About the editor

I'm a macroeconomist based in London. I build models to forecast the economy and test policy scenarios.

I've worked in finance, government and research, and I'm currently at KPMG UK.

This blog is where I write about the UK and European economy, fiscal and monetary policy, and markets. Views are my own and don't represent the views of past and current employers.

LinkedIn · X (@clenoel)

Popular posts from this blog

Is the yield curve back to the 1950s-1960s?

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In recent years, the yield curve has flattened and shifted downwards. The flattening has received a lot of attention because it is viewed as a recessionary signal. In this article, we argue that the fact that the curve has shifted downwards as well as flattening indicates that the yield curve may have changed regime. This regime shift seems to have been caused by lower inflation expectations and lower risk premia. In an environment of lower inflation and lower risk premia, the yield curve may occasionally invert without signalling a recession as it did in 1966. 1. The recessionary signal Inversions of the yield curve have often been used to predict recessions. The 10-year to 3-month spread between US Treasury yields became briefly negative twice this year in March and the May (figure 1), spurring debate about whether this was signalling a forthcoming recession. The negative spread was mainly the result of a decrease of the 10-year yield – from 2.8 per cent on 1 March to 2.4 per cen...
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The long and uncertain road to exiting Quantitative Easing

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There is a rich literature on Quantitative Easing (QE) but less so on its unwinding. QE was initiated in 2001 in Japan, followed by the US in 2008 after the Global Financial Crisis, and there has been time to evaluate it, while there has not been any sustained unwinding of QE so far. The only episode that approaches an unwinding of QE is the so-called ‘Taper Tantrum’ in the United States in 2013, when Treasury yields surged on the news that the Federal Reserve would be slowing down its purchases of bonds. In this article, I survey the literature on QE and use the findings to discuss possible exit strategies. While there is little consensus among central bankers on the optimal exit strategy, what stands out is that the road to unwinding will probably be a long and uncertain one, and central banks may even keep large amount of government bonds permanently on their balance sheet. The channels of Quantitative Easing Quantitative easing is the process whereby a central bank purchas...
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How much would a ‘White Paper Brexit’ cost the UK economy?

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This blog article is the combination of a work that I did with my colleagues Amit Kara with some work that my other colleagues Rebecca Piggott and Arno Hantzsche did.It was first published in NIESR's blog and is reproduced here with permission. The UK government published a White Paper on 12th July outlining its preferences for a future relationship with the EU. In this blog we compare the proposals outlined in the White Paper against other EU free trade agreements (FTA) and also estimate the impact on the UK relative to our central forecast, published in August 2018, that assumes a soft Brexit. Our results suggest that the UK is looking for a trading relationship that is similar in scope to the arrangement between the EU and Switzerland. If that is indeed the case, we believe that the EU will insist that the UK make concessions on the freedom of movement of people and also ask for a budgetary contribution to EU programmes related to the single market. We estimate that the econo...
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