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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. This increased destitution is initially largely due to the effect on the self-employed, and as the Furlough scheme is drawn down, also on the unemployed. Impacts upon different regions and sectors vary widely, and so do variations across different household types. The sectors particularly affected are construction and manufacturing, while London and its closely connected regions (South East and the Midlands) are most severely affected. Single adult households suffer the most, and the adverse effects increase with number of children in the household. That the effects upon youth remain high is a particularly worrying sign, and very high increases in destitution are also projected for 25–54 year olds and the elderly (75 years and older). Further, severe adverse effects are projected for sections of society and the economy where multiple impacts are coincident. Robust and sustained mitigation measures are therefore required. [ABSTRACT FROM AUTHOR]

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 and much deeper than the Great Recession. We examine unemployment insurance claims by state by day in the US as well as weekly national data. We track the distributional impact of the shock and show that already it is hitting the most vulnerable groups who are least able to work from home the hardest – the young, the least educated and minorities. We have no official labour market data for the UK past January but see evidence that job placements have fallen sharply. We report findings from an online poll fielded from 11–16 April 2020 showing that a third of workers in Canada and the US report that they have lost at least half of their income due to the Covid-19 crisis, compared with a quarter in the UK and 45 per cent in China. We estimate that the unemployment rate in the US is around 20 per cent in April. It is hard to know what it is in the UK given the paucity of data, but it has gone up a lot. [ABSTRACT FROM AUTHOR]

Executive Summary: Government post-Brexit will face sustained and difficult challenges as the UK adjusts to its new situation. Yet these challenges risk being exacerbated by fundamental changes in UK political debate that are affecting the perceived legitimacy and effectiveness of the system and structures of government. These include erosion of the clear distinction entrenched for the last 150 years between political choices by elected representatives and impartial administration by the civil service; the disruption of traditional deliberative processes by digital and social media; and increased centralisation of decision-making in No. 10 Downing Street combined with inadequate scrutiny of that decision-making either by the Cabinet or by Parliament. The centralisation of executive power reduces its perceived legitimacy across the UK, with devolved government in Scotland and Wales seen as contingent on the Westminster Parliament and Northern Ireland under control by central government. Fiscally, the UK has become the most centralised democratic country in the world. As government faces up to the challenge of unwinding membership of the legal and regulatory framework developed during 45 years of EU membership, it is vital that the UK's political structures restore their legitimacy and efficiency. Necessary reforms start with greater transparency about how government really works today. A PM's Department should be created, separate from the Cabinet Office; senior appointments including the Chief of Staff and 'Advisors', as well as instructions from No. 10 to departments, should be subject to effective Parliamentary scrutiny. Legally entrenched structures are required to confirm that devolved powers cannot simply be overridden by the Westminster Parliament. Greater fiscal autonomy should be guaranteed to local government. Finally, politicians should choose either to recommit explicitly to the original system whereby the civil service remains separate from politics and take steps to make it effective; or acknowledge the drift towards greater political control of the civil service and introduce safeguards to minimise political abuse, for example by taking steps to increase scrutiny of appointments and expenditure. [ABSTRACT FROM AUTHOR]

Executive Summary: Brexit creates deep challenges for the UK's structure of governance; not least concerning the degree and manner in which powers are devolved within one of the most centralised countries in the world. Departing from the EU is likely to exacerbate regional inequalities and possibly social divide, while at the same time leading to further centralisation of powers, at least in the short term. Most Brexit analysis looks at the reorientation of the UK's external relationships, but the most significant impact may be on its internal constitutional affairs. While it is generally agreed that the UK needs more devolution, there is little discussion about how and why it sometimes succeeds, but also sometimes falls short of expectations. Ever since Adam Smith it has been known that economic prosperity, justice, and social cooperation are mutually reinforcing. Therefore, policy must be built around community and a sense of belonging, rather than a collection of anonymous individuals. The Core Design Principles set out by Elinor Ostrom provide a framework to transform governance structure at every level from the smallest communities all the way to parliament. Necessary institutional changes include giving local authorities much greater control over revenue-raising powers and therefore the services they wish to support. National legislatures must have the power to borrow for investment without limit, but with sole responsibility for repayment, to enhance local political accountability. A statutory body should be established, including representatives of the devolved assemblies and English regions, to address regional disparities, and there should be a much stronger regional presence in decision-making by HM Treasury and the Bank of England. [ABSTRACT FROM AUTHOR]

Executive Summary: Discussion of the UK's housing crisis is of long date, and tends to focus on a simple story about a mismatch in housing supply and demand and the consequent need to build more homes. Yet the reality is more complex with multiple sub-plots including social housing, stress in the private rented sector, benefits, subsidies and ultimately taxation of home ownership. At the bottom of the market, the crisis is real and acute, as manifested in a sharp increase in homelessness and rough sleeping. The inescapable answer is to increase the depleted stock of social housing and widen eligibility criteria. An increase of 100,000 social units a year in England would help address this problem, as well as alleviate the financial squeeze on tenants of the private rented sector, whose number has grown sharply in the past 15 years in tandem with a steep rise in the housing benefit bill. Recent efforts to curb housing benefit have further increased distress, so it will be necessary to consider increasing benefits again alongside regulatory interventions with private landlords. In the home ownership market, recent government intervention has taken the form of the much-criticised Help-to-Buy Equity Loan scheme. This market policy to support new-build homes should be wound down and replaced by a scheme to endow all young people with a capital sum that they could use for second-hand homes as well. More generally, a more sophisticated approach to planning home-building is needed, both for assessing overall numbers and their regional distribution and in financing the supporting infrastructure. But none of these measures is a panacea for a housing crisis that is in large part a symptom of problems in the wider economy, such as low relative wages for young people, a lack of clarity about environmental issues, and failing places. A successful policy package to address the distorted structure of the housing market must also grasp the most difficult nettle of all – namely the way the tax benefits of owner-occupation incentivise overconsumption of housing and a widening wealth gap between renters and home owners, and between owners in different parts of the country. If we spend more to help those who struggle to afford decent housing, then it is only just to raise more taxation from those who benefit from restrictions on housing supply – whether through reform to council tax, a wider wealth tax or a limited form of Capital Gains Tax on principal residences. [ABSTRACT FROM AUTHOR]

Executive Summary: Infrastructure investment can substantially increase a nation's capital stock and thereby boost productive, or supply-side, potential. It can also be useful as a tool in macroeconomic stabilisation, while public spending on quality infrastructure projects has been shown to have significantly greater multiplier effects than tax cuts – so the case for an increasing spend is not undermined by a country's overall debt level. These arguments are especially apposite for post-Brexit UK. Britain's investment performance in general has been especially poor since the 2016 EU referendum. Fixed capital formation as a proportion of GDP is low by international standards, while the government's share of fixed capital formation, at 2.5 per cent, is also below average. It would make sense to target an increase in public and private infrastructure spend to 3.5 per cent of GDP which is the OECD's recommended level. While major infrastructure projects continue to generate controversy on grounds of cost overruns and other issues, UK policy-makers have recently taken a more constructive approach to infrastructure development, notably with the creation of an independent National Infrastructure Commission. But the UK's infrastructure remains unsatisfactory, with significant parts of its energy, water, transport and communications networks in need of renewal or replacement, and infrastructure project delivery remains poor. In summary, much of Britain continues to operate well into the 21st century largely with 20th century, sometimes 19th century, infrastructure assets that are creating bottlenecks, crimping productivity, putting off potential foreign investors, undermining the economy's competitiveness, increasing inequality, and leaving the economy ill-equipped to face future challenges such as Brexit and climate change. The government needs to be bolder, setting out a more ambitious set of priorities including energy projects, regional spending, and fostering capital recycling and private sector investment. A still more ambitious, but eminently feasible, proposal would be to establish a National Investment Bank to offer project guarantees, recommend user fees, lend to projects with the proceeds of National Investment Bonds and simplify planning among other tasks. In a serious downturn, with monetary policy exhausted, the NIB could also help to co-ordinate and finance a response. [ABSTRACT FROM AUTHOR]

Executive Summary: Threats to the security of the UK are evolving with the changing nature of conflict and balance of power in the world. They are multiple and fragmented, and domestic and online as well as overseas in nature: principally state-based threats such as posed by Russian activity; terrorism; cyber-attacks; and serious organised crime. To respond, the United Kingdom will need flexible capabilities aimed at fostering infrastructural and societal resilience as much as conventional defence. Above all, the UK needs to focus on maintaining, promoting, and defending the international rules-based order, as represented by the UN and NATO among other institutions. The UK possesses significant assets to these ends, including its continuing status as one of eight acknowledged nuclear powers – a status that it should not abandon unilaterally; permanent membership of the UN Security Council; membership of the 'Five Eyes' intelligence community; and its internationally respected armed forces. But effort and resources are required to support these commitments, for example in helping to encourage other European states to spend more on defence; in contributing to UN peace-keeping operations or other collaborative overseas actions; and most of all in ensuring that army and navy manpower is rebuilt. Two per cent of GDP is no longer sufficient for the proper defence of the nation. Even allowing for the demands of other parts of government, the target for defence spending should be raised in the next review to 2.2 per cent. The principal focus will need to be on efficiency and redeployment of resources as the current equipment-heavy procurement cycle comes to an end. In particular, investment needs to continue to be rebalanced towards new capabilities such as drone technology, offensive and defensive cyber and intelligence manpower. But, to avoid any weakening of the country's security, priority should be given to negotiating a new agreement on security and intelligence cooperation with its European allies to replace the arrangements it had within the EU. [ABSTRACT FROM AUTHOR]

Executive Summary: After Brexit, the UK must show that it has a voice. It will need to re-earn international respect, and in particular establish the concept of a 'global Britain' on the basis of performance, not rhetoric. That means re-establishing a strong network of relationships around the world in support of its security and economic health, but also continuing to play a leading role in support of the international rules-based order. For example, it should make the most of its continuing status as a Permanent Member of the UN Security Council to act as a problem-solver and system-enhancer in the collective interest. An early, first-order priority will be establishing a new, mutually beneficial partnership with the European Union, which continues to form our economic and political neighbourhood. Reconstructing a modern relationship with the United States is not secondary to that, but cannot substitute for it and must be undertaken in recognition of the differing interests and instincts of the two sides. A further challenge is building the right relationship with China based on mutual interest in trade, peace, and international respect and on confronting expansionist or opportunistic practices. With Russia, too, it is possible to design a predictable set of behaviours on either side, and with both countries good communication channels will need to be maintained. Brexit gives the UK the scope to construct a more deliberate diplomatic approach to the rest of the English-speaking world than was explicitly possible as an EU member – notably in working with Canada, Australia and New Zealand to promote the international rules-based order. But this should be complemented by more effective outreach to non-English-speaking countries, notably in support of trade and investment opportunities with emerging nations. But with them as with all the UK's interlocutors, the need to earn its place, and to show that it realises that, will be vital. In defence and security, the UK will continue in its commitment to the strength of NATO as its essential alliance under US leadership, while also liaising carefully with EU Member States as they seek to improve their own capacities to contribute to European security. But it cannot simply rely on old institutional structures. It needs to lead, for example by playing a stronger role in the control of non-military forms of aggression, such as cyber warfare, economic sanctions, rivalry in space, and commercial espionage. A strategy for realising the UK's interests in the international arena will require the Prime Minister's constant attention, but also a specific mandate for a very senior minister to supervise the interlinked policy areas of foreign affairs, international development, and international trade within a single government department. [ABSTRACT FROM AUTHOR]

Executive Summary: Services are simultaneously the most important sector of the UK economy and the sector facing the biggest challenge as a result of Brexit. The prospective departure from the European Single Market reduces the UK to the status of '3rd country' in respect of services. Accessing the internal market will depend on both subjective and objective conditions that differ from sector to sector, requiring detailed and highly specific arrangements for such industries as aviation and financial services. In practice, the EU can be expected to use these circumstances to discourage the UK from significantly diverging from European regulatory norms, as a matter of policy. In view of the weakness of, and uncertainty surrounding, international moves to oversee, let alone to further liberalise, trade in services, Brexit will thus leave the UK's services sector – and especially financial services – uniquely isolated and exposed. The government will hence need to consider carefully the costs of decisions to diverge from EU regulatory standards, and should be giving great priority to establishing clear objectives for close cooperation between the UK and the EU policy makers and regulators. [ABSTRACT FROM AUTHOR]

Executive Summary: The UK faces no easy options in determining how to develop its approach to international trade post-Brexit. If it finally decides to leave the European Customs Union and Single Market, it faces the possibility either of simply crashing out of the EU without a deal; trying to form market-access agreements and Free Trade Areas (FTAs) with the EU and other countries; or unilaterally reducing tariffs and liberalising trade with all countries. Each course raises significant practical difficulties, and entails major disadvantages compared with staying in the Customs Union and Single Market. The economic costs of a 'no-deal' approach stand to be very large, including inevitable tariffs, obstruction of UK access to EU markets, physical disruption at borders, a damping of investment and the much-discussed problem of the Irish border. Assuming 'no-deal' does not happen, negotiating FTAs with other countries would be possible only after a lengthy transition period, as in the Withdrawal Agreement voted down in Parliament, and would depend on the shape of the ultimate post-Brexit trading relationship between the EU and the UK. The process would be difficult, costly, and protracted; would likely be concluded on disadvantageous terms; would be even harder to apply to trade in services; and would yield extremely small gains given the volume of UK non-EU trade that is already covered by FTAs. Finally, unilateral liberalisation, while ameliorating some of the drawbacks of the first two options, faces the same problems of loss of access to European markets and disruption to trade; and would entail severe economic pain with only very gradual gains. The UK needs to conduct a much more profound and considered debate on these issues before deciding to set aside the large benefits of membership of the Customs Union and Single Market for the significant difficulties and tenuous gains offered by the alternatives. Public debate on the economic effects of trade policy has so far lacked the detailed but necessary analysis of these questions. It seems essential to establish a national policy review institution, modelled on the Australian Productivity Commission, in order to stimulate such a debate. [ABSTRACT FROM AUTHOR]

We estimate that a Brexit deal that involved a smooth transition to a free trade agreement with the EU, as proposed by the Prime Minister, would ultimately lead the UK economy to be about 3½ per cent smaller than it would have been had the UK remained in the EU. According to our estimates, public sector net borrowing will be 3 per cent of GDP in 2020-21, 1 per cent of GDP higher than is consistent with the fiscal mandate set out by the previous Chancellor, Philip Hammond. At the same time, headline fiscal aggregates have been subject to significant data revisions, causing the net borrowing ratio to be higher relative to GDP and the net debt ratio to be lower. Net debt reached 80.3 per cent of GDP at the end of September, 1.2 percentage points of GDP less than a year earlier. With government investment running at around 2½ per cent of GDP we expect the government to remain in a net borrowing position of around 2 per cent of GDP beyond 2020. [Extracted from the article]

Research on anti-immigrant attitudes in the United Kingdom in the past has focused primarily on feelings of prejudice driven by local concentrations of ethnic minorities. The immigration debate, however, has arguably changed since the EU expansions and the economic crisis of the past decade. This paper tests whether public support for immigration restriction is empirically driven by factors such as resource scarcity and economic stagnation, skill supply of native and immigrant workers, and the origin of immigrants from poorer countries within and outside the EU. Survey data from the European Social Survey between 2002 and 2010 are matched with regional level indicators calculated using the UK Labour Force Surveys. Findings suggest that support for immigration restriction is higher in regions where more immigrants are unemployed, but lower in regions where more natives are unemployed for longer than a year. Both the origin and ethnicity of the immigrant population appear to play a role in immigration policy preferences among native respondents. [ABSTRACT FROM PUBLISHER]

Using a large panel of UK manufacturing firms over the period 2000–9, we consider how firms responded during the most recent financial crisis, estimating models for export market participation decisions and firm growth and survival. The results indicate that financial variables are highly important in predicting export market entry, especially in the midst of the global financial crisis. With respect to firm growth and survival, we find that starters and continuous exporters are more likely to perform well in and out of the crisis than non-exporters. [ABSTRACT FROM PUBLISHER]

This paper investigates whether intangibles might explain the UK productivity puzzle. We note that since the recession: (a) firms have upskilled faster than before; (b) intangible investment in R&D and software has risen whereas tangible investment has fallen; and (c) intangible and telecoms equipment investment slowed in advance of the recession. We have therefore tested to see if: (a) what looks like labour hoarding is actually firms keeping workers who are employed in creating intangible assets; and (b) the current slowdown in TFP growth is due to the spillover effects of the past slowdown in R&D and telecoms equipment investment. Our main findings are: (a) measured market sector real value added growth since the start of 2008 is understated by 1.6 per cent due to the omission of intangibles; and (b) 0.75 per cent per annum of the TFP growth slowdown can be accounted for by the slowdown in intangible and telecoms investment in the early 2000s. Taken together intangible investment can therefore account for around 5 percentage points of the 16 per cent productivity puzzle. [ABSTRACT FROM PUBLISHER]

Drawing on nationally representative data collected for two age cohorts in the UK, this paper a) assesses the effect of multiple independent socioeconomic risk factors in shaping the transition from school to work; and b) identifies potential protective factors enabling young people to beat the odds. By comparing experiences and findings across two cohorts we assess the generalisability of findings across contexts, i.e. the 2008 and 1980s recessions. The results show that some young people exposed to even severe socioeconomic risks avoid being NEET (not in education, employment or training). Factors that appear to reduce the cumulative risk effect in both cohorts include prior attainment, educational aspirations and school engagement, as well as the social mix of the school environment. [ABSTRACT FROM PUBLISHER]

The National Employment Savings Trust (NEST) is a new pension scheme that will be introduced for employees on modest incomes in the UK from 2012. This paper draws out the implications of the NEST, focusing upon low-paid employees and their employers using data from the Annual Survey of Hours and Earnings. The results suggest that the NEST will increase labour costs by between 0.6 and 0.8 per cent on average, and have a disproportionate effect on low pay industries and private sector firms employing fewer than 25 employees. The analysis highlights the potential role of the minimum wage to shield low pay workers from paying a share of the subsidies that the NEST will afford to its members. [ABSTRACT FROM AUTHOR]

The view that there is an ‘under-savings’ problem in the UK domestic sector has had an important bearing on the contemporary agenda for policy reform. This paper considers the temporal variation of household expenditure and disposable income described by micro-data observed during the past four decades (1971 to 2009). I find a very close correspondence between the growth of expenditure and disposable income over the sample period, with the implication that households have not offset the well-documented decline in occupational pension provisions during the period through increased private saving out of disposable income. [ABSTRACT FROM PUBLISHER]

The previous Labour government pledged to abolish child poverty and introduced a range of welfare reforms that emphasised the role of work as the primary route out of poverty. This culminated in the Child Poverty Act (2010) which commits all future governments to the abolition of child poverty. This paper examines New Labour's record on child poverty and examines the factors responsible for its change. While the welfare reforms of the late 1990s did increase work among families with children, this didn't translate into large falls in child poverty. Those entering work still relied on substantial increases in government benefits to lift them over the poverty line. The current coalition government has reaffirmed its commitment to the Child Poverty Act and is also emphasising the role of work. The lessons of the past decade cast severe doubt on whether the current coalition government strategy of promoting work will be any more successful in reducing child poverty. With planned benefit cuts in the pipeline we could well experience some substantial increases in child poverty over the coming years. [ABSTRACT FROM PUBLISHER]

Highlights from the article: The short-term outlook for the UK economy is very murky indeed, with a significant risk that a severe economic downturn will begin within the next six months. Given the lack of time to renegotiate the existing EU withdrawal agreement that has been rejected by the UK Parliament, and the perceived political imperative not to further delay EU exit, there is a significant risk that the UK will leave the EU on 31 October without a deal. The UK current account deficit widened by £6.3 billion to £30.0 billion in the first quarter, or 5.6 per cent of GDP; the fifth-highest quarterly deficit on record as a percentage of GDP. Net migration continues to add to the supply of labour but has remained stable since 2016 as a sharp fall in EU net migration has been offset by higher net migrant inflows from non-EU countries. With government investment running at around 2½ per cent of GDP we expect the government to remain in a net borrowing position of around 2½ per cent of GDP beyond 2020.

Recent studies have shown a strong link between the complexity of economies and their economic development. There remain gaps in our understanding of the mechanisms underpinning these links, in part because they are difficult to analyse with highly aggregated, official data sources that do not capture the emergence of new industrial activities, a potential benefit from complexity. We seek to address some of these gaps by calculating two indices of economic complexity for functional local economies (Travel to Work Areas) in Great Britain, and explore their link with these locations' economic performance. Seeking to gain a better understanding of the mechanism connecting economic complexity with economic performance, we create a measure of emergent technological activity in a location based on a combination of novel data sources including text from UK business websites and CrunchBase, a technology company directory, and study its link with economic complexity. Our results highlight the potential value of novel, unstructured data sources for the analysis of the links between economic complexity and regional economic development. [ABSTRACT FROM AUTHOR]

In an era of free movement UK employers have had ready access to a supply of labour from the European Union to fill low-skilled 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. Drawing mainly on evidence from employers on the role of migrant workers in selected sectors with a substantial proportion of low-skilled jobs, this article explores the challenges and opportunities they face in transitioning to a new post-Brexit immigration regime. [ABSTRACT FROM AUTHOR]

In this note, we argue that a considerable part of the explanation for the benign wage growth in the advanced world is the rise in underemployment. In the years after 2008 the unemployment rate understates labour market slack. Underemployment is more important than unemployment in explaining the weakness of wage growth in the UK. The Phillips curve in the UK has now to be rewritten into wage underemployment space. Underemployment now enters wage equations while the unemployment rate does not. There is every reason to believe that the NAIRU has fallen sharply since the Great Recession. In our view the NAIRU in the UK may well be nearer to 3 per cent, and even below it, than around 5 per cent, which other commentators including the MPC and the OBR believe. [ABSTRACT FROM AUTHOR]

We analyse the costs of Brexit. The results show that by 2030 a hard Brexit would reduce cumulative GDP growth by 18 percentage points compared to a situation where the UK continued its EU membership. The economic damage in our FTA and soft Brexit scenarios is less severe than in our hard Brexit scenario, although it will still cost the UK economy roughly 12.5 percentage points and 10 percentage points of cumulative GDP growth by 2030, respectively. We find much larger negative effects than most existing studies that use macroeconometric modelling to assess the effects of Brexit. This is due to two reasons. First, we use an improved tariff version of the macroeconometric model NiGEM, which enables us better to assess the negative impact of cost-push inflation resulting from imposed trade barriers. Second, we estimate a new productivity model for the UK, which allows us to gauge adequately the negative UK-specific effects on productivity caused by Brexit. [ABSTRACT FROM AUTHOR]

In this note, we focus on underemployment as a potential cause of lower wage growth, which itself may have deeper causes, but which has, we would argue, demonstrably changed since the 2008 recession. The gap between our measures of the number of additional hours required by those who want more hours and the number who want less has narrowed recently. Neither have returned to their pre-recession levels. In our view, underemployment remains a major factor in explaining the 2 per cent wage norm that continues to exist in the UK. [ABSTRACT FROM AUTHOR]

The value of exports to the domestic UK economy does not equal gross export flows, as some of the value-added within UK exports may have been generated abroad. For key business and financial service industries we present new and initial estimates giving a lower bound for the value-added component of exports generated directly by the domestic exporting sector, called the direct domestic value-added component of exports. Our initial estimates suggest that at least 38 per cent of UK monetary financial institutions (MFIs) exports in 2016 was direct domestic value-added amounting to £14.6bn, of which £5.0bn came from exports to the EU. These initial estimates suggest that approximately 80 per cent of accountancy and legal services exports in 2014 were direct domestic value-added amounting to £1.7bn and £5.2bn respectively, of which £500mn and £1.7bn came from exports to the EU respectively. [ABSTRACT FROM AUTHOR]

I discuss six tools available to monetary policy makers. Three of these have been used since the inception of central banking. Three are new and were introduced in the aftermath of the 2008 financial crisis. I argue that, when the UK Monetary Policy Committee raises the interest rate, it should maintain a large balance sheet that consists of both risky and safe assets. Further, the Bank should trade the risk composition of its balance sheet to promote the stability of asset prices. [ABSTRACT FROM AUTHOR]

The financial crisis has led to a change in the mix of capital and labour employed in the UK and a sharp decline in total factor productivity. This has meant that labour productivity has not recovered to any great degree since the financial crisis. We explore the role of overall and sectoral productivity in explaining the fall in labour productivity, but also question the extent to which productivity in the service sector may be measured with error. We outline the links between a constrained financial sector and a fall in overall productivity – in which intangible capital seems to play an important role – and illustrate how a financial sector providing intermediate services may act to amplify the business cycle impetus from a total factor productivity shock within the context of a calibrated model. [ABSTRACT FROM AUTHOR]

A defining feature of (at least) the last three general elections has been the emphasis placed on each political party's fiscal credibility and their ability to deliver “sound public finances”. Applying the logic of household book-keeping, balancing the fiscal budget is said to capture such soundness. There is, however, little evidence that a balanced budget is necessarily sound. Instead, the evolution of public finances depends on (1) both the fiscal choices made on the level of spending and taxation, (2) the underlying growth of the economy which depends on far more than the fiscal decisions, and (3) interest rates on government debt and the financing needs of the government. As the economic situation changes, so too does the likely path of debt to GDP and hence the possible fiscal options open to a country. Sticking to the soundbite of “sound finances” has often distracted from the underlying menu of political choices and as such is a disruptive narrative in UK economics today. [ABSTRACT FROM AUTHOR]

The British people voted for Brexit for a variety of reasons. A literature is emerging that seeks to explain the outcome using the increasing amount of aggregate and individual data being generated. Less often considered is the impact those factors that shaped the referendum outcome might continue to exert on the debate about the UK's future relationship with the EU. We argue that they will continue to weigh on political debates. The continued resonance of the Leave message militates against anything but what has come to be known as a ‘hard Brexit’. [ABSTRACT FROM AUTHOR]

The production of this forecast is supported by the Institute's Corporate Members: Bank of England, HM Treasury, Mizuho Research Institute Ltd, Office for National Statistics, Santander (UK) plc and by the members of the NiGEM users group. [ABSTRACT FROM AUTHOR]

The article focuses on the public sector's function as it affects the overall economy in Great Britain. Public sector represents a sizeable portion of most industrial economies and 38.5 percent of its GDP in 2004-2005. According to the author, malfunctioning public sector affects the overall performance of the economy both through direct contribution of the goods and services produced by the nation and its direct impact on other sectors through the provision of a well educated workforce.

The production of this forecast is supported by the Institute's Corporate Members: Bank of England, HM Treasury, Mizuho Research Institute Ltd, Office for National Statistics, Santander (UK) plc and by the members of the NiGEM users group. [ABSTRACT FROM AUTHOR]

The article discusses the economic conditions of Great Britain. It mentions that impact of Great Britain's decision reagrding the exit from European Union on its economy, and states the decline in gross domestic product (GDP). It also mentions the decline of interest rate and exchange rate after the exit of Great Britain from European Union.

The article reflects on issues concerning the housing market across Great Britain. Topics discussed include an expected increase in the number of households and dwellings according to the Office for National Statistics (ONS) of Great Britain, issues concerning servicing and repaying the public debt, and impact of long-term income on increasing prices of houses.

The author examines the British government's fiscal plan for the 2015-2020 Parliament. He notes the move of the Office of Budget Responsibility (OBR) to revise its forecasts for tax revenues and presents the Treasury's objectives for fiscal policy and proposed new fiscal rules. He also claims that the government's surplus target for the period 2019-2020 will remain unless the nation's gross domestic product (GDP) falls below one percent.

An introduction to reports published within the issue is presented, including how public finances redistribute resources between the constituent nations of Great Britain, a comparative analysis of interviews of the lead actors in City Deals, and the English vote for English laws (EVEL).

The article comments on the impact of the labor market slack on the economy of Great Britain. Topics discussed include the view that the Bank of England's Monetary Policy Committee (MPC) is randomly reducing its estimate of the impact of long-term unemployment and underemployment, the view that the labor market in the country is far from full employment as compared to the calculation of MPC, and effects on wages.

What policies and institutions are needed to sustain long-run growth in the UK? We describe an optimistic story of the UK economy over the past 30 years. From the late 1970s, the UK reversed a century of relative decline in terms of per capita GDP with our main counterparts in the US, France and Germany. A key factor behind this improvement was an array of policy changes including an expansion of higher education and greater competition in product and labour markets. However, major weaknesses with respect to long-run investment in human capital, infrastructure and innovation remain. These are hampered by problems of short-termism and policy risk. We propose a series of radical reforms to address these problems: such as more flexibility in schooling with a new focus on disadvantage; a new architecture for national infrastructure decisions and more competition in banking. [ABSTRACT FROM PUBLISHER]

The effects of working part time on job downgrading and upgrading are examined over the life course of British women born in 1958. We use longitudinal data with complete work histories from a large-scale nationally representative cohort study. Occupations were ranked by their hourly average earnings. Analyses show a strong link between full-time/part-time transitions and downward and upward occupational mobility over the course of up to thirty years of employment. Probabilities of occupational mobility were affected by women's personal traits, occupational characteristics and demand-side factors. Downward mobility on moving from full-time to part-time work was more likely for women at the top levels of the occupational hierarchy working in male-dominated or mixed occupations and less likely in higher occupations with more part-time jobs available. [ABSTRACT FROM PUBLISHER]

Age at entry to motherhood is increasingly socially polarised in the UK. Early childbearing typically occurs among women from disadvantaged backgrounds relative to women with later first births. The Millennium Cohort finds differentials in their children's development, cognitive and behavioural, at age 5, by mother's age. These could be due to difficulties facing immature mothers, but much of it is attributable to young mothers’ social origins, or inequalities apparent at the age 0 survey, which may also have had earlier origins. The developmental penalty left to be attributed to the mother's age per se is, at most, modest. [ABSTRACT FROM PUBLISHER]

The article presents an outlook for fiscal consolidation in Great Britain through 2017. Included is a chart detailing Britain's fiscal consolidation plans during the forecast period. It notes that the effects of quantitative easing/credit easing measures are hampered by low interest rates on risk-free assets. Predictions on the impact of the fiscal programme on output, employment, and liquidity are also provided, as well as the hysteresis effects.