Current deficit is 5% (this mostly funds unproductive spending like welfare and public pensions)
UK is also growing at sub 1.5% (so no primary surplus which means debt still grows)
And because the UK over-taxes the productive segment of the population (vs say the US which is under-taxed) there is little scope for tax rises on them to correct the revenue vs spending imbalances.
if they tried that (more taxes on the productive) productivity trend growth would take a hit which would then result in even lower growth (as a response to that Gilt yields go up as credit risk would go up for bond holders).
They are pretty boxed in at this point with the Iran energy shock just putting even more pressure on them.
Interesting data set. It looks at local salaries but then adjusts them by local purchasing power.
Switzerland (even with its high prices) still comes out largely on top. London and NYC do fairly poorly even though they have the highest salaries. Houston, Indianapolis, Atlanta etc do quite well. Surprised at Vancouver being so high up.
I don’t know the details as to how the data set is constructed so I can’t comment authoritatively on why Vancouver looks favourable. I would just note that housing is the only element of Vancouver’s cost that is relatively high. And certainly NYC, SF, etc., have much higher housing costs.
I would also note that the US has experienced higher inflation than Canada in recent years and the Canadian dollar is only about US$ 0.70.
As mentioned in a different thread, my middle daughter and SIL quit their London jobs and moved in with us in March with their daughter.
Yesterday they told us that their move from the UK was now going to be extended indefinitely from the originally envisioned one year. They will continue to rent out their London flat as they have good tenants.
The main reason for their change of plans was the welfare of their 4 year old daughter. Living in Vancouver for the last seven months they realized how much better the air quality is than in the London area they live in. They were also impressed with the quality of her daycare and the fact it costs C$10 per day. They like that they can walk to seaside beaches where their daughter loves to play for hours on end.
Vancouver is a lovely place to live and I am pleased, but not surprised, that they have fallen in love with it. My daughter may work here but my English SIL will need to apply for a work permit. They will probably stay with us rent-free until next September so that will make their financial situation easier.
My daughter will miss much of the cultural advantages of London but Vancouver has a good arts scene, albeit not on the scale of a London. And they will be able to enjoy it more here because of built-in babysitters.
And the Vancouver Whitecaps are a good alternative to Fulham FC for my SIL. He has also gotten interested in the Vancouver NHL and CFL teams. Today he will experience Canadian Thanksgiving.
Didn’t see any US cities below NYC. Liked how midwest cities sit 50%-75% above there at the top of the chart, and you wonder why I live in the 'po. You think they could at least put Chicago on there…
