Osborne's policies threaten Britain's AAA rating

Moody's warning proves that Britain isn't out of the danger zone.

So now Moody's has got in on the game. Today, it reiterated its warning that the UK could shortly lose its AAA credit rating because Osborne's policies are failing. The pound fell by more than half a cent on the news. Specifically, this was because growth is failing and this hopeless coalition government looks unlikely to hit its deficit reduction targets. As a result of the lack of growth in the economy, this week, Slasher has admitted that he is going to have to allow the automatic stabilisers to kick in to prevent the economy dropping off a cliff. Oh, dear. And all of that in the week when Cameron announced more U-turns on the NHS and prison reform. Three U-turns in a week is rather a lot.

So much for Osborne's claim, a couple of weeks ago, in his speech to the Institute of Directors on 11 May that: "Our credit rating has come off negative outlook ­ when other countries are facing downgrades. We have brought much-needed stability at home and attracted near universal confidence abroad." Looks like that confidence is slipping as each hour passes. Yesterday, the chairman of the Federal Reserve, Ben Bernanke, fired a shot across Slasher's bow when he warned that cutting fiscally too quickly was "self-defeating" and that uneven recoveries are likely to require further stimulus. "Establishing a credible plan for reducing future deficits now would not only enhance economic performance in the long run but could also yield near-term benefits by leading to lower long-term interest rates. On the other hand, "A sharp fiscal consolidation focused on the very near term could be self-defeating." That is how it is looking in the UK. It is interesting that the US has restored the GDP that was lost in the recession and is growing, albeit slowly, while the UK is stagnating and likely needs more stimulus than the US does.

Plus, plans for the new Financial Services Committee also look to be in disarray as the Treasury select committee expressed concern this week about the lack of independence of its members and has called for more external members. Alistair Clark, who worked for years at Mervyn King's side, hardly seems independent. Giving all that power to the Bank means that Mervyn is likely to dominate just as he did with the MPC -- and look what a mess groupthink got us into in 2008. The ex-MPC members Sushil Wadhwani and Willem Buiter also expressed their opposition on giving the Bank of England more powers. Osborne's plans for financial stability are in a mess, along with lots of other policies this government has failed to think through. Plus, banks are still not lending, as Vince Cable made clear today. Maybe one day this government will do something about it!

There was also some more worrying economic news on jobs and retail sales. The latest KPMG/REC report on jobs showed weaker increases in both permanent placements and temp billings. The growth of overall job vacancies eased to a five-month low and there was the lowest rise in permanent staff salaries for three months. Commenting on the results, Bernard Brown, partner and head of business services at KPMG, said: "The latest figures are worrying -­ because they reveal a marked slowdown of the UK jobs market. We'll need to see whether this is a trend or a blip. Employers across all sectors are becoming more cautious about hiring new staff. With businesses and consumers now being hit by higher taxes and fuel costs, public-spending cuts and a continuing squeeze on real incomes -­ this is perhaps no surprise." Too right.

May's BRC retail sales monitor suggests that the underlying strength of the consumer recovery is exceptionally weak. The annual growth rate of like-for-like sales values fell to minus 2.1 per cent, down from the 5.2 per cent growth seen in April. April's figures were boosted by the later timing of Easter this year and the royal wedding, so a sharp drop was always on the cards. But Capital Economics has pointed out that May's survey was particularly weak and, excluding past months, which were adversely affected by the timing of Easter, "This was the weakest reading since December 2008." Before too long, Osborne may have to take the IMF's advice and cut taxes. How about now?

I couldn't let David Smith's ridiculous and out-of-touch column in the Sunday Times over the weekend calling for a rise in the exchange rate to pass unnoticed. He claimed: "The main reason we need a stronger pound is to help control inflation and limit the extent that interest rates will need to rise to do so." Honestly, I don't know what planet this guy is on, as that is absolutely the last thing the British economy needs, given that we have had zero growth over the past six months and austerity has yet to hit. Second, we don't have an inflation problem: we potentially have a problem of deflation, as the MPC has made clear once the transitory effects of VAT, commodity and oil prices and the fall in the exchange rate drop out. Indeed, it would be even clearer that we were faced with the possibility of deflation if falling house prices were included in the CPI. Any attempt to raise rates now would decimate growth further. Smith has been on the wrong side of almost every economic issue throughout this recession and, of course, failed to spot it in the first place.

The UK demonstrably does not need a stronger pound right now. A depreciated currency has provided a welcome stimulus to the economy and any appreciation now would be bad for employment and growth. I guess Smith hasn't noticed that the pound has appreciated strongly over the past 12 months (from $1.45 to approx $1.65) since the Fed did more competitive QE and the MPC, wrongly, did not respond by doing more QE, too. Smith chortled that the Institute of Economic Affairs' shadow MPC shamelessly promotes and supports him. Personally I couldn't care less that six third-rate, right-wing hacks agreed with Smith and voted for a rate rise. They have zero credibility and should be ignored: as the MPC ­- minus "Death" Sentance -- fortunately will do this week. As the IMF made quite clear, a rate hike now would put Slasher in trouble. On second thoughts, maybe they should raise rates . . .

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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A clinically-approved birth control app is changing the way we think about contraception

The particle physicist Elina Berglund has created an app that is 99 per cent effective. 

Women around the world using the contraceptive pill have long complained to their friends about its perceived side effects – weight gain, acne, mood swings to name a few. Some more recent studies have verified that anecdotal evidence – a Danish study from 2013 confirmed that there was a 40 per cent increased risk of depression for women who were on the pill, compared to those who weren’t.

Frustration around the inadequacy or ill-suitability of certain methods of contraception is rife. One woman, Elina Berglund, decided to do something about it.

Formerly a particle physicist at CERN (and a member of the team responsible for the discovery of the Higgs Boson particle), Berglund co-founded Natural Cycles, a contraceptive app, with her husband Raoul Scherwitzl. Approved as a contraceptive app earlier this year, it is downloadable on a smartphone and relies on a relationship between body temperature and fertility to tell women when they're fertile.

But contraception campaigners have viewed the concept with caution. Widespread use of the pill, condoms, and diaphragms comes after decades of campaigns against reliance on "natural methods" – not to mention the opposition of religious organisations like the Catholic church. 

At first glance, Natural Cycles might not seem all that different from the Vatican-approved "rhythm method", which is based on observing the exact stages of a woman's fertility cycle and avoiding sex during ovulation. This can be, according to the NHS, up to 99 per cent effective – but in reality it is closer to 75 per cent, because "people can make mistakes". 

Users of Natural Cycles take their temperature daily and input it into the app (which costs £6.99 a month). The app then compares the figure to its own dataset and uses an algorithm based on Berglund's days from CERN. It also asks for other data, such as the dates of user's periods and whether they are planning for a pregnancy or not, to create a personalised calendar.

If it’s safe to have unprotected sex, then the in-app calendar will show up as green. If not, the in-app calendar will show up as red. On those red days, users should find methods of contraception if they aren’t seeking pregnancy.  

Menstrual tracking apps are all the rage (there are around 1,000 of them on the current Apple app store). But recent studies have shown that those apps are often inaccurate and lack any scientific basis. 

Natural Cycles, by contrast, carried out three clinical trials, each time expanding the dataset to reduce errors. The most recent, written up in Contraception, involved 22,785 women across 37 different countries in settings that mimicked real life. The co-authors pointed out that in instances of perfect use, one out of 100 women become pregnant accidentally. However, in instances of typical use, seven out of 100 women had the same result.

When Natural Cycles first gained publicity, Berglund pointed out to the press that “now they (women) have a new, clinically verified and regulatory approved option to choose from”. Berglund and Scherwitzl are looking into getting Natural Cycles prescribed on the NHS, like the pill.

So is Natural Cycles the future of family planning? The first thing to make clear is that the app cannot actually function as physical contraception – on “red” days, the app advises users to use a condom if they’re having sex and don’t want to get pregnant. It cannot prevent the transmission of sexually transmitted diseases either. 

Nor is the app really marketed to those who may benefit from the most information about their sexual health – 16 to 25-year-olds, who are also the age group most likely to engage in risky sexual behaviour. 

A spokesperson for Marie Stopes, the reproductive health NGO, said: "Apps to track fertility are a high-tech version of what women have been doing for years with a diary and a thermometer.

"For anyone trying to get pregnant, they might well help. However, if you want to avoid pregnancy, it’s much better to choose a reliable, long-acting modern method of contraception like an IUD or implant. Traditional methods, including tracking fertility, carry a much higher risk of unintended pregnancy."

The app relies on an algorithm, meaning it is only as effective as the data that it receives from users. It is also not free, which may exclude its usage by certain sections of society. A blog written for NHS Choices emphasised that the data collected in all the trials was collected from women who were already signed up for the product, making it likely that they had an incentive to continue with this specific additional contraceptive, as opposed to looking elsewhere. Even so, a third of users who had signed up still dropped out, potentially because of the maintenance required to get results from it. 

All the same, Natural Cycles has 380,000 users and counting. It has received clinical approval to be marketed as a medical device, and it seems to be meeting a need – 70 per cent of Natural Cycle's users come from hormonal contraception, according to Berglund. In her account of Natural Cycles in the Evening Standard, Kate Wills highlighted that the Apple Watch had all sorts of health inputs, but no way to track periods.  All kinds of apps exist to make modern life easier – why has it taken so long for one that addresses a concern for so many women to make its way into the mainstream?

The history of contraception is littered with examples of women being ignored. Early birth control studies vastly underplayed the potentially debilitating side effects of hormone fluctuations on women’s mental health and physical appearance, often treating users as though they were hysterical. Add into the equation the stigma around accessing contraceptives safely and non-judgementally, and it’s easy to see why a relatively painless and private form of contraception might be appealing. 

Natural Cycles may well work for some women – those who are in stable relationships, hoping to get pregnant and fastidious enough to note their temperature every morning. But it doesn’t prevent diseases, requires a steady commitment and – here's the clincher – can't take measurements when you’re hungover as alcohol can affect your temperature. There's also a big difference between the "perfect" use of the app, and the likelihood of pregnancy when used in a "typical" fashion. So long as that's the case, old-fashioned contraception seems unlikely to be swept away by a digital revolution.