Publications

Regional disparities in labour productivity and the role of capital stock

Publication date: 29 Jul 2020 | Publication type: National Institute Economic Review | Theme: Trade, Investment & Productivity | External Author(s): Gardiner,B; Fingleton, B; Martin, B | JEL Classification: C23, C33, D24, O47, R12 | Journal: National Institute Economic Review Issue 253 | Publisher: Cambridge University Press

This paper reports on the availability of regional capital stock data, in the form of new/updated regional (NUTS2 level) capital stock estimates, building on an approach (Perpetual Inventory Method) which had been previously developed for the European Commission. The particular focus here is on the...

Understanding regional economic performance and resilience in the UK: trends since the global financial crisis

We investigate economic resilience of UK regions before, during and after the 2007/8 global financial crisis. We date business cycle turning points in real output, employment and productivity to assess the resilience dimensions of resistance, recovery and renewal and rank the economic resilience of...

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...

COVID-19 impacts on destitution in the UK

Publication date: 29 Jul 2020 | Publication type: National Institute Economic Review | NIESR Author(s): Bhattacharjee, A, Lisauskaite, E | JEL Classification: E24; I32; C553; J82; L00; R11 | Journal: National Institute Economic Review Issue 253 | Publisher: Cambridge University Press

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...

Prospects for the UK Economy

The combination of the Covid-19 pandemic and the public health measures taken to limit its spread here and overseas are forecast to contribute to a fall in GDP of 10 per cent in 2020. The level of economic activity in the final quarter of last year is not likely to be regained much before the...

Prospects for the World Economy

Publication date: 28 Jul 2020 | Publication type: National Institute Economic Review | Theme: Macroeconomics | NIESR Author(s): Naisbitt, B, Boshoff, J, Holland, D, Hurst, I, Kara, A, Macchiarelli, C, Mao, X, Sánchez Juanino, P, Thamotheram, C, Whyte, K | Publisher: Cambridge University Press

The Covid-19 pandemic and the effects of the measures taken to protect lives continue to dominate the short-term global economic outlook. In still highly uncertain times, there are widespread falls in GDP as lockdowns pause many forms of economic activity. Some countries are now starting to...

The macroeconomics of de-globalisation

Publication date: 27 Jul 2020 | Publication type: Economic Review Preview | NIESR Author(s): Liadze, I, Kara, A

This is a preview from the National Institute Economic Review, August 2020, no 253. The Covid-19 pandemic has revived protectionist measures. The most proximate trigger for this switch is a desire to prioritise national security interests and public health concerns over the long- standing...

Firm creation in the UK during lockdown

Publication date: 23 Jul 2020 | Publication type: Economic Review Preview | External Author(s): Duncan, A.; León-Ledesma, M.; Savagar, A

This is a preview from the National Institute Economic Review, August 2020, no 253. Business creation is an informative measure of real economic activity. During exceptional events such as the Covid-19 pandemic, it is important to develop tools that allow us to measure in real time the effect of...

NIESR Wage Tracker - July 2020

Publication date: 16 Jul 2020 | Publication type: NIESR Wage Tracker | NIESR Author(s): Young, G

Private Sector Pay Weakening as Pay Falls Main points According to new ONS statistics published this morning, average weekly earnings, excluding bonuses, grew at an annual rate of 0.7 per cent in the three months to May, or around zero in real terms. More up to data information from HMRC’s...

NIESR CPI Tracker - July 2020

Publication date: 15 Jul 2020 | Publication type: NIESR CPI Tracker | NIESR Author(s): Boshoff, J

Underlying Inflation Diverges at Regional Level Consumer price inflation increased by 0.1 percentage points to 0.6 per cent in the year to June 2020, as per data released by the ONS. Our new analysis of 97,101 locally collected goods and services indicates price increases in the clothing and...

July 2020 GDP Tracker

Publication date: 14 Jul 2020 | Publication type: NIESR GDP Tracker | NIESR Author(s): Whyte, K

Slow recovery from 20 per cent output contraction Main points The UK economy remains on course to decline by 20 to 25 per cent in the second quarter of 2020. According to the ONS estimate published this morning, the UK economy contracted by 19.1 per cent in the three months to May, broadly in...

China and the United Kingdom: Economic Relationships

Publication date: 13 Jul 2020 | Publication type: NIESR Landscape Series | NIESR Author(s): Allen, W. A., Chadha, J S, Kara, A, Pabst, A, Nguyen, D, Mao, X, Xu, L, Turner, P | Report number: 1

Executive summary China’s remarkable growth has transformed the global pattern of world production, trade and investment, and has caused large changes in the industrial structures of North America, Europe (including the UK) and Japan. China and its neighbours have become the ‘workshop of the world...

NIESR Analysis Ahead of the Summer Statement: Keep Doing ‘Whatever it Takes’

Publication date: 8 Jul 2020 | Publication type: Other | NIESR Author(s): Young, G

Executive Summary The Chancellor should extend the government’s jobs furlough scheme, ideally until GDP is back to its pre-Covid 19 level. The scheme has been highly successful in protecting over 9 million jobs over this period and continues to support around 6 million furloughed workers. ...

NIESR CPI Tracker - June 2020

Publication date: 17 Jun 2020 | Publication type: NIESR CPI Tracker | NIESR Author(s): Boshoff, J

Underlying Inflation Picks Up as CPI Inflation Falls Consumer price inflation decreased by 0.3 percentage points to 0.5 per cent in the year to May 2020, as per data released by the ONS. Our new analysis of 89,142 locally collected goods and services indicates price declines in the transport,...

NIESR Wage Tracker - June 2020

Publication date: 16 Jun 2020 | Publication type: NIESR Wage Tracker | Theme: Macroeconomics | NIESR Author(s): Lenoel, C

Sharp Drop in Pay Growth as a Result of Covid-19 Main points The first signs of the COVID-19 impact on the labour market are fewer vacancies, more universal credit claims and lower pay growth. According to new ONS statistics published this morning, UK average weekly earnings expanded by 1.7 per...

Statement re House of Commons Treasury Committee Report

Publication date: 15 Jun 2020 | Publication type: Other

Economic impact of the coronavirus: Gaps in support NIESR welcome the report from the House of Commons Treasury Committee and particularly the recognition given to the plight of new starters. The evidence presented in the report reflects our own assessment of the situation, published in a recent...

June 2020 GDP Tracker

Publication date: 12 Jun 2020 | Publication type: NIESR GDP Tracker | NIESR Author(s): Whyte, K

UK Set to Lose a Quarter of Output in Q2 Main points The UK economy looks set to decline by 20 to 25 per cent in the second quarter of 2020, a significantly steeper decline than the first quarter, reflecting the full impact of lockdown measures. According to the ONS estimate published this...

Wealth inequality in the long run: A Schumpeterian growth perspective

Publication date: 7 Jun 2020 | Publication type: Journal article/book/chapter | External Author(s): Madsen, J., Minniti, A. | Journal: The Economic Journal No. Forthcoming

Early Years Toolbox Pilot Report

Publication date: 29 May 2020 | Publication type: Report | Theme: Education & Labour, Employment & Social policy | NIESR Author(s): Stokes, L, Manzoni, C, Runge, J, Hudson-Sharp, N | External Author(s): Dawson, A., Huxley, C., Takala, H., Williams, C.

The Early Years Toolbox (EYT) is a set of iPad-based assessment tools suitable for use with young children by early years staff. It includes eight brief, engaging, and game-like assessment apps that aim to capture abilities that research has shown to be the most predictive of later academic, social...

Vulnerability from Debt in the Coronavirus Crisis

Publication date: 26 May 2020 | Publication type: Policy Paper | NIESR Author(s): Naisbitt, B | Report number: 20

Abstract After a period of deleveraging following the financial crisis a decade ago, the past five years have seen private sector debt rising again in both advanced and emerging economies. Public sector indebtedness, too, is generally higher than five years ago. The increase in debt was, before...

The Economics of the UK University System in the Time of Covid-19

Publication date: 22 May 2020 | Publication type: Policy Paper | NIESR Author(s): Dolton, P | Report number: 19

Abstract The UK University system faces its biggest challenge in 40 years as a direct result of the Covid-19 pandemic. What is the scale of the uncertainty facing universities and to what extent have the problems been exacerbated by the over-reliance on overseas student fee income to facilitate a...

NIESR CPI Tracker - May 2020

Publication date: 20 May 2020 | Publication type: NIESR CPI Tracker | NIESR Author(s): Boshoff, J

Underlying Inflation Reflects Inflationary Pressure Consumer price inflation decreased by 0.7 percentage points to 0.8 per cent in the year to April 2020, as per data released by the ONS. Our new analysis of 84,990 locally collected goods and services indicates consumers benefitted from lower...

NIESR Wage Tracker - May 2020

Publication date: 19 May 2020 | Publication type: NIESR Wage Tracker | NIESR Author(s): Young, G, Sánchez Juanino, P

First Signs of Severe Labour Market Impact of Covid-19 Main Points Official labour market statistics are mainly lagging indicators and are only just beginning to show the impact of Covid-19 which started to affect the UK economy from around the middle of March. According to new ONS statistics...

May 2020 GDP Tracker

Publication date: 13 May 2020 | Publication type: NIESR GDP Tracker | NIESR Author(s): Whyte, K

Economy Contracting at Rapid Pace Main Points The ONS preliminary estimates suggest that growth declined by 2.0 per cent in the first quarter of 2020, broadly consistent with what we suggested it could be last month (figure1.) The substantive contraction in growth reflects negative...

Moving Back Towards Market-Based Government Finance

Publication date: 12 May 2020 | Publication type: Policy Paper | NIESR Author(s): Allen, W. A. | JEL Classification: E52, E58 | Report number: 18

The Federal Reserve and the Bank of England have been pursuing yield curve control in their respective government securities markets since market liquidity collapsed in the middle of March. The paper discusses the issues that arose during and after previous episodes of yield curve control,...

The Effects of Macroprudential Policy on Banks' Profitability

Despite the importance of profitability to banks’ growth and stability, there have, to our knowledge, been no studies which assess the effect of macroprudential regulation on banks’ profitability, a key aspect of the transmission of macroprudential measures. We seek to fill this lacuna with...

Summary of NIESR forecasts ahead of key Bank of England report

Publication date: 4 May 2020 | Publication type: Other | Theme: Macroeconomics

Ahead of the Bank of England’s MPC meeting and quarterly monetary policy report on Thursday, here below a summary of key points outlined in our latest analysis for the UK and global economy, available in full here. GDP is estimated to be reduced by about 30 per cent when the lockdown is in...

Brexit and impact routes through global value chains

We analyse the trade routes between the UK and EU countries. Our results show that the relative importance of the UK as a trading partner in the EU has slightly decreased. We further decompose the total value added into components that quantify the value added that is generated through direct trade...

The EU’s shrinking share in global manufacturing: a value chain decomposition analysis

The EU´s falling share in global manufacturing has fuelled concerns about an overall loss of EU competitiveness, in particular vis-à-vis China. We analyse the empirical evidence underlying these concerns by applying a newly developed decomposition technique to global input-output data spanning the...

On the relevance of global value chains and the intra-European division of labour

This article first introduces the concept, the rationale, the causes and the genesis of global value chains from a worldwide perspective in the form of a brief overview. In the second empirical section, a closer look is taken at the intermediate trade integration in the EU. In particular, the...

Value chains and domestic competitiveness

Publication date: 29 Apr 2020 | Publication type: National Institute Economic Review | Theme: Macroeconomics | External Author(s): Gasiorek, M, Smith, A, Tamberi, N | JEL Classification: F6, F14, F15, F17; F42 | Journal: National Institute Economic Review Issue 252 | Publisher: Cambridge University Press

With international trade increasingly undertaken within vertically fragmented supply chains, this paper considers the impact of changes in trade costs on domestic output. In the context of the UK’s exit from the EU we show that the negative impact on UK output will depend on changes in both...

Introduction: Global value chains and economic dislocations

The world is undergoing an unprecedented shock as a result of the Covid-19 pandemic and the resulting lockdowns in nearly all economies. As major world economies are being put on hold, millions of jobs and incomes are being lost, which has created an imperative for economic policy actions....

Prospects for the World Economy

Publication date: 28 Apr 2020 | Publication type: National Institute Economic Review | Theme: Macroeconomics | NIESR Author(s): Naisbitt, B, Boshoff, J, Holland, D, Hurst, I, Kara, A, Liadze, I, Macchiarelli, C, Mao, X, Sánchez Juanino, P, Thamotheram, C, Whyte, K | Journal: National Institute Economic Review Issue 252 | Publisher: Cambridge University Press

The effects of the coronavirus pandemic and the control measures taken to combat its spread have changed the short-term global economic outlook in an unprecedented manner from that forecast just three months ago. In these highly uncertain times, we now expect widespread falls in GDP, particularly...

Prospects for the UK Economy

Measures to limit the spread of Covid-19 are causing a severe contraction in economic activity of uncertain magnitude. In our main-case scenario, GDP falls by 7 per cent in 2020 and public sector borrowing rises above £200 billion in 2020–21, over £150 billion more than in the OBR's forecast at...

Commentary - Monetary policy in troubled times

Publication date: 27 Apr 2020 | Publication type: National Institute Economic Review | NIESR Author(s): Chadha, J S | Journal: National Institute Economic Review Issue 252 | Publisher: Cambridge University Press

The Commentary in this Review has touched on the mix of monetary and fiscal policies regularly since the Brexit referendum. The timeless issues relating to the framework for monetary and fiscal policy and their appropriate degree of co-ordination have been exposed by the Covid-19 crisis. We have...

The slump of the 1920s

Publication date: 24 Apr 2020 | Publication type: Economic Review Preview | NIESR Author(s): Chadha, J S

This is a preview from the National Institute Economic Review, May 2020, no 252. The largest quarterly fall in output in modern times in the UK (so far) was in the second quarter of 1921 when GDP at constant market prices fell by 12.3 per cent. This was directly followed by the largest quarterly...

US and UK Labour Markets Before and During the Covid-19 Crash

We examine labour market performance in the US and the UK prior to the onset of the Covid-19 crash. We then track the changes that have occurred in the months and days from the beginning of March 2020 using what we call the Economics of Walking About (EWA) that shows a collapse twenty times faster...

COVID-19: Debt Relief and the Global Poorest

Publication date: 23 Apr 2020 | Publication type: Policy Paper | NIESR Author(s): DoyleP | Report number: 17

Abstract Pandemic is not the time to “do something”: more than ever, it is the time to “do something coherent.” Aid for the poorest countries conditioned on debt service, just announced by the IMF and G-20, utterly fails that imperative. Instead, grants equivalent to the full IMF estimate of the...

NIESR CPI Tracker - April 2020

Publication date: 22 Apr 2020 | Publication type: NIESR CPI Tracker | NIESR Author(s): Boshoff, J

CPI Reflects Lower Fuel Prices The consumer price index inflation rate decreased by 0.2 percentage points to 1.5 per cent in the year to March 2020, as per data released by the ONS. Our new analysis of 120,395 locally collected goods and services indicates that consumers benefitted from lower...

The measurement of inflation during the lockdown: a trial calculation

Publication date: 22 Apr 2020 | Publication type: Policy Paper | External Author(s): Dixon, H | Report number: 16

Abstract The big changes in consumption patterns during the Lockdown need not of themselves have a big effect on measured inflation. Using a guesstimate of lockdown weights for different types of consumption and applying them retrospectively to the 2019 inflation data as an experiment led to a...

NIESR Wage Tracker - April 2020

Publication date: 21 Apr 2020 | Publication type: NIESR Wage Tracker | NIESR Author(s): Lenoel, C

Wage Growth to Slow Further Main points According to new ONS statistics published this morning, UK average weekly earnings expanded by 2.9 per cent excluding bonuses in the three months to February 2020 compared to the year before, and by 2.8 per cent if bonus payments are taken into account....

Summary of the NIESR Business Conditions Forum February 2020 - The "levelling up" policy

Publication date: 21 Apr 2020 | Publication type: Business Conditions Forum Summary

The National Institute of Economic and Social Research (NIESR) hosted the Business Conditions Forum (BCF) on 12th February. The aim of the BCF is to have informed and analytical discussions of data and surveys to better understand the current state of the UK economy. The discussions are held...

Quantifying the global macroeconomic spillovers of illness and lockdown measures

Publication date: 17 Apr 2020 | Publication type: Economic Review Preview | NIESR Author(s): Holland, D, Liadze, I

This is a preview from the National Institute Economic Review, May 2020, no 252. The Covid-19 pandemic has delivered a shock that is truly global in nature. Cases of the virus have been reported in nearly every single country and territory in the world. At least 135 countries across the globe,...

A Program of Guaranteed Loans to Compensate SME Covid-19 Revenue Losses: Rapid Dispersal and Large Net Economic Benefits

Publication date: 14 Apr 2020 | Publication type: Policy Paper | External Author(s): Milne, A | Report number: 15

Abstract This paper explores the costs and benefits of compensating those UK SMEs who have experienced substantial revenue loss as a result of the current closure of their business activities. It finds that the benefits very substantially exceed the costs, by a ratio of 5:1 (every £1 of government...

April 2020 GDP Tracker

Publication date: 9 Apr 2020 | Publication type: NIESR GDP Tracker | NIESR Author(s): Whyte, K

GDP Could Contract by 15 to 25 Per Cent in Second Quarter Note: Grey and Burgundy bars show high and low scenarios Main Points: Once in a century event poses major threat to UK growth. The UK economy could now see growth decline by 5% in the first quarter of 2020, and if a lockdown...

Central Bank Operations in Government Securities During the Pandemic

Publication date: 9 Apr 2020 | Publication type: Policy Paper | NIESR Author(s): Allen, W. A. | Report number: 14

With economic activity severely disrupted by the coronavirus crisis, many governments have been supporting peoples’ incomes and keeping businesses alive by means of income support programmes financed by borrowing. This paper describes how the borrowing is being done in the United States and the...

Economic Crisis: Virtual Special Issue

Publication date: 3 Apr 2020 | Publication type: National Institute Economic Review | Theme: Macroeconomics | Journal: National Institute Economic Review Issue Virtual issue | Publisher: Cambridge University Press

Our latest "virtual issue" of our Economic Review focussing on Economic Crisis

The Economy on Ice - Meeting the economic challenges during and after the COVID-19 crisis

Publication date: 1 Apr 2020 | Publication type: Policy Paper | NIESR Author(s): Bougheas | JEL Classification: E58, E64, H51 | Report number: 13

The purpose of this article is twofold. Firstly, it argues that it is doubtful that the currently announced policies will achieve their targets while they create substantial obstacles to the recovery of the post-crisis economy. Secondly, it proposes an alternative plan that its aim is (a) to ensure...

The Fed’s enhanced swap lines and new interventions in the Treasury market

In March 2020, the Federal Reserve enhanced its existing swap lines with foreign central banks, and introduced additional temporary swap lines with other central banks, in order to support the smooth functioning of U.S. dollar funding markets during the coronavirus epidemic. The Federal Reserve...

A preliminary assessment of the possible economic impact of the coronavirus outbreak: update

Publication date: 27 Mar 2020 | Publication type: NiGEM Observations | NIESR Author(s): Hurst, I, Liadze, I, Naisbitt, B, Young, G

Summary • The coronavirus pandemic has triggered a global economic shock. We provide an exploratory analysis of its impact on the global economy • The channels we focus on are a reduction in labour, a reduction in expenditure and investment, an increase in uncertainty, and a temporary shutdown...

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