Blog: July 2020
The Covid-19 pandemic and extraordinary measures put in place to contain the spread of the virus have delivered a dramatic shock to the world economy. As the stringency of global lockdown measures gradually ease, an understanding of the short-term economic consequences of these measures is beginning to emerge.
Statistical agencies such as the Office for National Statistics (ONS) are responsible for collecting data on the prices of goods and services that we consumers purchase in order to calculate inflation. The ONS creates a representative ‘basket of goods’ that include the goods and services that households buy and consume most often. Historically, the prices for these goods and services would then be collected by dedicated price collectors each month, allowing the ONS to calculate the average price change between subsequent months.
Covid-19 and Brexit show that high speed internet is essential for growth
The CPILW for June 2020 is 1.1%, unchanged from 1.1% in May. This is 0.3% above the official CPIH of 0.8% and indicates that the official inflation measure CPIH understates inflation.
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.