signals, as unfiltered as possible". Meanwhile, Scott Bessent is busy telling markets that long-term bond yields are too high, and intervening to lower them...

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Ben Zaranko @benzaranko.bsky.social · 28/08/2026

Andy Burnham and John Healey can count themselves lucky: it looks as though the NHS has managed to live within its means for the first time in a decade. If - and it's a big if - that continues, next year's spending review starts to look a bit more deliverable.

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Reposted by Ben Zaranko

Duncan Weldon @duncanweldon.bsky.social · 26/08/2026

This is very good and thought provoking. www.ft.com/content/c96c... Why today’s markets are not as contradictory as they seem

ft.com

Why today’s markets are not as contradictory as they seem

What looks like a breakdown in historical correlations may simply reflect a different macroeconomic regime

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Ben Zaranko @benzaranko.bsky.social · 26/08/2026

Bill Gates on the future of work in a world of AI: Some jobs should be "human reserved", a phrase he likes "because it makes me think of nature reserves - places where we could put buildings and roads, but we choose not to because the loss would be too great". www.gatesnotes.com/work/make-ai...

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Ben Zaranko @benzaranko.bsky.social · 26/08/2026

A bit, yeah - it's still jumped by around 7,000 applications for men, and 16,000 for women, but it is less of an outlier if I plot the absolute change rather than % change

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Ben Zaranko @benzaranko.bsky.social · 26/08/2026

ICYMI: even at A-level, students appear to be paying greater attention to which subjects might produce greater financial returns.

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I don't think so, because the estimates are of what a woman who does (e.g.) a maths degree can expect to earn, relative to a woman with similar prior attainment and background who decides not to get a degree. So it should capture that.

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Not intrinsically of greater value, no - I simply mean that in the face of student debt, and a tough graduate labour market, students appear to be taking greater care that the degree will be financially worthwhile. Not a comment on the societal value of arts and the humanities.

Very true - but the mean return (which would capture the tails) is also low for those subjects. Not necessarily a reason not to pursue them, of course.

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I've split by recorded gender, but could in theory dig further into those who e.g. "prefer not to say", if that's what you mean?

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But, on the whole, it does look like students are following the money. In a world of stagnant growth, with a weak graduate labour market, and where many can expect to be making student loan repayments into their 60s, who can blame them?

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There are also other ways to interpret the data. Maybe economics A-level is on the up because students want to make sense of what’s going on in the world. Politics A-level entries are up 12% year on year; that’s presumably less about money, and more about the UK having had 6 PMs in 7 years.

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Relatedly, we need to consider what economists call the general equilibrium effects. If students pile onto engineering courses, and the supply of engineers massively increases, the returns to an engineering degree is likely to drop.

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There’s a few caveats. First, the returns to different subjects aren’t fixed. Fewer students are starting a computing degree this year, presumably because of a perception that AI makes it less valuable. Things can change.