National Institute Economic Review

Prospects for the UK Economy

  • The economic contraction resulting from Covid-19 and resultant public health measures has been unprecedented. The public sector has acted as a shock absorber to protect households and businesses, temporarily raising government debt levels, but the recovery has been hampered by uncertainty, repeated changes in policy, and now by the resurgence of the virus.

The World Economy

  • Responding to the threat to public health, lockdowns have led to the deepest contraction in global economic activity since the Second World War, with global GDP in the second quarter 10½ per cent lower than six months earlier.
  • Activity indicators show a rise in global economic activity in the third quarter, supported by strong monetary and fiscal policy actions and some unlocking of restrictions. Despite this, our main-case scenario is for global GDP to fall by 4½ per cent this year. 

COVID-19 impacts on destitution in the UK

We use microsimulation combined with a model of the COVID-19 impacts on individuals and households to obtain projections of households in destitution in the United Kingdom. The projections are estimated at two levels: aggregate quarterly for the UK, for all quarters of 2020; and annual for 2020 differentiated by region, sector and household demographics. At the aggregate level, destitution is projected to be about three times higher than the non-COVID counterfactual level in 2020Q2, as well as substantially higher than the non-COVID case for the remainder of the year.

Living with Covid-19: balancing costs against benefits in the face of the virus

This paper analyses the costs and benefits of lockdown policies in the face of COVID-19. What matters for people is the quality and length of lives and one should measure costs and benefits in terms of those things. That raises difficulties in measurement, particularly in valuing potential lives saved. We draw upon guidelines used in the UK for public health decisions, as well as other measures, which allow a comparison between health effects and other economic effects.

Reconciled estimates and nowcasts of regional output in the UK

There is renewed interest in levelling up the regions of the UK. The combination of social and political discontent, and the sluggishness of key UK macroeconomic indicators like productivity growth, has led to increased interest in understanding the regional economies of the UK. In turn, this has led to more investment in economic statistics. Specifically, the Office for National Statistics (ONS) recently started to produce quarterly regional GDP data for the nine English regions and Wales that date back to 2012Q1.

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