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.
This has been a year of miracles. But unlike Larkin's year of 1963 in which the baby boomers broke free jointly into prosperity and security, we may look back on this year as the end of the long process of liberalisation and globalisation that had been set in train by the postwar consensus.
Don’t let the headlines fool you: consumer price inflation is on the rise. Data from the ONS released today shows that in the year to October the consumer price index rose by 0.9 per cent. Quoting the ONS, “Although the rate was slightly lower than in September 2016, it remained higher than the rates otherwise seen since late 2014”. It’s also worth remembering that the ONS figure describe the past, not the future. The impact of the gradual appreciation of sterling that took place between 2013 and 2015 as well as the fall in oil prices witnessed in the first half of 2015 had been weighing down on inflation. As these temporary factors drop out of the calculation, inflation should rebound.
Since Donald Trump’s victory last week, the odds of Marine Le Pen (National Front) winning the French Presidential election in May have shortened to 2:1. That is a 33% chance compared to a 56% chance for the frontrunner and establishment candidate Alain Juppe.
Le Pen is committed to holding a French referendum on EU membership (‘Frexit’) which would have huge and unpredictable consequences for the EU. It is difficult to see how the other 27 EU nations would have the time, inclination or incentive to accommodate the UK while faced with a threat to its very own existence.
Separating monetary from fiscal policy is no simple matter. Both are primarily designed to help smooth economic fluctuations. Budget deficits limit the depths of recessions as do low interest rates.
What sort of Brexit might the Government be able to negotiate? The term hard Brexit is used ubiquitously but defined infrequently. It is generally defined in terms of the relationship the UK will have with the EU’s single market.
Will the election of Donald Trump plunge us into a global recession? Some economists, from analysts at Citgroup to Paul Krugman, think so. But so far markets disagree – after panicking overnight, the immediate impact seems to be surprisingly small.
Immigration and free movement were central to the referendum result – and to what happens next. My paper in November’s National Institute Economic Review examines the short and long-term impacts of the UK referendum on migration flows and migration policy.
In the article I recently co-authored for the NIESR November Review I explored the reasons why negotiating the UK’s future trade arrangements is a massive job. There are the main points I raised.
I start this new series of end-of-the-week blogposts with a small confession. Many years ago I was at the Bank of England working in monetary analysis the day that operational independence was granted by the incoming Labour administration.
More than four months after the referendum result to leave the European Union, there are still big question marks around what the UK’s future outside the European Union will look like.
In the aftermath of June 2016 EU Referendum result the majority of attention has focused on what might be future economic relationship between the UK and the EU and the prospects for the UK’s trade relationships with third countries once outside the EU. None of the proposed models for the future trade policy relationship between the UK and the EU (for example, membership of the European Economic Area or a Free Trade agreement) come with a defined foreign and security policy relationship.
There is no shortage of advice to women, on how to manage our careers and body clocks, strive for work-life balance, ‘lean in’ and have it all. Sometimes it feels as if everyone has an opinion about how working women should organise their lives, and some of the advice can feel difficult to live up to.
Today’s GDP figures suggest that the immediate economic impact of the Brexit vote has, at least up until September, been modest. Contrary to most forecasts, there isn’t much evidence to suggest that increased uncertainty has, as yet, translated into reduced consumer spending or business activity. Of course, this says almost nothing at all about the long-term economic impacts of Brexit; and it is that is the focus of most of the serious independent analysis of the impact of Brexit. Recession is bad, but a permanent long-term hit to growth is worse. .
NIESR has been in the news quite a bit in the last 24 hours following the publication of a set of reports on the Troubled Families Programme. The Programme was launched in 2012 with a budget of £448m to tackle around 120.000 problem families who were said by the Government to cost taxpayers £9bn a year.
Almost half a century ago, Prime Minister Harold Wilson told the country: "From now the pound abroad is worth 14% or so less in terms of other currencies. It does not mean, of course, that the pound here in Britain, in your pocket or purse or in your bank, has been devalued.”
Amber Rudd, the Home Secretary, said almost nothing on the Andrew Marr show today. Given that there is currently almost a complete policy vacuum in government, this was entirely sensible. However, her comments – following Theresa May’s last week – are being reported as a further endorsement of a “work permit” system for economic migration versus the “points-based” one proposed by Vote Leave during the referendum campaign.
As previous readers of my blogs on this topic will know, for much of the last year I (along with Michael O’Connor) have been pressing HMRC and DWP to release more data on how many National Insurance numbers issued to EU nationals are actually in use. Last Thursday, we edged closer to an answer.
With the decision to leave the EU, there has been much discussion about whether the UK will enter recession. This blog provides some information of the frequency of recessions in recent UK economic history, and puts into context the probability of recession in the aftermath of the referendum.
What do today’s labour market statistics tell us about what’s going to happen to the UK labour market as a result of the referendum result? On the face of it, not much. The headline figures for employment, unemployment and so on are based on Labour Force Survey data for the months for April to June (and the changes are calculated with respect to the three months prior to that). The “single month” statistics do show a small uptick in unemployment (from its April low of 4.8% to 5.1%) - but these numbers are volatile, which is why the ONS doesn’t use them as the headline.