The NIESR blog is a forum for Institute research staff to provide an informed, independent view on current economic issues and recent NIESR research. The views expressed here are those of the authors, and are not necessarily those of the Institute.
Will mass unemployment overshadow the U.K. outlook or will we be struck by the resilience in employment following a severe, yet short-lived, recession? Using the Beveridge curve to construct a baseline points to the unemployment rate rising sharply from 4% to 10% as the UK’s Covid-19 Job Retention Scheme (CJRS) unwinds in the second half of the year.
The CPILW for May 2020 is 1.1%, a slight fall from 1.2% in April. It is 0.4% above the official CPIH and indicates that the official inflation measure CPIH understates inflation.
Slavery was and is a pathology of economics. Our long-standing failure to reflect that has caused us to mishandle our foundational concept of “an economic agent”. Correcting that will not only secure the integrity of our discipline at its core but is also essential to for us to grasp exactly what is at stake in the earthquake now unfolding in the United States—and its global implications—after the murder of George Floyd, and to ponder what is to be done about it.
The government has introduced a number of new policy initiatives offering financial support to those who lost their jobs during the crisis. However, the policies have been costly, not comprehensive, and financed in a way that is both unfair and endangering the prospects of post-crisis recovery. An alternative plan is proposed.
Expected impacts from the disruption to children’s education as a result of the Covid-19 crisis have been a recurrent theme since the start of lockdown, particularly for children from more disadvantaged backgrounds. Children in Reception and Year 1 are among the first being encouraged to return to school from 1 June. At the same time, early years and childcare settings are also being asked to welcome more children back. This focus on getting the youngest back to educational settings acknowledges the critical importance of learning in the early years for future outcomes.
During this crisis, central government has provided unprecedented levels of financial support for employers, employees and self-employed workers.
The economic downturn in the wake of Covid-19 means forecasters must navigate a totally different economic landscape. But by organising thoughts about possible future scenarios, forecasts can help governments identify policies to bridge from today to a new future
The ONS intends to alter the way it computes the CPIH index in response to the CV19 Lockdown and social distancing (ONS 2020). Partly this has to do with the collection of prices: partly with the calculation itself. Indeed in yesterday’s published minutes of the MPC, the problems of the scope of collection and the availability of certain price series was highlighted.
Massive changes in monetary policy in the United States and the United Kingdom have occurred since the middle of March, when the seriousness of the coronavirus epidemic was becoming apparent. The changes have not been fully explained by either central bank, let alone justified.
The world is undergoing an unprecedented shock as a result of the Covid-19 pandemic and the widespread lockdowns. As major world economies are being put on hold, millions of jobs and incomes are being lost, which has created an imperative for economic policy actions to counteract the falls in demand and increased market uncertainty.
In the wake of Covid-19 related nursery and school closures, the quality of the home learning environment is more important than ever. We know that very young children depend on high quality interaction to support their cognitive, language, social and emotional development and the current crisis only serves to emphasise the need for good quality programmes that support families in providing the best start for their children.
I propose a universal freeze on balance sheets. This would be similar to a debt standstill but here applied to all obligations including rents and pension contributions. For struggling firms, the policy will take the form of temporary cessation of activities that could have legal status and allow them to continue at the end of the period of lockdown.
A big, targeted, immediate, global ﬁscal response is needed to minimize the macroeconomic fallout worldwide.
A cacophony of economists is now calling for “whatever it takes” on the fiscal because, notwithstanding the many steps to be taken on the monetary and financial sides, the core of the macroeconomic policy response to the pandemic has to be fiscal.
But exactly how much, when, how, how long, by whom? are not just “details, dear boy, details”. Absent specifics, such calls are mere grandstanding. It is time to get specific.
Expectations are high for the upcoming Budget to deliver on a number of ambitious promises – from ‘levelling up’ the UK economy to raising long-term growth and improving public services. After more than a decade of dismal pay growth – real-term earnings have only last month returned to levels last reached in 2008 – British workers may wonder whether the Budget will help improve pay.
The votes have been counted and the results are in and we now know that the Conservatives will lead an administration with a mandate strong enough to last for a whole Parliamentary term. The deep question though is whether they can get the economy moving beyond its Brexit impasse and out of the doldrums, in which it has been stuck since the financial crisis. During the campaign we saw the consequences of the Brexit impasse across a raft of policy areas.
The UK minimum wage has been a great success story since its introduction in 1999. Twenty years on, it is at risk of becoming overly politicised in a growing arms race between the two main parties, both eager to claim the credit for boosting the earnings of millions of low-paid workers across Britain.
This piece was first published by Prospect here
The 2019 election campaign is drawing to a close, but rather surprisingly, immigration has fallen the radar during the past month, overshadowed by the broader Brexit process, anti-Semitism, calls for the Prime Minister to be interviewed by Andrew Neil and so on.
Given the febrile nature of the debate over Brexit in the run-up to one of the most contentious general elections in recent memory, it is hardly surprising that NIESR’s well received and widely-accepted analysis of the impact on the UK economy and people’s livelihoods of leaving the European Union has been criticised in some quarters.
Brexit will require the UK to change its international trading relations. New norms will need to be established both for trade with continental Europe and other trading partners. New partnerships will need to be established. The UK may no longer remain a member the European Customs Union and the Single Market and may not be able to rely on trading arrangements that have been built up through membership of the Union or Single Market. The gravitational pull of the European market will remain.
The impact of Brexit on the UK economy has been analysed in much detail and NIESR has contributed various model-based analyses (Pain and Young 2004; Ebell, Hurst and Warren 2016; Hantzsche, Kara and Young 2018). Less well understood are implications for the rest of Europe and beyond. This blog post reviews the existing evidence and provides new estimates of the global impact of Brexit.