This Blog, as regular readers know, constantly laments the chronic imbalances in the UK economy. Now the Chief Economist at the BoE has drawn attention to the lack of adequate investment by corporates, who are giving shareholders first pull at the cash generated by profits. Apparently in 1970 £10 in every £100 of profit was paid out in dividends; now the payout figure is £60. The result is chronic underinvestment which is inhibiting growth. It also inflates assets above their worth and could be described as one of several root causes of the dysfunction growing in the way the UK economy works.
In the strategic sense it is one of the most important pieces of news to appear today. It is a shame that few will heed it.