Fiscal policy· Macroeconomic policy The Treasury and Bank of England should prepare for a three-pronged economic shock from ‘no deal’ 1 October 2019 by Jack Leslie It’s a well-worn trope that no one knows what the economic impact of a no deal Brexit would be. And for good reason. The scale of disruption at the border, in supply chains and in the wider economy, is impossible to predict with any accuracy. Much would depend on the timing and the success of … Continued READ MORE
Labour market· Pay The labour market is delivering on jobs and pay – it is vital for living standards that we keep it that way 10 September 2019 by Nye Cominetti A tight labour market is finally delivering decent pay growth. In the three months to July 2019, average weekly regular pay (i.e. excluding bonuses) grew by 1.9 per cent on the previous year (slightly down on the previous month). Given that average real pay grew by 2.1 per cent in the eight years prior to … Continued READ MORE
Macroeconomic policy Is the UK recession ready? 9 September 2019 by Torsten Bell The good news is we’ve now managed a recession free decade since the financial crisis. The bad news is that history teaches us this is quite unusual – booms and bust haven’t been abolished. This matters – downturns have very high costs, even when they’re not of the global financial crisis earth-shattering sort. On average … Continued READ MORE
Living standards· Prices & consumption· Brexit & trade· Tax After Brexit the UK could cut VAT on energy – but should it? 2 September 2019 by Adam Corlett During the EU referendum, one of Vote Leave’s promises was that “fuel bills will be lower for everyone”. Specifically, Boris Johnson and others argued that: “In 1993, VAT on household energy bills was imposed. This makes gas and electricity much more expensive. EU rules mean we cannot take VAT off those bills. The least wealthy … Continued READ MORE
Labour market· Skills What do the latest apprenticeship figures tell us? 2 September 2019 by Kathleen Henehan and Jubair Ahmed This August, as always, brought a host of headlines on academic results: from A level triumphs to parents’ confusion with the new(ish) GCSE marking system. Rather less attention, as always, was paid to students who pursued qualifications and pathways outside the traditional GCSE-to-A level-to-university route. For instance, apprenticeships, where young people can – in theory … Continued READ MORE
Pay How to get a pay rise 19 August 2019 by Nye Cominetti How do you get a pay rise? You could try to wrangle more out of your employer with canny negotiating tactics. That may help. But it’s not how the majority of us see our pay rise – and occasionally fall – over time. In practice, other factors are likely to be more important. Some of … Continued READ MORE
Economic growth Is there any economics behind Johnson’s ‘perk up and carry on’ strategy? 15 August 2019 by Torsten Bell It’s time to get with the perk… I mean programme. Boris Johnson’s government might not even have a Budget under its belt, but its economic strategy is taking shape. It’s time to abolish the gloomsters. And the doomsters. As he said on entering Downing Street, “after three years of unfounded self-doubt it is time to … Continued READ MORE
Labour market· Low pay· Pay Is the minimum wage pushing people into self-employment? 29 July 2019 by Nye Cominetti Two big changes in the labour market over the past two decades have been the rise in self-employment and the introduction and uprating of the minimum wage. Is there a connection between these trends? Legally, of course, there is no connection – the minimum wage applies to employees only. But economically, we would expect one. … Continued READ MORE
Leading Britain through Brexit: Five lessons for Boris Johnson 24 July 2019 by Torsten Bell When the history books of our era are written they will say that Britain had a huge financial crisis, then it left the EU. In those books Boris Johnson’s legacy as Prime Minister will be Brexit – and the politics and economics of Brexit are hard. Hard substantively, because they involve unravelling 40 years of … Continued READ MORE
Fiscal policy· Public spending· Economy and public finances· Macroeconomic policy Another summer blockbuster (on fiscal risks) from the OBR 18 July 2019 by Richard Hughes Today the OBR published its second Fiscal Risks Report, a comprehensive assessment of all the things that could go wrong with the UK’s public finances over the next 50 years. And it is a summer blockbuster – topping out at 293 pages in total. Fiscal risk analysis is the new cutting edge in fiscal policymaking, … Continued READ MORE
Labour market· Pay· Intergenerational Centre It’s getting better all the time? 5 July 2019 by Stephen Clarke In 1957 the Prime Minister Harold Macmillan told the country that it had “never had it so good”. Since then more than six decades have elapsed, and each successive generation has debated whether this applies to them. Such debates continue to rage. Some commentators have argued that today’s young people are more fortunate than previous … Continued READ MORE
Intergenerational Centre War and peace – David Willetts reviews two of the latest books on Intergenerational equity for the Financial Times 3 July 2019 by David Willetts Class used to predict how people would vote in Britain and elsewhere — in 1974 if you were a member of the working class you were three times more likely to vote Labour than Conservative. Now the distribution of votes by class in the UK is almost even between Labour and Conservative: the new divide … Continued READ MORE
Wealth & assets· Housing Who owns Britain’s £13tn wealth? 2 July 2019 by George Bangham Britain is in the middle of a decades-long wealth boom. Total wealth now stands at a record £12.8tn, or almost 13 million millions. But where you live, and when you were born plays a big part in how much of that wealth you are likely to own. In the 1960s and 1970s, Britain’s collective wealth … Continued READ MORE
Living standards· Childcare· Scotland· Welfare A welcome boost for ‘just about managing’ families in Scotland 27 June 2019 by Adam Corlett Yesterday started with a bleak assessment by the Child Poverty Action Group of the impact of ongoing welfare cuts – specifically how the two-child limit on support, which began to be implemented in 2017, is set to push 300,000 children into poverty. But there was better news for Scottish parents later in the day, as … Continued READ MORE
Prices & consumption· Intergenerational Centre Life as a millennial is far less extravagant than you might think 20 June 2019 by Laura Gardiner When economists and policy makers talk about living standards they think in terms of real (equivalised) household disposable incomes (before or after housing costs). This is a good approach to take, but it’s not how most people think. A more common way is to think about how much money you have to spend on goods … Continued READ MORE
Labour market· Productivity & industrial strategy· Pay Two and a half reasons to be cheerful about our strong and stable labour market 11 June 2019 by Nye Cominetti Today’s labour market statistics were, to use a technical term, boring. In a world of high political and economic drama, our labour market has served up headline measures of real pay growth and employment which basically haven’t changed for four months in a row. We shouldn’t bemoan unchanging numbers. Like air travel and digging tunnels, … Continued READ MORE
Incomes· Tax· Political parties and elections Tax cuts for the rich is not the answer to the questions 21st century Britain is asking 10 June 2019 by Torsten Bell Politics is about answering the question the country is asking at that time, and in that place. Context matters. This fact seems to have escaped the notice of a number of candidates in the rather crowded field to be the next Conservative leader, judging by the single focus of many of their big ideas: massive … Continued READ MORE
Labour market· Housing· Intergenerational Centre Britain has become a less mobile nation – why? 6 June 2019 by Torsten Bell Donald Trump tells us there are no protesters. He says it so often, he probably believes it. Which is worrying, but also fairly normal. There are stories we hear so often that we simply assume they are true. Here’s one. Our communities are changing ever faster as more and more people move around for work, … Continued READ MORE
Labour market· Housing· Intergenerational Centre Young people are no longer footloose and fancy free – and rent rises are to blame 6 June 2019 by Lindsay Judge Millennials, eh? They never stand still. Always on the move, with their ‘portfolio careers’, side hustles in the gig economy, and no loyalty to the companies they work for. With an attitude like that, it’s no wonder they struggle to find decent work and pay. There’s only one problem with this common trope though. It’s … Continued READ MORE
Labour market Union membership is rising again – but will it last? 31 May 2019 by Daniel Tomlinson In 2018 the Trades Union Congress (TUC) celebrated its 150th birthday. Yesterday the government delivered a somewhat belated birthday present to the union movement in the form of new statistics showing that membership levels have risen significantly for the first time in almost two decades. Happy birthday TUC! In this short blog post, we provide … Continued READ MORE
Labour market· Low pay· Pay· Living Wage Britain can afford an even higher minimum wage – but we need to tread carefully 30 May 2019 by Nye Cominetti Britain has long had a low pay problem. For most of the last two decades around one in five workers has been in low-paid work – earning less than two-thirds of the typical hourly pay – at any given time. This is a massive problem given how hard it can be to escape low pay. … Continued READ MORE
Labour market· Pay· Intergenerational Centre Wrong time, wrong place – leaving education in the middle of a downturn 13 May 2019 by David Willetts Modern economies are supposed to deliver improving living standards – incrementally year-on-year, with big gains decade-on-decade. That is why it is so shocking that a 30-year-old today earns no more than a 30-year-old a decade ago, according to previous research by the Resolution Foundation’s Intergenerational Commission. This is an earnings freeze on a scale unprecedented … Continued READ MORE
Labour market· Pay· Intergenerational Centre Coming of age during a downturn can cause scarring – and it takes up to a decade to heal 13 May 2019 by Stephen Clarke Recessions are bad for people’s standard of living. And they’re particularly bad for young people. That’s the painful lesson we learnt after the 1980s recession where, for most of that decade, at least one in seven people under 30 were unemployed. We know a lot about the unemployment scarring of the 1980s – from the … Continued READ MORE
Firms· Labour market· Productivity & industrial strategy The word on the high street 18 April 2019 by Daniel Tomlinson The way we shop in the UK has changed dramatically in just the space of a decade. In 2008 less than five per cent of retail spending was online, and that share has almost quadrupled in the years since. The latest statistics published just this morning show that in March this year almost a fifth … Continued READ MORE
Labour market· Pay Real wage growth has finally returned to pre-referendum levels 16 April 2019 by Charlie McCurdy Today’s labour market stats has bought good news in terms of both jobs and pay. Employment remains at a record high and unemployment at a 40 year low. But what really stands out in today’s figures is real wage growth. This has finally returned to pre-referendum levels providing a long awaited boost to real earnings … Continued READ MORE
