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.
Last week, Chancellor Sajid Javid announced a fast-tracked one-year spending round to pin down expenditure limits for government departments in the 2020-21 fiscal year. According to his announcements, the round will account for spending commitments made by the Prime Minister since he came to office while continuing “to keep borrowing under control and debt falling by meeting the existing fiscal rules”
In the first 142 meetings of the Bank of England’s Monetary Policy Committee since it was established in 1997, Bank Rate was changed 44 times. In the 113 meetings since the depths of the global financial crisis, there have only been three changes.
Imagine you are a policymaker tasked with developing an industrial strategy for your region. Where do you look for evidence to understand your specialisation profile? Or perhaps you own a business specialising in the manufacture of medical devices connected to the internet of things, and you’ve just secured funding allowing you to scale-up and relocate.
Freeports are in the news again after the government unveiled plans to create up to ten of them across the UK after Brexit. Freeports are designated areas within the geographic boundary of a country that are subject to simplified customs procedures on imports. Firms importing goods into them can typically defer duties until the goods enter free circulation or are used within the freeport area
Investments in buildings, structures, transport equipment, IT hardware and other machinery make up about half of all capital expenditure by businesses in the UK. These are tangible assets – those which you can see and touch, and usually measure reasonably well. More often than not, they are bought from manufacturing companies or built by construction firms. As a result, the measurement of these investments is reasonably straightforward.
The pervasive digitalization of daily life is ultimately to the credit of a tightly integrated manufacturing ecosystem centered in the Pacific Rim. Relentless advances in efficiency drive down the cost of producing myriad electronic devices, including mobile phones, the key consumer platform for the latest wave of digitalization. As these devices are distributed around the world, those falling production costs show through to consumer price trends.
There is a one-in-four chance that the UK economy has already slipped into a technical recession.
Coverage of the new forecasts we released today at the National Institute of Economic & Social Research (NIESR) focused, quite rightly, on our warning that there is a one-in-four chance that the UK economy has already slipped into a technical recession, with the possibility of a severe downturn in the event of a disorderly no-deal Brexit.
Growth mindset has gained a strong following in recent years. Originating in the work of American Psychologist Carol Dweck, it juxtaposes fixed and growth mindsets. A fixed mindset has you seeing your qualities as unchangeable - you’re either intelligent or you’re not. Those with a growth mindset believe instead that engaging actively in learning makes them more intelligent.
In recent times we have received some good news about the Spanish economy. GDP has accelerated slightly in the first quarter of 2019, and the performance of the labour market has been promising. The unemployment rate has decreased considerably since reaching its peak in 2013 (26%), and Spain has just been released from the tight supervision of the European Commission’s Significant Deviation Procedure in which was immersed since 2009.
Earlier this month NIESR hosted a workshop entitled “Global Value Chains: Current developments and Implications for Europe”. We brought together the experts from several leading European research institutes, international organisations and the private sector to discuss various aspects of global value chains (GVCs). All contributions dealt with questions of great policy relevance, for both the UK and the other European economies.
Today NIESR has published a literature review on promoting integration in schools. Commissioned by the Department for education to look at ethnic and religious integration, the review finds examples of good practice in bringing young people from different ethnic and religious backgrounds together, for example school linking and admissions policies aimed at reducing segregation.
With a Conservative leadership contest in full swing and differing interpretations of what European election results mean for EU withdrawal, the public debate has yet again turned to a no-deal Brexit, i.e. leaving the European Union to trade on a minimum set of rules defined by the World Trade Organisation. These political shenanigans do not change the economic arithmetic whereby leaving the EU without a deal would inflict a significant economic cost compared to the alternatives.
EU migrants contribute positively to UK public finances. According to recent research, they pay more into the system through taxes than what they take out by using public services and receiving benefits. Furthermore, EU migrants’ contributions over their entire lifetime are usually much higher than those of natives, partly because most migrants arrive fully educated and many leave before the cost of retirement and old-age starts to weigh on public finances.
Still, the public’s opposition to EU migration is driven, in large part, by economic factors, often focused on migrants’ use of state funds, welfare and public services such as the NHS and schools.
The ONS has recently published its analysis of international migration and the education sector, looking at demand for school places, pupil attainment and staff. Its report makes explicit reference to high levels of public interest in the ‘impact and contribution’ of migration on the sector.
The stimulus policies introduced by China and other countries will more than offset the trade shock imposed by the US and as such a successful conclusion of the US –China trade talks that reverses current tariffs presents an upside risk to our GDP growth forecast.
Now that we are well into in the last year of this decade, it seems like a good moment to take stock of what has happened to global economic growth in the second decade of this century. Given all the change this decade has seen, it comes as a surprise to find that the average annual rate of global economic growth over the decade has been similar to that of the previous decade. And it may be even more of a surprise to learn that the year-on-year variation in annual global GDP growth has been very small.
The immigration debate continues to be dominated by arguments for and against freedom of movement, but what does immigration means for our schools and what are schools doing to promote integration? Our new research funded by the Paul Hamlyn Foundation on integration of new migrant students and their families, has collected evidence on what schools around England are doing to facilitate integration by creating a welcoming and inclusive environment and improving the performance of pupils.
At this week’s meeting, the Bank of England’s Monetary Policy Committee is unlikely to adjust the monetary policy stance substantially. Our latest economic forecast published last week suggests that the MPC should wait until the middle of next year before lifting Bank Rate above its current level of 0.75 per cent. This is because even though a soft Brexit seems more likely now it is offset by a weaker outlook for global demand and chronic levels of uncertainty at home.
Free movement has been at the heart of the Brexit debate. The government are in a tricky situation; grappling between a public which is assumed to want free movement to end, and businesses decrying demands for flexible migrant labour. In a labour market that relies on EU labour in sectors such as retail, hospitality and social care, the end of free movement raises major questions as to how labour market shortages will be filled.
“We can control immigration and have a system which welcomes people to the UK based on the skills they have, not the passports they hold”. This was one of the key points in the Vote Leave campaign literature almost three years ago. Two years later, the 2018 Immigration White Paper adopted this message. The foreword written by the Prime Minister reads: “This will be a system where it is workers’ skills that matter, not which country they come from”.
It is workers’ skills that matter, but some skills matter more than others. High-skilled, high-earning migrants are prioritised under the new system. But what does high-skilled mean?