WGGS Economics Magazine - February 2024

Economics

THE WorLD IN BrIEF February 2024

The post office scandal growth of e-commerce in the uk Who is Britain's Best paid Boss? vinted or minted? & More...

Why did Angola decide to leave the opec?

By uma Following Qatar and Ecuador’s exits in 2019 and 2020 respectively, Angola had stated that from January 1, 2024, they would be officially withdrawing their membership in the OPEC. The OPEC (Organisation of Petroleum Exporting Countries) is a cartel that consists of 12 oil-producing countries world-wide (excluding Angola).

Angola’s production of an estimated 1.8 million barrels of oil per day is relatively small compared to bigger players in the market such as Saudi Arabia. A cartel is an association of suppliers who cooperate with the aim of maintaining prices at a high level at restricting competition.

The Minister of Mineral Resources, Oil and Gas of the Republic of Angola stated that, “Angola has always fulfilled its obligations and fought all the time to see OPEC modernise, help its members gain advantages.

We feel that in this, Angola currently gains nothing by remaining in the organisation and, in defence of its interests, decided to leave.” As the Angolan economy heavily relies on support from the oil market due to an abundance in natural resources, the imposed cap on production from the leading members of the cartel effectively posed a real problem to Angola. 90% of all exports in Angola are of oil and gas - reducing production of these products could severely impact Angola’s potential scope of attracting future investment.

Due to their dwindling oil production and strain on resources as well as ageing infrastructure, Angola are actively seeking FDI in order to

diversify and boost their growing economy. The OPEC+ agreement towards the end of last year included the voluntary limiting of production of oil in order to boost the global market, ensuring producer countries be met with higher prices for their oil.

Though leaders of the cartel including Saudi Arabia and Russia were hoping for a rise in prices, the crude oil market prices fell shortly after the cutbacks.

As a result of the production cut, U.S. oil output grew unexpectedly towards the end of last year - posing a threat to the OPEC’s stronghold on the global energy market. The unexpected growth in U.S. oil output not only threatened the leaders of the organisation but also smaller players, including Angola. Like many other countries in the OPEC, they are “keen to maximise their resources”, according to Martijn Rats at Morgan Stanley. A potential loss of market share as well as imposed production caps lead to disputes between the OPEC and Angola - finally leading to the latter’s swift exit from the organisation.

The USA and China were quick to back up Angola’s departure from the OPEC. On December 22, 2023, at the African Leaders summit in Washington D.C., Angolan and American officials came together and signed multiple agreements.

This not only strengthened their political relationship but also showed future promise for U.S. and Angolan economic cooperation and support. In addition to this, China

seemed to really take on Angola seriously in their “Belt and Road Initiative’’. Chinese companies have also been investing Billions into the Angolan economy - specifically their oil and energy sector. I guess the real question is what would be the benefits to the USA and China?

Whether it be the current influx of significantly cheaper natural resources and oil or strengthening public relations with Angola, both the U.S. and China have been promising to invest in and support the Angolan economy and government since December last year. Both of these powerful countries seem to be proposing Angola with investment plans and strategies as the country’s decision to leave the OPEC cartel has only increased its appeal for FDIs and attracting business partners.

Joe Biden had even committed to the U.S. investing $900 million in a solar project hoping to diversify Angola’s energy market away from oil towards renewable energy sources.

Angola seems to be benefiting from leaving the OPEC, growing to solidify its place as part of the top 5 strongest African economies in 2023: 2024 only seems to hold more economic growth and prosperity with their new links to two dominating global powers.

Developing their technology and diversifying their skills and education seem to be the major objectives for the Angolan government for the rest of 2024. With the help of external powers, we can look forward to a progression in the Angolan economy in the coming years.

Why modi's beach shots sparked calls for india to boycott the maldives?

By anjalee & jahnvi How did the conflict arise?

The conflict began following derogatory comments made by three Maldivian Junior Ministers towards Prime Minister Narendra Modi on his social media posts that illustrated him promoting tourism in the Lakshadweep islands, off the southwest coast of India. This has dramatically escalated into a political conflict between India and the Maldives, worsening the already strained relationship between the Indian Ocean neighbours. Due to this, the tropical paradise is in danger of facing a boycott by Indian tourists, who consequently, are also the largest contributors to the Maldivian economy.

How does India help Maldives?

Recently, in the past few years, Maldives have depended on India heavily in a variety of sectors such as “food, education and healthcare”, as stated by Shafeeg, a supporter of the Maldivian Democratic Party.

For example, India shipped a supply of 100,000 COVID vaccines to help at the peak of COVID times.

Furthermore, India has also become the main destination for Maldives medical needs. The relationship between the two countries have significantly expanded in the sector of tourism, with India surpassing China and Europe as the leading source of tourists. Last year, Indians were the largest group by nationality that visited Maldives comprising nearly 11% of the tourism market according to the official Maldives tourism website.

How has the feud affected Maldives economy?

In Maldives, tourism accounts for almost one third of the country’s economy, so the current feud may have detrimental effects on their economy. Currently, amid the row, EaseMyTrip, a popular online travel company, has declared a full suspension of flight reservations to the Maldives. Additionally many travel websites have seen significant drops in Maldives bookings, ‘We have seen a 40% drop in bookings over the last two days’, as stated by Ankit Chaturdevi, vice president of Rategain, a favoured travel software company.

How has the Maldives responded?

Shortly after the controversial comments were made, the three Junior Ministers were suspended from their jobs, whilst the government clarified that these opinions were personal and did not reflect the government’s position.

Additionally, during the time this was taking place, President Mohamed Muizzu embarked on a state visit to Beijing. During this trip, he asked Beijing to send more tourists to the Maldives. This ties into Muizzi’s pledge to abandon the ‘India First’ policy in order to make New Delhi and Beijing compete for influence and tourism to the Maldives.

However, many residents of the Maldives are disappointed with their government due to a lack of good judgements made by their officials.

They stated that they had strong cultural ties with India, and as a result of the boycott, the Maldivian economy will suffer.

The growth of e-commerce in the uk By isha & preesha Percentage change in annual internet retails sales value in the United Kingdom (UK) from 2008 to 2022.

60% 50% 49.2% Percentage Change Y-O-Y

As the world modernises, the internet expands and as technology thrives, our life begins to narrow down to our fingertips. E-commerce has begun to populate the markets, where consumers have navigated to the easier option of being able to access any good from any store at any time and all on one device through an online transaction, leading to the population of shopping malls to decrease by 7% and outlet centres to decrease by over 9% in the recent years. This has been more prominent since COVID-19. Electrical companies such as John Lewis and the Apple Store have been standing stronger in their online stores with their electronic sales, where customers find more availability of their desired products online than in-store. This leads to better customer satisfaction and could lead to consumer loyalty in the long run. During the first COVID-19 outbreak, people weren’t allowed to leave the house, and therefore suffered from not being able to purchase their desired goods and services. However with the eminence of E-commerce, this catalysed the growth of the top online shopping website in the UK; Amazon. Due to the high demand and regard for the efficiency and usefulness of Amazon, its revenue increased to $386.064 billion by the end of 2020, which was a 37.62% increase from 2019.

These aspiring figures have led to conclusions such as the Federal Trade Commission in considering Amazon to be a monopoly in the current market.

One downside of the growth of E-commerce could be some retail stores cutting their branches in shopping malls and high-streets leading to the lack of availability of certain in-store shops because companies realise they can save money on renting out spaces in shopping malls. However the rise of e-commerce could result in the growth of different, more specialised jobs in the field of computer science.

47%

40% 30% 20%

28.8% 19.7% 18.1%

21.2% 15.3% 15.4%

10%

12.9% 12.8%

16.6%

15.9% 14.5% 10.3%

0% -10%

-9.8% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

With the number of online fast fashion stores dominating the current markets, and fashion trends constantly changing, consumers fall into the trap of spending hundreds of pounds every month on new clothes because they underestimate the cost of cheap clothing, until it accumulates into a negative bank balance. Companies like Shein, ASOS and PrettyLittleThing are prime examples of firms and companies who thrive off of their profits of E-commerce, with Shein’s predicted revenue reaching $60 billion by 2025. Shared statistics from websites such as Statista have explored how internet sales accounted for almost 27% of all retail sales in Great Britain in 2023, which has soared by 36.8% from the previous year as internet sales hit -9.8% of all retail sales in 2022. This can be seen in the graph shown.

What does this growth in E-commerce mean to the UK in the long run?

What does this growth in E-commerce mean to the UK in the short run?

As the increase in consumption of goods and services are catalysed by the growth in E-commerce, householder expenditure statistics creep up the graphs.

With consumption being a major component of economic growth in the UK; roughly 61%, the growth in E-commerce is contributing to the growth of the economy, and therefore reducing the gap of spare capacity in an outwards Aggregate DemandCurve shift.

With lots of competing e-commerce stores in the UK at the moment, companies have to work extra hard to try and attract customers at their stores by increasing their sales. These risks can lead to the downfall of the firm, as companies fail to scrape profits, and therefore can’t afford to remain a running business anymore.

This can contribute to high levels of unemployment.

Additionally, with the growth of e-commerce, the number of deliveries increases massively per week, where more drivers and vehicles have to venture out across the country for deliveries. This can contribute to the higher levels of pollution in the world, which doesn’t adhere to the government’s policies to try and reduce pollution.

Furthermore, with the high growth rate of E-commerce, Artificial Intelligence replaces millions. This means that jobs can be replaced by technology as stores close down and replace skills with AI. This means that the unemployment rate increases at a parallel rate to the growth of AI, where certain skills are useless for other firms and companies, because AI can do the same job for them but with maximum efficiency and without an extra cost.

What is the estimated lifespan of E-commerce?

With the E-commerce technology being fresh out of the oven, it is difficult for analysts and economists to be able to evaluate how long until the novelty of online shopping soon wears away. Currently, it is strongly argued that online shopping plays a role too large in the majority of the modern population, and as newer generations grow up using the concept, it would be hard for them to imagine a life without it.

Overall, this article has shed light on how the growth of E-commerce has and is benefiting the UK’s economy, but also some of the downsides of the matter and how it could negatively impact the UK’s economy.

The post office scandal By luiza & kitty What is the post office scandal?

Between 1999 and 2015, 736 post office workers (sub-postmasters and sub-postmistresses) were wrongly accused of theft, after a faulty computer system miscalculated the amount of money they were making in their individual post office branches. This computer system, introduced in 1999, was created by the tech company Fujitsu – it was called Horizon. Despite the fact that staff members raised concerns of inaccuracies in the system, the post office insisted that these errors could not have been caused by the system.

Over 700 workers were accused of stealing or losing money from the post office; they were forced to pay it back – some even went to prison!

Some of the imprisoned faced abuse and threats by those who believed they were thieves. This led to detrimental effects on people’s lives, many faced bankruptcy, marriages broke down and for some families, the immense pressure and stress on the workers resulted in disastrous health issues.

Twenty years later, campaigners won a legal battle to have the case reopened, however only 93 of the 736 convictions were reversed. It took a TV Drama, “Mr Bates vs The Post Office,” aired at the beginning of 2024 to inspire action on a problem ongoing for decades. The Post Office Minister Kevin Hollinrake stated,

“We are people ourselves of course.

We watch TV ourselves and see this stuff, and we and other people within the government realise this is a situation we’ve got to resolve.”

Who is responsible for paying those who are eligible for compensation?

Over 4000 people have been informed that they are eligible for compensation, the amount in which each sub-postmaster receives depends on their circumstance.

From the 1st December 2023, £138 million have been paid to 270,000 claimants across 3 different schemes: Horizon Shortfall Scheme (£87m), Group Litigation Order Scheme (£27m) and Overturned Conviction Scheme (£24m). Those who have had their convictions overturned can either take the fast tracked £600,000 settlement or enter negotiations if they believe they are entitled for more. The government has not provided an estimate for how much compensation will be paid out in total, but it will inevitably run into the hundreds of millions on top of what has already been paid.

Their bill keeps growing as the Post Office claims it cannot afford to pay, seeing as it is up to the government, who will unfortunately have to use the deep pockets of the taxpayers to make amends. The post office could be facing a bill of £100 million after claiming tax relief for its compensation payments to sub-postmasters.

Whether Fujitsu is wholly or partially liable for

some of this compensation, is the main question. The government will have to create a compelling case that the Fujitsu system is partially to blame for the scandal. Although they are held accountable for the miscalculations, they weren’t the ones prosecuting sub-postmasters. It was the Post Office who did that.

What is the future of the post office?

Until the start of the year, the post office had surpassed the BBC and the Bank of England as the UK’s most admired institution. Sandra Tizzard, the daughter of a sub-postmaster, has stated, “Running a Post Office is a labour of love as much as business.

You are a place for advice, for supplies, for tourist information and for whatever people need. And you are there for that section of people in our society who need that bit of extra help after technology has galloped on.” The Post Office has faced fierce scrutiny over the past few weeks after an ITV drama evoked furious reactions over the wrongful convictions of hundreds of postal staff.

The post office has been seen in a new light, where their façade that reflects innocence has been broken down to reveal secrecy and unreliability; who knows if the post office will ever gain back our trust.

rose harissa & mascarpone pasta

by Mrs Carr Ingredients:

Instructions

1 tablespoon of Olive oil 2-3 garlic cloves – crushed 1-2 large spoons of Rose Harissa – Belazu Rose Harissa 1-2 large spoons of Mascarpone 40-50g of grated parmesan – Waitrose and M&S do a Vegetarian Parmesan 100-150g – Baby Spinach 300g – Pasta

1. Boil the pasta for 8 minutes 2. In a large pan heat the oil and add the crushed garlic 3. Once the garlic starts to brown add the harissa, mascarpone, and grated parmesan. Mix it all together, it should turn into a thick sauce.

4. Add some of the pasta water into the sauce.

5. Add the spinach into the sauce.

6. Once the eight minutes cooking time has ended, drain the pasta, and add to the sauce.

7. Let all the spinach wilt and then serve.

Optional: grate extra Parmesan before serving.

Zhongzhi enterprise group, once a financial titan, succumbs to bankruptcy By vidhi & keisha On the 5th of January 2024, a major Chinese shadow bank, Zhongzhi Enterprise Group (ZEG), filed for bankruptcy, after citing an inability to meet its debts. The struggling group, known for lending billions to real estate firms, faced investigations for “suspected illegal crimes.”

ZEG’s liabilities of up to $64 billion allegedly surpassed its assets of around $38 billion.

regular banks, shadow banks are not subject to the same regulations and oversight. They are called “shadow” because they exist in the financial periphery, often engaging in riskier activities. Examples include hedge funds, investment firms, and certain types of money market funds. While they contribute to financial markets, their lack of regulation can pose risks to the overall economy.

What is a Shadow Bank?

China officials have launched an investigation into suspected illegal crimes against the firm in November.

ZEG saw the report and instantly declared it was insolvent, meaning they do not think it’s true and dismiss the matter.

A shadow bank is a financial institution that operates outside the traditional banking system but performs activities similar to banks, such as lending and investing. Unlike

The effect of ZEG’s bankruptcy: People have said that the fall of Zhongzhi Enterprise Group may have been bigger than the collapse of Evergrande. Meaning it is of great significance to China’s economy in the short and long run. This is due to the fact that China’s property sector makes up one third of its economic output. Which includes rental, house and brokering services. Not only that but it affects construction materials and industries to build houses. So, the supply of houses massively decreases.

Correspondingly, less goods are now being produced in China after the bankruptcy.

As a significant player in China’s shadow banking industry valued at $3 trillion, Zhongzhi Enterprise Group’s troubles add to concerns about the country’s economic stability. The collapse follows challenges in the property sector, with Evergrande’s downfall and financial issues at Country Garden contributing to anxieties in the world’s second-largest economy. The largest banks in China are stateowned. This makes it tougher for non-state-owned businesses to tap traditional banks for financing, which has helped spur a rise in shadow banking. Furthermore, the country’s massive property sector has also been caught in the middle of a crackdown on shadow banking which was used by real estate companies to purchase land from local governments.

Who is Britain's Best paid Boss?

By maryam & aamena Britain’s best paid boss is paid more than 8000 times more than the average UK worker. Her name is Denise Coates, the CEO of gambling company Bet365, and she was paid more than £260 million in the last financial year- regardless of a pay drop of £35 million from the previous year. Coates founded the British gambling company in a car park in 2000; she is now one of Britain’s richest women and among the best paid executives in the world.

Denise Coates was born on September 26, 1967, in Stoke on Trent, England. Her family had a history working in the betting industry; her father, Peter Coates, was a businessman and the chairman of Stoke City Football Club. She graduated with a first-class degree in Econometrics from the University of Sheffield and went on to start her career working in the betting shops owned by her father’s company.

Recognising the potential of online gambling, she decided to launch Bet365 from a portable building in a car park.

Under Denise Coates’ leadership, Bet365 rapidly grew to the top online gambling sites in the world, offering a variety of sports betting, casino games, poker, and other gaming products. Coates had a vision which she implemented swiftly, using her expertise in finance and accounting to drive the growth of the company.

The company’s creative approach to online gaming and dedication provided a user-friendly experience, and it has continued to grow and expand, now with a presence in over 150 countries. What once began as a company with only 12 employees has grown to a leading online gambling brand with over 90 million customers worldwide.

Coates has received countless nine figure salaries, having made more than £1.5 billion since 2016 which has naturally caused her to be among the UK’s

top taxpayers. This has caused some ethical concerns, with people questioning if making hundreds of millions of pounds from gamblers pockets is fair. MP’s have questioned how much of the company’s profits have come from China, where online gambling is prohibited, but the business continues to opt against a geographic breakdown of revenue as they say it would be “severely prejudicial to the interests of the group”.

However, company profits are beginning to plummet. Bet 365 reported a £61.2 million loss during its 2022-23 financial year despite an increase in sports betting and gaming revenue. This is in contrast to the £49.8 million profit they posted in the previous year. They have stated that the loss was due to an increase in costs, such as the £320m in extra administration costs which included spending on extra machinery and advertising in new markets.

So where is Bet365 going next?

Coates has said that their focus remains on expanding their presence in markets around the world, despite the fact that they offer services in over 150 countries worldwide and support 22 different languages.

Bet365 is a success story that is largely due to the spirit of its founder.

Coates saw an opportunity to thrive and she seized it, building a company worth billions from nothing.

Royal Mail Losing Market Share.

UK Parcel market by volume (% market share)

2020

2022

Royal mail Amazon Logistics Hermes/Evri DHL

royal mail? More like royal fail

UPS 0

5

10

15

20

25

30

35

The top 4 carriers in the UK (Royal Mail, Hermes, Amazon Logistics and DHL) account for 66% of parcel market share by volume, with UPS, Yodel and DPD each comprising of 6%.

By preesha & vida The Royal Mail, now in private hands since 2013, is experiencing a decline in market share compared to larger competitors. The industry operates as an oligopoly, an oligopoly is a market structure characterised by a small number of large firms dominating the industry, often resulting in limited competition. In this case, the top four carriers collectively hold a significant share of the parcel market, highlighting the oligopolistic nature of the sector. The top four carriers in the UK (Royal Mail, Evri, Amazon Logistics, and DHL) hold a 66% share of the parcel market by volume.

Despite this dominance, the market remains contestable, driven by both price and non-price competition from other players such as UPS, Yodel, and DPD. Economies of scale play a crucial role in this sector as they enable large corporations, such as Royal Mail, to reduce their costs, pass their savings onto consumers and gain an advantage over any competition.

Pitney Bowes reports that in the UK in 2022, a staggering 162 parcels were generated every second, totalling fourteen million each day. However, there was a 5% year-over-year

decline in parcel volume, dropping to 5.1 billion from the 2021 figures, partly attributed to the conclusion of pandemic lockdowns. On an individual level, parcels generated per person decreased to 75, and per household, the figure dropped from 192 in 2021 to 181 in 2022.

Royal Mail has faced a series of challenges in recent months, including fines for failing to meet delivery targets, the loss of an exclusivity deal with the Post Office, and operating losses of £319 million, exceeding the previous years by £100 million. While some challenges, such as the prolonged dispute over workers’ pay and declining letter volumes, have understandable explanations, others persist despite the resolution of the dispute in July and the absence of strikes since December 2022.

The root of Royal Mail’s ongoing difficulties can be traced, in large part, to a government-imposed obligation known as the ‘universal service obligation.’ This mandate requires the company to deliver to over 30 million UK premises six days a week and is regulated by Ofcom.

Despite consistent failure to meet delivery targets—93% for first-class mail within one working day and 98.5% for second-class mail within three working days—Royal Mail remains bound by this obligation.

In the fiscal year 2022-2023, Ofcom reported delivery levels of 73.7% and 90.7%, with only 89% of daily delivery routes completed.

Consequently, Royal Mail incurred a £5.6 million fine for breaching its obligations, in addition to a £1.5 million fine for a similar breach in 2018-2019.

As letter volumes continue to decline, with a nine percent reduction in the latest half-year results, Royal Mail faces increasing challenges in maintaining efficiency and profitability. The company’s recent leadership changes, including a new CEO from International Distributions Services, must address strained workforce relations, productivity gains, and heightened competition in the parcel delivery sector.

The decline in the letters business, exacerbated by the loss of exclusivity contracts and increased competition, remains a critical issue. The review

by Ofcom, expected later in 2024, will play a crucial role in determining whether the government and the regulator are willing to reconsider the stringent delivery targets imposed on Royal Mail, allowing for necessary adaptations in a rapidly changing postal landscape.

It is essential for Royal Mail to address the root causes of market share losses, adapt to changing market dynamics, and implement strategic initiatives to remain competitive in the evolving postal and parcel delivery industry.

If Royal Mail continues to lose market shares, it implies that the company is losing its portion of the overall business in the postal and parcel delivery sector. This can have significant financial repercussions, impacting the company’s revenue and profitability. The decline in market shares may result in operational

challenges, affecting the efficiency of its services and potentially leading to difficulties in meeting delivery targets. To address these issues, Royal Mail would likely need to reconsider its overall business strategy, including the types of services it offers and how it prices them, to stay competitive.

Shareholders, who are investors in the company, may become concerned about the declining value of their investments as the company’s market position weakens.

This could prompt scrutiny from investors and potentially lead to demands for changes in leadership or strategic direction. Additionally, if the company faces prolonged difficulties, it may need to implement cost-cutting measures, potentially resulting in job losses or changes in employment conditions for its workforce.

Furthermore, sustained market share losses can harm the company’s reputation and erode customer trust.

Customers may seek alternative providers if they perceive better service or value elsewhere, making it challenging for Royal Mail to regain their loyalty. Regulatory bodies may also increase scrutiny, potentially imposing stricter oversight or demanding improvements in service quality and compliance with industry standards. In essence, losing market shares necessitates strategic adjustments and initiative-taking measures to navigate the competitive landscape and maintain a strong position in the industry.

Alumnae Interview – Class of 1995

6. What is the most important aspect of A-levels?

A-levels are extremely important because they are your pathway to your degree course/university/ apprenticeship of choice and improve your job prospects.

However, they are also a really useful way to prepare you for the independent study needed at university and to develop skills, such as communication and analytical skills, required to enter the world of work.

sharmin pirbhai – self-employed Legal Content writer 1. What is your job description?

What does a typical working day entail?

I am a self-employed Legal Content Writer and produce blogs, create legal guides, as well as writing articles and client newsletters primarily for law firms and HR consultancy firms.

A typical working day starts with me checking in with clients as some give me the freedom to write about anything I feel is appropriate whereas others want specific content that is relevant to their firm’s focus. I also spend time reading the news and catching up on developments in the law, which is important for my job. Additionally, as part of business origination, I field enquiries from potential new clients.

I spend the rest of the day working on newsletters, short news pieces, longer articles and feature pieces on a range of issues and subjects.

I find my work interesting as I am always learning about new areas of law. For example, one of the pieces I am currently working on is an article on prenuptial agreements to tie in with Valentine’s Day!

2. What subject and where did you study for your undergraduate degree?

I studied law at Warwick University, after which I went on to qualify as a Solicitor, specialising in Employment Tax. 3. What advice would you give to someone aiming to earn a role in your industry?

If you are interested in law or writing (or both in my case!), the best thing is to get as much experience as possible. This helps you stand out from the crowd and demonstrates your commitment to your chosen career.

If writing or journalism is your thing, write for a school magazine or newsletter and contact local newspapers to see if you can do some work experience. With law, again, try and get an insight into the profession by doing a vacation scheme or asking to shadow a solicitor or barrister.

However, you will need to be persistent and not get put off by rejection – work experience placements are in high demand and you may need to make several attempts before you manage to secure something.

4. What is your opinion of the importance of economics as a whole?

An understanding of economics, for law, is important for a variety of reasons, for example, understanding economics helps lawyers to more fully understand the issues encountered in a variety of areas of law.

I also think Economics is fascinating as it affects all of us; virtually everything the government does relies on budgeting and therefore there is a balancing act between what it can raise as revenue via a variety of means and what it can spend. Economics can also help you understand global markets, economic policies and generally the world around us.

5. How did you cope with exam pressure and your university applications?

I can’t stress enough the importance of being organised when it comes to exam preparation and university applications. I always used to start revision early and get everything done in advance so that the night before an exam, I could chill and do something relaxing, like go to the cinema.

I accept this may not be for everyone and my children say that I must have been a nerd but it worked for me!

I do, however, recommend starting early and having a detailed revision plan as well as organising your day/week into chunks that give you enough time for study/university applications, social time, sports etc. However, be realistic about how much you can achieve in any one day and if it doesn’t go to plan one day, don’t beat yourself up about it and give up - just start afresh the next day.

7. Was there anything in particular that you prioritised to secure your position now?

Making good contacts and staying in touch with them. LinkedIn is a great way of doing this, especially for careers in Finance and Law. 8. What are the best and worst aspects of your current role?

I love working for myself and having the independence and flexibility that comes with it. I can go for a run in the middle of the working day and have time for other interests, such as my work as a governor at the school as well as other charitable work. I also enjoy combining my passion for writing with my interest and experience in Law and the fact that I am always learning something new.

However, a downside to being self-employed is that I don’t get paid time off for holidays or benefits such as private health care or pension contributions. If I am taking some time off or going on holiday, I still have the same monthly deadlines and must just work around my time off work, which can get stressful. Also, being self-employed means I have to fill out a tax return, which is tedious!

9. Favourite sandwich?

Falafel wrap with yoghurt and mint sauce 10. If there was one key tip you would give the students at WGGS, what would it be?

Cherish your time at WGGS because you will miss and appreciate your time here and your teachers more after you have left! Work hard but also make memories with your friends, try new experiences and embrace fresh challenges.

11. What are your career goals for the future?

To continue to expand my business and get more new clients on board. I may even return to practising Law once my youngest starts secondary school, at WGGS, later this year.

12. What are you currently watching on Netflix?

I am watching some comedy - Trevor Noah: Where Was I? Trevor Noah is a South African stand-up comedian and political commentator who is really funny.

We also saw him perform live recently at the 02 Centre and he was fantastic.

Why is germany's economy struggling?

vinted or minted?

By archita & vaibhavi Since late 2021 the UK has been experiencing a cost of living crisis and naturally this has resulted in people seeking alternative ways to generate additional income for a multitude of reasons. One way for people to gain profit is reselling old clothes and items they no longer need - which is where platforms such as eBay, Vinted and Depop, Etsy come into play. These online stores allow us to sell our used clothes, books and shoes.

Who uses these apps?

There are many different groups of people who use these second hand stores to sell their old clothes and books, such as university students to fund their extracurricular hobbies and personal activities or parents trying to get rid of their children’s old clothes. An important factor that needs to be considered by all people planning to sell on these websites is that taxes can affect you regardless of age - even under 18s.

What will this mean for sellers?

To begin with, what is tax? A direct tax is a compulsory financial charge on a person’s income or profits of the person who pays it, and is then collected by the government to fund public services and infrastructure.

Therefore, as the money earnt from sellers on Vinted and Ebay is their income, they pay a direct tax. The issue of taxation on the sale of preowned items has sparked heated debate online and on social media.

Many online posts have indicated that HMRC will be imposing a tax on people who use apps like Vinted and Depop to sell personal belongings.

However, HMRC, the government

By minnah & yumna department responsible for taxes, has made a statement disproving this “You do not need to pay income tax on selling your own personal items, such as used clothes, an old TV, or unwanted furniture.”

How do you know if you need to pay taxes?

When you are carrying out a trade which refers to purchasing clothes from charity shops with the intention of selling them for more than you paid, it is important to note that you will have to pay income tax if you make more than £1,000 annually on Vinted. This is not to say there are no taxes completely; even if you are not carrying out a trade: you may have to pay a capital gains tax - based on the profit made when you sell something that’s increased in value. For example, if you are planning on selling your old jacket worth £100 on Depop for £150 - you have made a profit of £50 - this £50 may be taxed.

Why should these apps be encouraged and incentivised?

These apps tend to focus on second hand items, which aligns with the growing trends of thrift shops and sustainability rather than contributing to the endless cycle of fast fashion - which until recently was regarded as the standard way of purchasing clothes. It is important that misinformation on social media does not cause speculation to raise prices on these online stores - which it can often do as people claim that all sellers will lose the “majority” of their revenues to tax. Often people from lower socio-economic backgrounds depend on the low prices of Depop and Vinted as charity shops have recently become more popular within

younger age groups, resulting in prices of secondhand items becoming unaffordable.

As a general rule, Ebay or Depop can be advantageous in making money: there is no set fee to pay in order to list your items and shipping labels are pre-paid. However, it’s important to be aware of the risk of scams. Across social media, people are discussing fears of the implementation of a tax on all personal items they sell, which may lead to some contemplating turning to alternative, shady apps.

The dangers may be that sellers may get scammed by “buyers” with very little protection offered on these less popular apps, or, in some cases, fall under the bracket of people carrying out tax evasion, a serious crime with financial penalties or even the risk of conviction.

What are the potential effects of this tax on the economy?

Envision yourself as a seller hearing speculations about HMRC imposing a tax on people selling items on Vinted or Depop, the money you make from each purchase would decrease as a small amount would be taken in as tax; you may be tempted to raise your prices, just in case. Alternatively, many sellers may not be incentivised to sell and instead are more willing to donate their clothes and accessories to charity shops instead. Many people will adjust their expectations and actually raise their prices, perhaps before the tax is even imposed.

Theoretically, if all the sellers raised their prices, this could result in cost push inflationary pressures on the UK economy, which, combined with other factors could lead to inflation in prices.

Germany, the so-called powerhouse of Europe, has gradually deteriorated.

The International Monetary Fund predicts Germany will be the only G7 economy that shrinks in 2023, and a 0.9% growth is expected to remain well below the average of 1.4% for advanced economies in 2024.

The effect of the current German economy is that farmers are launching nationwide protests against the government plans to cut diesel subsidies. Chancellor Olaf Scholz’s coalition has decreased the number of proposals coming in and has hastily reworked the budget to cut diesel subsidies. However, the president of the German Farmers’ Association stated this did not go far enough and kept his plans for nationwide rallies this week. The truce declared by the GDL train drivers’ union ended on Monday; the GDL are also planning a strike that will last for a couple days for the change in wages. Deutsche Bahn (the national railway company of Germany) presented a new offer on Friday which it hopes will resolve the dispute, but it also seeks an injunction to stop the industrial action. The GDL are currently deciding and analysing this current offer.

Furthermore, in more detail the GDL train drivers’ union announced strikes in a bid to push through higher wages and shorter working hours. Union members striked between 2 a.m. local time last week on January 10th through to 6 p.m. on January 12th at the passenger operations. Strikes at the cargo operations started at 6 p.m. on January 9th, the previous day before the passenger operation striked occurred. The GDL union announced in December that they planned a strike that would last several days after the Christmas holiday season. “The DB Group has not used the Christmas truce to

counteract industrial action with a negotiable offer,” GDL said. In addition to shorter working hours, GDL is also looking for a pay rise of €555 (around £476) per month and an inflation reimbursement bonus for its employees. The Deutsche Bahn has bluntly declined the demand for a reduction in working hours due to a shortage of labour. However, it instead offered an 11% increase in wages and salaries for a collective agreement term of 32 months.

Additionally, another reason why the German economy is struggling is because of the long-term problems surrounding its workforce. Germany, like other industrialised countries around the world, is facing deep labour shortages, particularly in skilled high-growth sectors. Official estimates suggest Germany’s ageing society will be short of 7 million skilled workers by 2035.

To fix this issue, the government aims to encourage immigration from countries form outside the EU. Despite the reform of immigration and citizenship laws in 2023, experts caution that progress may be slow.

Red tape and lack of investment are two major problems

of the German economy which are slowing down the energy transition and the roll-out of high-speed internet connections. Germany aims to cut its greenhouse emissions by 65% by 2030 compared with 1990, a step to becoming carbon neutral by 2045. Meeting 2030 CO2 targets needs government financing, which has become significantly tighter after the court ruling cancelled 60 billion euros of unused debt earmarked for climate projects.

Another problem that is causing the German economy to decline is the trading sector. The German economy is highly trade-oriented which weakens foreign demand.

Weak global growth as well as high interest rates, are expected to make German exports look more expensive to foreign countries. Shipping disruptions in the Red Sea and escalating tension in the Middle East could further cloud the trade outlook.

The global head of macroeconomics at ING, Carsten Brzeski, said, “Like the rest of the German economy, exports remain stuck in the twilight zone between recession and stagnation,”.

There are several reasons as to why Germany’s economy is slowly declining. This will have a lot of negative impacts on the people living there as their wages are decreasing and jobs are being lost. Let’s hope this does not continue in 2024!

The general election By maryam & nadia 2024: The year of the global election 2024 is the biggest election in human history with more than 75 countries holding national and regional elections including eight of the ten most populous countries (e.g. India, the United States, the EU, Indonesia, Brazil, and South Korea). Bloomberg Economics calculates that voters in countries holding elections represent 42% of the world’s Gross Domestic Product.

When is the next general election due?

General elections in the UK must be held no more than five years apart. The latest a Parliament can be dissolved - the official closing term for closing Parliament ahead of a general election - is on the fifth anniversary of the day it first met.

This takes us to 17 December 2024.

However, 25 working days are then allowed to prepare for the election, meaning that the next election must take place by 28 January 2025 at the latest.

The date is generally chosen by the prime minister, who has the power to call a general election at a time of his choosing. Indeed, Prime Ministers will usually select an earlier date to coincide with when they think they

are most likely to win. The PM will, nevertheless, still have to comply with formalities and ask the King to dissolve Parliament. At this point, MPs lose their status and have to campaign for re-election.

When will the next UK general election be and what influence will this have on the PM’s choice?

There has been much speculation recently about when the Prime Minister will choose to call a general election, with many believing that he would call one in May to coincide with the local elections. Rishi Sunak, however, has recently indicated that it’s his “working assumption” that it will happen in the second half of the year, suggesting that we may still have some time to wait.

Which political parties are likely to run in the general election?

Conservative Party: A centre-right party that traditionally supports free-market policies and is currently in government. The current leader is Rishi Sunak. In the October 2023 Party Conference, Sunak spoke about numerous concerns and targets he is planning to bring. He referenced that Jeremy Hunt [Chancellor of the

Exchequer] should target pounds not people in his civil service savings, as there was news that the Chancellor aims to reduce the number of civil servants by 66,000, bringing staff numbers back to pre-pandemic levels.

Also, Sunak wants to strengthen the Government’s relationships with business, which was previously damaged by Truss, and announced a review of regulators to cut red tape and bureaucracy and many other targets which are spoken about on the Conservative Party website.

Davey proposed a fair deal which included many targets such as investment in infrastructure, aid with cost of living, uphold fiscal responsibilities etc. They also wanted to enhance powers on community assets, give local authorities a key role to cut emissions in their area, oppose the SNP’s referendum and independence and many more goals to do with climate change, housing and farming which can all be found on the Liberal Democrat Party website.

Labour Party: A centre-left party that traditionally represents the working-class and has been one of the major political parties in the UK. The current leader is Keir Starmer. In the October 2023 Party Conference, Starmer’s speech was big on vision but the bridge between where the country is now and how Labour will move forward with it was harder to discern. He spoke about his promise to deliver a decade of national renewal, how to achieve clean energy missions, small mentions on tackling Brexit and other aims which are referenced on the Labour Party website.

Green Party: There are two Green parties in the UK: the Green Party of England and Wales, and the Scottish Green Party. They focus on environmental issues and social justice. The current leaders are Carla Denyer and Adrian Ramsay.

Liberal Democrats: A centrist party advocating for civil liberties, social justice, and electoral reform. The current leader is Ed Davey. In the Autumn 2023 Party Conference,

There are other ‘minor’ parties in the UK such as SNP, UKIP, DUP, Plaid Cymru and Sinn Féin, however they have statistically not achieved as well in England then they have in other parts of the UK during election season.

How important are economic factors in an election?

Research shows that economic matters are generally the most or one of the most important factors that voters consider at the time of an election.

Incumbent governments tend to do worse in elections when the economy is doing badly or has recently suffered a shock. Given that the Conservatives are currently trailing Labour by around 20 points - at the time this article was written - in the polls, and the economy generally being sluggish post Brexit and Covid it is likely that Sunak will try and delay calling for a general election until much later this year. This enables the Tories to look to implement policies that maximise the chance for economic recovery and allow the party to try and regain their reputation for stability and economic competence. The National Institute of Economic and Social Research has said it would take until the third quarter of 2024 for UK output to return to its pre-pandemic peak. Furthermore economists do expect inflation to continue to fall towards the Bank of England’s target in 2024 and wages to rise in real terms, especially for low earners. This will be aided by the increase in the

National Minimum Wage that is due to come into play from April. So there is some advantage in the PM waiting it out for the economy to improve.

Additionally, Chancellor Jeremy Hunt has already announced in his Autumn Statement that millions of workers will be receiving a National Insurance tax cut from January this year. Sunak has also dangled the prospect of more tax cuts later this year. This also suggests that an autumn election is likely as these tax cuts will take time to filter through, allowing the voters to go to the polls, feeling the benefits of these savings.

Nonetheless, estimating elections to be around May to the end of the year is still likely as looking at a legal standpoint, under current legislature [Dissolution and Calling of Parliament Act 2022] it states that the latest date the UK can go to the polls is January 2025. According to the act, should an election not be called by December 17, 2024, Parliament would automatically dissolve, as it would be exactly five years since the last general election in 2019. This means Rishi Sunak does not have long to prepare his party, gain popularity from the electorate and other parties now must gather their manifestos, engage with the public and try to win to be the next leader of the UK. Who do you think will win?

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