All posts on June, 2016


Business and financeGulliver

Heathrow’s hopes of a building a third runway receive another setback

HEATHROW is probably the world’s most congested airport. It operates at 99% capacity; a plane lands or takes off there every 45 seconds. Most jets must circle London for a while until an air traffic controller can find them a landing slot on one of the airport’s two runways. No surprise then, that Heathrow would like to build another runway to ease the strain. Many businesses and passengers would like that too. But in the wake of the Brexit vote it is, alas, now much less likely.

David Cameron, Britain’s prime minister, dithered over whether to expand Heathrow for years. The idea of a third runway plays badly with Conservative MPs in posh constituencies under the flight path. Nonetheless a report that the government commissioned on how to increase air capacity around the capital was finally published last year. It looked at three options, including building a second runway at Gatwick, the capital’s second-biggest…Continue reading

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Business and financeFree exchange

Can you identify any impact of Brexit on the economy?

A PROBLEM facing economists is that it won’t be possible to assess the macroeconomic impact of the Brexit vote for quite some time. The official estimate of GDP growth in the third quarter of this year will not be published until late October.

More annoyingly, this estimate will not have a detailed breakdown of what’s going on in the economy; we will have to wait until late November for that. We won’t get any hint of the impact on unemployment until around September. However, there are high-frequency data which, unfortunately, paint a very worrying picture. 

Journalists and economists look to financial markets as a decent proxy of what the economic damage will be. For instance, the collapse in housebuilders’ shares is consistent with a 5% fall in house prices next year, based on historical data, according to Samuel Tombs of Pantheon Macroeconomics, a consultancy.

However, one big problem is that financial markets are all over the…Continue reading

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