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Her Majesty's Treasury is due to report in June 2003 on the economic case for the UK adopting the Euro. One criterion concerns the extent of economic convergence between the UK and the European Union countries. Differences in financial, credit and housing institutions between countries present one important subset of constraints to sustained convergence (Maclennan et al, 1998) - largely neglected in the economic literature on common currency areas. These types of differences create tension within the Eurozone. Empirical evidence supporting these concerns has emerged in signs of overheating in the Netherlands, UK and some of the fringe economies, and in the relative stagnation of Germany and Italy. The UK's buoyancy, however, is accompanied by serious economic imbalances, with consequent risks of instability. These would be exacerbated should the UK be prematurely locked into an exchange rate and interest rate regime unresponsive to domestic conditions. There is much to learn from European experience: from Germany and Italy, on the consequences of illiberal economic structures; from The Netherlands, on some of the risks of liberal credit markets; and from Denmark, with a liberal credit market but rational property taxation. In this paper, John Muellbauer argues that convergence does not have to be fully achieved, if there is a counterbalancing policy instrument to mitigate some of the effects of these slow-to-dissipate differences. Specifically in the UK, a reformed system of property taxation would contribute greatly to long-term stability and the preservation of economic balance. [ABSTRACT FROM AUTHOR]

The article summarizes the economic outlook for Great Britain in 2012. Based on data gathered from the labor market, output gap in the country is estimated at around negative 3.2 percent of potential output at the end of 2011. Experts are predicting that employment prospects will deteriorate further in 2012, which will result in lessening the attractiveness of the country for migrant labor. The regional financial crisis is also said to have a significant impact on business investment funding.

Provides an assessment of the outlook for consumer spending in the wake of the boost being provided by consumer "windfalls," drawing on research being carried out under the macroeconomic modelling program of the Center for Economic Forecasting. Trends in consumers' expenditure and retail sales volumes from 1990 to 1997; Status of inflation and average earnings from 1992 to 1997; Measures of financial liberalization.