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The UK's automotive industry has been one of the ‘star performers’ of the UK economy in recent years – unlike most other manufacturing sectors. Output has increased by over 60 per cent since 2010 and there has been over £8 billion worth of investment in the industry in the past five years. The industry supports some 800,000 jobs in the UK. It is seen as having benefitted from EU membership. So what might Brexit mean for the UK automotive sector, and its workers? This paper considers short-run impacts, before turning to the impact of uncertainty on foreign direct investment inflows and then the nature of a possible trading relationship. Some brief reflections on policy implications round off the paper. [ABSTRACT FROM AUTHOR]

This paper studies local economic impacts of the increases in trade barriers associated with Brexit. Predictions of the local impact of Brexit are presented under two different scenarios, soft and hard Brexit, which are developed from a structural trade model. Average effects are predicted to be negative under both scenarios, and to be more negative under hard Brexit. The spatial variation in negative shocks across areas is higher in the latter case as some local areas are particularly specialised in sectors that are predicted to be badly hit by hard Brexit. Areas in the South of England, and urban areas, are harder hit by Brexit under both scenarios. Again, this pattern is explained by sector specialisation. Finally, the areas that were most likely to vote remain are those that are predicted to be most negatively impacted by Brexit [ABSTRACT FROM AUTHOR]

The UK, with its relatively liberal immigration policies following recent enlargements, has been one of the main recipients of migrants from new EU member states .This paper poses the questions: what is the effect of immigration on a receiving economy such as the UK? Is the effect beneficial or adverse for growth? Does emigration have brain drain effects on sending economies? How differently would skilled (or unskilled) migration affect both receiving and sending economies? What factors would contribute to immigration/emigration benefits/costs and economic growth driven by migration? Who are the winners and losers in both the sending and host regions? We utilise a two-bloc endogenous growth model with labour mobility of different skill compositions to address these questions. We show that migration, in general, is beneficial to the receiving country and increases the world growth rate. With remittances, the sending country in aggregate can also benefit. The only exception is in the case of unskilled migration, which can actually have a detrimental impact on the world growth rate. This possibility however seems to be unlikely by our examination of migration trends. Winners are migrants, and the skill group in the region that sees its relative size decrease. [ABSTRACT FROM AUTHOR]

While there may be an important, but transitory, cyclical component in the poor performance of the past decade, we will emphasise the secular forces: the impact of demographic structure and innovation. We draw on the empirical and theoretical work reported in Aksoy, Basso, Smith and Grasl (2015), ABSG, about the impact of changes in demographic structure on macroeconomic outcomes. This suggests that changes in age profile not only have significant implications for savings, investment, real interest rates and growth but also for innovation. The size of the effects seems plausible. For instance, if in 2015 the UK had the 1970 age structure, it would have added 0.68 percentage points to the long-run annual growth rate. The model suggests that the population ageing predicted for the next decades will tend to reduce output growth and real interest rates across OECD countries. [ABSTRACT FROM AUTHOR]

This paper reviews UK supply-side policies since 2010 in terms of their impact on growth and considers medium-term growth prospects in the context of the puzzle of disappointing post-crisis TFP performance. It is argued that there is no reason to believe that growth prospects have deteriorated significantly compared with the pre-crisis period. Changes in policy under the Coalition government are unlikely to have made a big difference to growth potential. On the one hand, this means opportunities for radical reform have been ignored; on the other hand, there has been no repeat of the 1930s’ debacle. [ABSTRACT FROM PUBLISHER]

There is an enduring belief by UK policymakers that a large higher education sector is an important driver of long-run economic growth, which has been part of the narrative since the Robbins Report. Back then, there was plenty of conjecture and assumption, but strikingly little concrete evidence to support such a belief. This paper asks whether the evidence base has strengthened in the 50 years since it was published. It looks at a number of different growth equation specifications and, using international education data, attempts to draw out the contribution of both the number of, and the growth in, graduates since the 1960s. There are three main findings. Firstly, many growth relationships, including those estimated elsewhere in the literature, are quite sensitive to the countries included – which often depends on the variables used – and time period of analysis. I argue that, given these issues, growth equations should always be treated with caution. Secondly, and remembering this caveat, neither the increase nor the initial level of higher education is found to have a statistically significant relationship with growth rates both in the OECD and worldwide. This result is robust to numerous different specifications. Thirdly, there is some evidence, consistent with the existing literature, that levels of technical skills at the end of compulsory education matter. The employment of higher level technical skills (proxied by the number of employed researchers in an economy) is also a strong predictor of growth. This gives a possible mechanism linking the output of (some) of the higher education sector with economic growth. However, it does not imply that mass higher education necessarily leads to higher growth. This depends on the skills produced by an expanding tertiary sector and their utilisation (or underutilisation) in the jobs available to increasing numbers of graduates. [ABSTRACT FROM PUBLISHER]

Alternative measures of the UK output gap are considered for 1984-2007. The real-time series is strongly affected by the rolling-time estimation of the trend, and produces a picture of the business cycle which is not consistent with contemporary perceptions of the large fluctuations of the late 1980s and early 1990s. A new, 'nearly-real', measure developed here may be better for estimating historical reaction functions. In the context of the current recession, none of these mechanically derived measures of the output gap are useful. Policymakers should make careful estimates of the likely fall in potential output on the basis of other information. [ABSTRACT FROM AUTHOR]

This paper evaluates the probability density forecasts reflected in the Bank of England's real GDP growth fan charts. Evaluation is carried out using tests that allow for data dependence and using two GDP growth estimates. Results suggest there are problems with the shorter horizon forecasts, but conclusions about the performance of longer-term forecasts depend to some extent on the GDP estimates used in the assessment. [ABSTRACT FROM AUTHOR]

Evaluates the trends in investment and economic growth in Great Britain. Assessment on economic costs; Assessment on the living standards of the public; Interrelation of international trade and investment with economic performance.

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]

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]

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 article discusses the economic prospects for Great Britain. Its economy is expected to expand by 1.3% in 2011 with growth rising to 2% per annum in 2012. Estimated trend rate of growth is 2.1% and economic growth above the trend rate is expected only by 2013. In the absence of fiscal tightening, economic growth is estimated to be around 0.8 percentage points higher. It indicates that its gross domestic product (GDP) growth is constrained by planned fiscal consolidation from 2011 to 2015.

The article discusses economic forecasts for Great Britain in 2011 and 2012. Yearly growth rate is predicted to escalate to 2% in 2011 and 2.25% in 2012. General government spendings is expected to drop about .75% from gross domestic product growth in 2011 and 2012. In 2011, growth in employment is anticipated, but will be inadequate to absorb hikes in the labor force. Forecasts for prices and earnings, demand, household sector, supply, public finances and accumulation are discussed.

In this article the authors discuss the forecast and trends of the economy amid the global economic recession in Great Britain from 2004 to 2013. They note declines in the gross domestic product (GDP) and the production index. They forecast an overall increase by 1% on the economy of the region. Furthermore, they consider the cutback of the value added tax (VAT) and inventory as drivers for the economic growth of the country.

The article discusses the potential decrease of the economy in the Euro Area. It highlights the shrinking of the economy in Euro Area by 1.6 percent on quarterly basis. It noted the decrease of economic activity in the first quarter of 2009. It emphasizes that the forecast on the decline of economy came from both public and private sectors. The article also presents various charts and diagrams depicting the economic activity in the Euro Area including the contribution of stockbuilding to the growth of gross domestic product (GPD), inflation expectation and the prospects for the European Union.

The article forecasts the economic condition in Great Britain for 2009. The economy of the country is expected to worsen due to the weak performance of its domestic banking system. The problems on the access to credit for households and non-financial companies are projected to end. Gross domestic product (GDP) growth will decline by 5.8%, as well as the distribution output by 2.4%. Economic growth is estimated to deteriorate as a result of the worsening of the availability of credit within the country.

An overview is provided of the issues raised in the recent literature on the use of reaI-time data in the context of nowcasting and forecasting UK macroeconomic events. The ideas are illustrated through two specific applications using UK real-time data available over 1961-2006 and providing probability forecasts that could have been produced in real time over the past twenty years. In the first, we consider the reliability of first-release data on the components of UK aggregate demand by looking at forecasts of the probabiIity of substantial data revisions. In the second, we consider the estimation of the output gap, illustrating the uncertainty surrounding its measurement through density forecasts and focusing on its interpretation in terms of inflationary pressure through an event probability forecast. [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, the Office for National Statistics, Santander (UK) plc and by the members of the NiGEM users group. [ABSTRACT FROM AUTHOR]

The article presents an overview of the national monetary policies of countries around the globe. It maintains its forecast of a 50 percent chance of recession in Great Britain and a 30 percent probability of recession in the euro area. It predicts a 1.9 percent economic growth in the U.S. and Canada and 1.8 percent growth in Japan. It discusses the possible resolution to the euro area crisis.