Japan reveals the sun is setting on old world debt economics
That price, for IOUs issued in the world's third largest economy, has huge implications well beyond its shores. For decades low interest rates in Japan, subdued inflation and huge volumes of public debt — now approaching $9 trillion — meant Japan was a siphon of capital for other nations. Japan's ability to do this alongside running up huge debt levels — worth more than 2.5 times the size of its own economy — without collapsing the
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The Independent
40 minutes ago
- The Independent
Fact check: Wage claim confuses mean and median incomes from different years
A widely shared claim on social media said that the median wage was £24,769 in 2008 and £29,600 by 2025. Meanwhile, the claim continued, inflation has increased prices by 70.51% since 2008, meaning that a £24,769 wage would have become £42,231 if it had kept up with inflation. Evaluation The claim does not have any sources attached to it, but it seems likely the post is comparing very different figures. The person posting appears to have cited a figure for mean income – not median – from 2004/05 instead of 2008, with a median household income figure – not mean wage – from 2019 rather than 2025. The facts Where does the claim of a £24,769 median wage in 2008 come from? The poster claimed that the median wage was £24,769 in 2008, without giving a source. It is not clear where this figure was obtained from. It is possible that the user took this figure from a Wikipedia article which somewhat misleadingly cites a report from the Institute for Fiscal Studies (IFS). The Wikipedia article correctly lists the £24,769 figure as the mean, rather than the median which the social media poster claimed. But the Wikipedia article also says that the figure is '2008 data'. This is correct insofar as the IFS report was released in 2008. However, the Wikipedia article does not make it clear that the figure is actually from the 2004/05 fiscal year, not from 2008. The mean is the average number in a data set, whereas the median is the middle value when the set is in numerical order. The figures used by the IFS were taken from the 2004/05 survey of personal incomes (SPI) from HM Revenue and Customs (HMRC). In its report the IFS updated the figures to present them in the equivalent 2007/08 prices. Where does the claim of a £29,600 mean wage in 2025 come from? The poster also claimed without a source that the median wage is £29,600 in 2025. Again it is not clear where this figure has been found. The number matches the Office for National Statistics median household income figure for 2019, making that one potential source for the claim. However, median household income is not the same as median wage. A Google search found that the number also matches an unsourced figure on a jobs website which claims that the 'average salary in the UK (2025)' is £29,600. However, apart from updating the year, this page has not been changed since 2020 when it also listed the 'average salary in the UK (2020)' as the same – £29,600. Owing to the timing it is possible that this website has taken its 'average salary' figure from 2019's household income. The oldest archived version of the page is from April 9 2020, while the ONS's median household income figure was released just a month earlier on March 5. What would the £24,769 income be worth in 2004/05? The IFS's report does not appear to reveal its exact method for calculating the change in wage value between 2004/05 and 2007/08. It simply cites 'authors' calculations based on SPI 2004–05'. That is a reference to the Survey of Personal Incomes (SPI) from that year which the PA news agency has been unable to find. However, the report says that the basic tax allowance of £4,745 in 2004/05 would have been worth £5,140 in 2007/08 prices. This suggests an increase in prices by approximately 8.32% which – allowing for rounding errors – appears close to the 8.45% change in Consumer Prices Index (CPI) between 2005 and 2008. This would mean that an income worth £24,769 in 2007/08 prices would have been worth around £22,866 – again allowing for rounding errors – in 2004/05. What would have happened if salaries had kept up with inflation since 2004/05? Because the income stated is from 2004/05, not 2008 as claimed, the inflation rate since 2008 is not relevant. Between 2005 and 2024 – the last full year for which data is available – prices increased by around 71.45% according to the CPI measurement. This implies that the mean income in 2004/05 (£22,866) would be around £39,202 in 2024 if it had kept up with inflation – again allowing for rounding errors. If comparing CPI figures from March 2005 – the last month of the 2004/05 fiscal year – with the most recent CPI figure in June 2025, inflation has seen prices rise by 79.23%. That would mean the mean salary from 2004/05 would be around £40,981 had it kept up with inflation. Median income in 2004/05 was £16,400. If that income had kept pace with price increases of 71.45% it would be worth £28,117. At the 79.23% inflation rate it would be worth £29,393. What are mean and median incomes today? According to HMRC data, median income before tax was £28,400 in 2023 – the latest year for which an SPI survey has been published. This figure is for individuals, not for households. The mean income in the same year was £40,400. What is the difference between median and mean? Both median and mean are two different ways of measuring the average. The mean is arrived at by adding every value together in a dataset and then dividing it by the number of entries in that dataset. For instance, if calculating mean income, you add together the income of every person in the dataset, whether that be £20,000 per year or £200,000 per year, and then divide that figure by the number of people whose income you have measured. The median is very different. To measure the median you line up all the values in a dataset in ascending order and choose the entry exactly in the middle. The benefit of this approach is that it cannot be skewed by a small number of really high earners at the top. In a way it can be seen as the difference between calculating the average amount that people earn (mean) or calculating what the average person earns (median). – Personal Income Statistics Tables 3.1 to 3.11, 3.16 and 3.17 for the tax year 2022 to 2023 (archived, see Table 3.1 and Table 3.2 for relevant data)
Daily Mail
41 minutes ago
- Daily Mail
The London exodus on display? House prices in commuter towns soar while property values plunge within the capital - use our interactive calculator to find out how much YOURS could be worth
Britain's house price inflation accelerated last month as the average home increased in value by nearly £10,000 in a year - with areas outside London performing best. The average UK house price increased by 3.7 per cent to £269,000 in the 12 months to June – an annual rise of £9,000, according to the Office for National Statistics. This marked an uptick in price growth after a 2.7 per cent annual rise was reported in the 12 months to May. Prices rose by 1.4 per cent in the month from May to June. Average prices increased to £291,000 (3 per cent) in England, £210,000 (also 3 per cent) in Wales, and £192,000 (6 per cent) in Scotland, in the 12 months to June. It comes amid cooling interest rates which fell again to 4 per cent this month - and after price inflation was impacted by changes in stamp duty. The threshold at which movers pay the tax dropped from £250,000 to £125,000 at the end of March. Analysis by online estate agents Purplebricks found the best-performing areas of the UK were in the outer areas of London and nearby commuter towns, five years after the pandemic sparked an exodus of people making the most of working from home. Homeowners in the Kent commuter town of Tunbridge Wells saw the UK's biggest annual increase with prices up by 13 per cent year-on-year, worth £62,274 - meaning the average property is worth £471,779. Elmbridge in Surrey and Bromley in South East London, both also popular with commuters, were the second and third best-performing areas in the last 12 months. Homes in Elmbridge were up 7 per cent compared to June 2024, worth £55,935 and valuing the average at £755,879. Bromley saw house prices increase 10 per cent over the last year, worth £51,228 and pricing the average home at £539,244. The outer London boroughs of Richmond upon Thames (up 6 per cent or £51,169) and Kingston upon Thames (up 7 per cent or £40,127) were also in the top five. But other London boroughs closer to the centre of the capital saw the biggest falls - with Wandsworth suffering the most as it dropped 7 per cent or £47,563 in a year. Islington fell 5 per cent or £35,053 annually, while City of Westminster was down 3 per cent or £34,166. Barnet fell 6 per cent or £32,263 and Hackney slipped 5 per cent or £31,080. However, some areas of London did see a monthly gain between May and June, with Westminster leading the way nationally with a 5 per cent increase or £47,625 gained. Camden was second in the monthly charts with a 5 per cent rise or £41,175; with City of London in third at 4 per cent or £31,288. The worst-performing area month-on-month was the London borough of Brent, which fell 3 per cent on £17,867; while Redbridge was second, down 2 per cent or £10,339. Purplebricks sales director Tom Evans told the Mail: 'The falling interest rates over the year combined with an ever-improving forecast after the Bank of England base rate cut earlier this month should continue to see mortgage rates falling with property prices getting higher. 'We are confident that house prices should keep rising into next year, meaning that by the start of 2026 there is even more money to be made on your property.' Robert Nichols, managing director of Purplebricks Mortgages, added: 'Now is the best time in a while to be looking to be a first-time buyer. 'Interest rates, especially lower interest rates now mean that mortgage rates will be lowered as more people become eligible for a mortgage which will see house prices rise with excess demand. 'Many buyers who might be sitting on the sidelines with money ready to invest in a starter home should be ready to make this autumn their time to buy.' Meanwhile, the ONS said average UK monthly private rents increased by 5.9 per cent, to £1,343, in the 12 months to July. A six-bedroom detached house in Bromley is on the market with Purplebricks for £1.5million Those looking in London's Richmond can get a ground floor flat with Purplebricks for £699,950 Average rents increased to £1,398 (6.0 per cent) in England, £807 (7.9 per cent) in Wales, and £999 (3.6 per cent) in Scotland, in the 12 months to July. Separately, the ONS also revealed today that overall UK inflation rose by more than expected in July as demand for summer travel pushed up air fares and food prices continued to climb. Consumer Prices Index (CPI) inflation increased to 3.8 per cent in July, from 3.6 per cent in June. Most economists had been forecasting inflation to rise to 3.7 per cent. It means the headline rate remained at the highest level since January 2024, when it hit 4 per cent. Separate data released by Rightmove on Monday found the average price tag on a home has tumbled by more than £10,000 across the summer, falling by nearly £5,000 month-on-month in August alone. The property website said that across Britain, the average price of a home coming to market fell by 1.3 per cent, or £4,969, month-on-month in August to stand at £368,740.
Reuters
41 minutes ago
- Reuters
Powell's last Jackson Hole speech could pack a punch
ORLANDO, Florida, Aug 20 (Reuters) - Financial markets are taking in a collective breath ahead of Jerome Powell's eighth and final keynote Jackson Hole speech as Federal Reserve Chair. If the moves following his last seven are any guide, investors buckle up for a bumpy ride. Fed-watchers will be focused squarely on whether Powell signals that he's willing to cut interest rates at the central bank's September 16-17 meeting. His public comments in recent months have been relatively hawkish, but those were all before the release of the weak July employment figures that fired up easing expectations. Rates futures traders are pricing in an 85% probability of a quarter-point cut next month, with another 25 basis points of easing expected by year end. Powell's words on Friday could provide significant clarity about whether these positions are 'in the money' or not. Given that traders are betting so heavily on an imminent move, the 'pain trade' will be if Powell holds the line that policymakers need to see more incoming data before resuming the easing cycle put on hold in December. Investors have reason to be cautious. History shows Powell's Jackson Hole speeches tend to move markets a lot, especially the bond market. And even though Powell is often considered a policy dove at heart, his Jackson Hole set-piece speeches have usually pushed yields higher, not lower. In the month following each of Powell's last seven Jackson Hole speeches, the 10-year Treasury yield has risen by an average of 21 bps, according to Reuters calculations. The dollar has risen 1.4% and the S&P 500 has fallen nearly 2%, on average, over the same period. Stretching that out, the S&P 500 has risen an average of 2.3% between the late-August speech and year end, the dollar has gained 0.4%, while the 10-year yield has climbed 27 basis points on average. But these averages mask some much bigger moves, especially in the month after the central bank jamboree in Wyoming. The stand-out example is 2022 when Powell, in his Monetary Policy and Price Stability, opens new tab speech, invoked former Fed Chair Paul Volcker, warning of the "pain" that households and businesses were likely to face from the tight policy needed to slay inflation. In the following month, the S&P 500 tanked 12%, the dollar rallied 5%, and the 10-year Treasury yield soared 75 bps. Bond yields climbed at least 20 bps in the month following three other Powell Jackson Hole speeches, in 2018, opens new tab, 2021, opens new tab and 2023, opens new tab, the latter being another where Powell signaled a readiness to keep rates higher for longer. Inflation today is not as lofty as it was two years ago, but, sitting around 1 percentage point above the Fed's 2% goal, it is higher than Powell would like. Meanwhile, on the other side of the Fed's dual mandate, unemployment remains at a historical low of 4.2%. This year's theme at Jackson Hole is "Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Policy." Powell has stated that the unemployment rate is the best measure of the labor market. But that does not mean today's low unemployment rate will automatically lead to a hawkish speech - history shows that when unemployment starts to rise, it can move quickly, leaving the Fed woefully behind the curve. Markets are probably prepared for some large price swings whichever way Powell leans. It's also likely that Powell will use the platform to defend his tenure, just like his predecessors: Alan Greenspan, opens new tab in 2005, Ben Bernanke, opens new tab in 2012, and Janet Yellen, opens new tab in 2017. Given the unprecedented public pressure President Donald Trump has placed on Powell to cut interest rates this year, why would the Fed Chair not seize this opportunity to have his say? "He may offer some soft guidance that rates may move lower at a coming meeting. But, this is his last speech at Jackson Hole. He may never again have a platform this influential to offer his view of how his history should be written," economists at UBS wrote on Friday. Will he sign off with a bang? Markets are locked and loaded. (The opinions expressed here are those of the author, a columnist for Reuters)
