National Institute Economic Review

Prospects for the UK economy: Forecast Summary

  • Economic growth has stalled and there is around a one-in-four chance that the economy is already in a technical recession.
  • The outlook beyond October, when the United Kingdom is due to leave the European Union, is very murky indeed with the possibility of a severe downturn in the event of a disorderly no-deal Brexit.
  • On the assumption that a no-deal Brexit is avoided, the economy is forecast to grow at around 1 per cent in 2019 and 2020 as uncertainty continues to hold back investment and productivity growth remains weak.

World Overview

Economic activity showed a marked slowing in growth in several countries during the second half of last year. The key issue for the forecast concerns to what extent this slowdown may presage a more widespread and deeper slowing in economic growth. Our central view continues to be that global economic growth will be weaker this year than last but that the pace of growth will moderate, not plunge.

Prospects for the UK Economy

The main development since our last forecast is that the United Kingdom’s exit from the European Union did not take place on 29 March as had been planned. Instead, the exit date has been pushed back to 31 October 2019, with the possibility of leaving earlier if some way around the existing parliamentary impasse can be found before then.

This open access is available as part of our ESRC IAA 

‘High-Skilled Good, Low-Skilled Bad?’ British, Polish and Romanian Attitudes Towards Low-skilled EU Migration

A new skills-based immigration system, with a preference for the highly-skilled, is central to UK policy debates in the Brexit context, arguably responding to majority public opinion on migration. Through qualitative fieldwork with British, Polish and Romanian citizens living in two local authorities in England, this paper shows what participants understand by ‘low-skilled’ and how there is broad support of those who ‘contribute’, but are ‘controlled’ at the same time.

Youth Mobility Scheme: The Panacea for Ending Free Movement?

Free movement has been at the heart of the Brexit debate, with the government grappling between satisfying public and business demands for restrictive and liberal approaches to immigration respectively. In response the government have advocated temporary migration as a potential solution, including an expanded UK-EU Youth Mobility Scheme (YMS) modelled on the current T5 YMS on the assumption that YMS migrants undertake low-skilled jobs. Little is known about this visa or the labour market activity of YMS migrants.

Is Employer Sponsorship a Good Way to Manage Labour Migration? Implications for Post-Brexit Migration Policies

This paper examines the implications of labour migration models that rely on employer sponsorship. According to UK government proposals, long-term migration into high-skilled jobs after Brexit will require workers to be sponsored by employers, while workers in low-skilled and low-wage jobs will receive short-term work permits that do not require an employer sponsor.

Low-Skilled Employment in a New Immigration Regime: Challenges and Opportunities for Business Transitions

In an era of free movement UK employers have had ready access to a supply of labour from the European Union to fill lowskilled jobs. This has enabled them to adopt business models, operating within broader supply chains, that take advantage of this source of labour and the flexibility that many migrant workers – especially those who are new arrivals to the UK – are prepared to offer them.

Immigration Policy from Post-War to Post-Brexit: How New Immigration Policy can Reconcile Public Attitudes and Employer Preferences

As Britain prepares to leave the EU immigration policy has come to the top of the policy agenda. The Brexit vote was seen as a vote against free movement and new policies are aimed at introducing more restrictive controls. The report by the Migration Advisory Committee (MAC) in September 2018 recommended little new provision for low-skilled migration post-Brexit (MAC, 2018). This was then adopted by the Home Office in its Immigration White Paper, published in November 2018 (Home Affairs Committee, 2018).

Introduction: Challenges for Immigration Policy in Post-Brexit Britain

Immigration is a key economic and social issue: it has fuelled economic growth and prosperity, changed the demographic composition of the UK and shaped much of the political agenda. It played a role in the outcome of the EU referendum vote, leading the Government to seek to remove free movement from the terms of any future relationship with the EU. Since many of the UK’s skill and labour needs have been met by EU mobility in the past decade or so, this will require a new set of immigration policies, particularly in relation to lower level skills.

World overview: Forecast summary

  • Recent data indicates that the global output growth cycle has peaked. We expect global GDP growth to continue, but at a slightly slower pace than in the past two years.
  • Tariff increases and trade disputes have contributed to slowing growth and have added uncertainty to the global economic outlook.
  • While slightly faster wage growth in advanced economies and tighter labour markets raise the potential for higher inflation, the fall in oil prices in late 2018 should, with slowing output growth, prevent a widespread pick-up in inflation.