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.
I still seem to have difficulty getting across the very simple point that the historically low level of long-term interest rates in the UK (gilt yields) reflects primarily protracted economic weakness rather than, as the government persists in asserting, confidence in the government's economic strategy. Maybe this chart will do the trick:
Last week representatives of the European Commission came to see me and colleagues at NIESR to discuss the economic prospects for the UK. We had a sensible discussion, during which time I expressed my view that slowing fiscal consolidation would boost growth and employment without posing any significant risk to fiscal credibility, and that in this respect the Budget was a missed opportunity.
I appeared before the Treasury Committee today to discuss the Budget. As usual, we were asked about the government's macroeconomic strategy, and the case for a change of course.
NIESR's response to the Budget, and commentary on the OBR's forecasts, is here.
The announcement that the government is considering "privatising" the national road network is potentially an important step that could deliver major economic and environmental benefits - benefits that go well beyond any benefit to the public finances. But whether those benefits are realised depends crucially on how "privatisation" actually works.
[Updated April 2]
Fitch have now followed Moody's in putting the UK's credit rating on negative watch, with just as little excuse. This may be perceived as somewhat embarrassing for the government, coming as it does immediately after the Chancellor announced plans to take advantage of "market confidence" in the UK to issue a 100 year bond or even a perpetual gilt.
[This article was published on March 14th on the Guardian's Comment is Free.]
[updated 8am 14 March with additional section on QE, at end]
According to the FT (£) the Chancellor plans to issue an “Osborne bond” – a 100-year debt issue or even a perpetual gilt that never matures – to "to lock in the benefits of Britain’s low borrowing costs, which he claims reflect market confidence in his fiscal plans."
One of the best things about working on social policy in the UK is the depth and richness of the data, especially survey, data, that we have about British society. We may lack the comprehensive population register of, say, Sweden, but to compensate we have what I suspect is an unparalleled variety of topic-specific social surveys, from the British Crime Survey to the Workplace and Employment Relations Survey.
Last week I wrote here that the debate on work experience seemed almost entirely divorced from the evidence of whether work experience actually improved the employment opportunities of jobless young people. I pointed out that, when Iain Duncan Smith and Chris Grayling argue that around half of those on the scheme leave benefits within 13 weeks, this in itself tells us nothing about the success of the programme, since many would have left benefits without the scheme.
FT education correspondent and part-time data nerd Chris Cook published a fascinating analysis of the Oxford admission process here. The point was to explain why pupils in state schools - especially, of course, those in poor areas - are far less likely than independent school pupils to gain admission to Oxford. It did this by breaking down the disparity in actual admission probabilities into three stages of the process:
Today's migration figures show that long term international migration to the UK remains at historically high levels. Even for those who, like most mainstream economists, think that the evidence is pretty strong that immigration generally has a positive impact on the UK economy, it is reasonable to ask what the impact of the resulting rapid demographic change will be on public services; in particular education, where the impa
[Updated 22/2 at 8pm with new analysis and chart from Inclusion].
How would you describe an unemployed single mother, with moderate depression, who can't afford new shoes for her children, and whose roof is leaking? The Prime Minister calls her a "neighbour from hell", and argues that she, and people like her, are part of a "culture of disruption and irresponsibility."