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Home > Wednesday Wisdoms: Newsletter > The silent productivity killer you've never heard of...

Welcome to the 21st edition of Wednesday Wisdoms by EdGenie!

Every Wednesday I send out actionable tips, tricks and real-world application insights from my 13-year experience coaching students to achieve As and A* in their Economics and Business A Levels.

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The silent productivity killer you've never heard of...

The silent productivity killer you've never heard of...

Attention Residue (and 3 strategies to fight back):
The concept of "attention residue" was first identified by University of Washington business professor Dr. Sophie Leroy in 2009.

The idea is quite simple:
There is a cognitive cost to shifting your attention from one task to another. When our attention is shifted, there is a "residue" that remains in the brain and impairs our cognitive performance on the new task.

Put differently, you may think your attention has fully shifted to the next task, but your brain has a lag—it thinks otherwise!

You've likely experienced it:

  • Jumping from a Snapchat or Whatsapp to EdGenie leaves your brain lagging behind.
  • A quick Sidemen video during a study session disrupts your flow.
  • That 'quick' scroll through TikTok makes the next hour of revision fuzzy.

Here's what you need to know:

  1. The Size of the Switch Doesn't Matter: Whether it's a significant task switch or a minor one, the cognitive cost is there. 🔄
  2. The Remote/Hybrid Challenge: Our digital world, with all its freedoms, amplifies this challenge, making it harder to maintain focus. 🌐🧠

And for those who think they can multitask effectively, the research disagrees:

Each time you switch tasks, your brain's performance dips. 🚫🧑‍💼
Here's How You Can Fight Back:
1.Dedicated Study Sprints: 🔒🕒
  • Create focus blocs, 45-90 minutes each, dedicated to just one subject or topic.
  • Close all tabs and apps unrelated to your task. Silence the phone. Just study.
2. Breathing Room: 🌬️
  • Schedule your revision sessions with 5-15 minute breaks in between.
  • Use these breaks to step away, breathe, and reset your mind.
3. Batch Your Distractions: 📬✅
  • Allocate specific times for gaming, messages, and any other communications.
  • Tackle them in one go, then return to your studies with a clear head.

By tackling attention residue, you'll enhance the quality and efficiency of your work.

Implement these strategies, and you'll notice an immediate positive impact on your studies and overall productivity.

UK insolvencies rising due to high interest rates, says Begbies Traynor​


📈 Rising Insolvencies Amid Higher Interest Rates: Begbies Traynor notes an uptick in company insolvencies as UK interest rates climb from 0.1% to 5.25%.

💷 Increased Borrowing Costs: The Bank of England's interest rate hikes have significantly raised borrowing costs, leading to financial stress and preventing businesses from relying on cheap debt.

🏦 Impact of Economic Slowdown: With reduced spending due to higher interest rates, indebted companies face limited options for recovery.

🔍 Insolvency Growth Observed: Revenues from insolvencies at Begbies Traynor have increased by 17%, indicating rising corporate distress levels.

📉 Subdued Economic Growth Projections: Professional economists predict the UK's GDP to grow by just 0.5% in 2024, reflecting continued weak performance post-2008 financial crisis.

📊 Surge in Liquidations and Administrations: The Insolvency Service reports a 17% rise in corporate insolvencies to 24,326 cases, with a significant number from smaller companies through liquidations.

🛠️ Preparation for Demand in Insolvency Services: In anticipation of further insolvency cases, Begbies Traynor has increased its staff by 12%.

💼 Advisory Business Resilience: The financial advisory sector of Begbies Traynor remains robust as more firms seek refinancing and restructuring amidst a downturn in investment activities.

A Level Economics Questions:

Q: How do higher interest rates affect corporate solvency in the UK?
​A: Higher interest rates increase the cost of borrowing for companies, which can strain their cash flow and profitability. This makes it more difficult for businesses to service their debt, potentially leading to an increase in insolvency, as evidenced by the 17% rise in revenues from insolvencies reported by Begbies Traynor.

Q:  What are the implications of reduced consumer spending on indebted companies in the UK?
A: Reduced consumer spending can lead to lower sales and revenues for companies, particularly those with high levels of debt. With less income, these companies may struggle to meet their financial obligations, which can increase the likelihood of insolvency if they cannot adapt to the tighter financial conditions.

Q:  Assess the impact of the current interest rate and inflation environment on the UK insolvency sector.
A: The current high-interest rate and inflation environment have led to increased corporate distress, benefiting insolvency practitioners like Begbies Traynor. These firms experience higher demand for their services, as more companies require assistance with insolvency proceedings, refinancing, or restructuring.

Q:  Discuss the potential consequences of a 0.5% GDP growth forecast for the UK economy in 2024.
A: A 0.5% GDP growth forecast for 2024 indicates a sluggish economy, likely leading to lower business confidence and investment. While it suggests the UK may avoid a recession, such slow growth is inadequate to recover to the 2% annual growth average before the 2008 financial crisis, potentially resulting in long-term economic stagnation and increased financial pressure on businesses and public finances.

Possible A Level Economics 25 Marker Question

Evaluate the impact of the Bank of England's decision to raise interest rates from 0.1% to 5.25% on UK businesses' borrowing costs and the wider economy, including the implications for corporate insolvency rates.

Infographic of the Week

Interest Rate Trajectories: Navigating Through Economic Uncertainty

In response to persistent inflation, central banks across major economies have increased interest rates, with the EU, UK, and U.S. seeing hikes of at least 4 percentage points since 2022. The IMF forecasts that these rates will peak in early 2024, with the U.S. Federal Reserve expected to hit around 5.4% before rate cuts commence in Q3 2024. In contrast, Japan has maintained rates at or below zero since 2016 due to its long-term struggle with weak consumer demand, despite recent inflationary pressures and a falling yen. Looking ahead, the IMF predicts that Japan will witness its first interest rate rise in nine years by 2025. However, these projected rate adjustments remain contingent on the deceleration of inflation and could be influenced by major global events that impact economic conditions and policy decisions.

Chart of the Week

UK's Public Debt Surge: From Financial Crisis to Fiscal Future

Since the financial crisis of 2008, the UK's public debt has witnessed an unprecedented surge, escalating from £0.6 trillion to a forecasted £3.1 trillion by March 2029. The post-crisis years saw government borrowing reach £0.7 trillion, doubling the net debt by March 2012. Despite austerity measures, by March 2020, an additional £0.5 trillion had been borrowed. Pandemic and energy crisis spending are expected to add £0.9 trillion by 2024, with Autumn Statement 2023 outlining £0.4 trillion more in borrowing for the next five years. Commentators speculate that the projected spending cuts may be unattainable, potentially leading to further borrowing unless taxes increase. While the net debt to GDP ratio has spiked, from 35.6% in 2008 to an expected 97.9% in 2024, it's forecasted to decrease slightly to 94.1% by 2029, assuming economic stability prevails without new recessions or crises.

Macroeconomic Data

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