Monetary policy· Economy and public finances· Tax· Macroeconomic policy· Political parties and elections Talking tax What’s been said and what’s gone unsaid in the Conservative leadership election? 26 July 2022 by Torsten Bell and Adam Corlett Elections are rarely entirely about a single issue, but there are exceptions. Brexit in the 2019 general election stands out, and today tax cuts totally dominate the 2022 Conservative leadership election. Judging by last night’s TV debate, the contest is staying that way, with little discussion of the huge questions facing the country, from the … Continued READ MORE
Living standards· Inequality & poverty The Living Standards Audit 2022 4 July 2022 by Adam Corlett and Felicia Odamtten and Lalitha Try This report, the 14th in an annual series, takes a long view of what has happened to household incomes in Britain over recent decades, what has driven periods of growth and stagnation, and the lessons that need to be learned if Britain is to return to stronger income growth in the decade ahead. The report … Continued READ MORE
Monetary policy· Fiscal policy· Macroeconomic policy Crunch time Bank of England raises rates again and signals cost of living crisis is set to deliver a £1,200 hit to incomes 5 May 2022 by Adam Corlett and Jonathan Marshall and James Smith Today the Bank of England’s Monetary Policy Committee raised rates at a fourth successive meeting – a first in the 25 years since it was granted independence – to 1 per cent, a level not seen since the financial crisis. The direct impact of this change in rates on households will be small in the … Continued READ MORE
Budgets & fiscal events· Economy and public finances· Tax Happy new tax year? National Insurance and Income Tax changes in 2022 3 April 2022 by Adam Corlett The start of the new tax year brings with it one of Rishi Sunak’s major tax reforms: the rise in National Insurance, announced last September and linked to additional support for the NHS and social care. This spotlight explores what this rate rise – together with freezes in the Income Tax personal allowance, the newly-announced … Continued READ MORE
Living standards· Incomes· Prices & consumption· Inequality & poverty Stressed out April brings an acute squeeze on UK living standards as higher energy bills lead to widespread fuel stress 1 April 2022 by Adam Corlett and Jonathan Marshall April 2022 will see the UK’s cost of living crisis intensify as energy prices jump by more than half overnight, pushing 5 million English households into fuel stress, even accounting for support measures recently announced by the Chancellor. This is not the end, though. Against a backdrop of the highest inflation rate in 40 years … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances Inflation Nation Putting Spring Statement 2022 in context 24 March 2022 by Torsten Bell and Mike Brewer and Adam Corlett and Sophie Hale and Karl Handscomb and Lindsay Judge and Jack Leslie and Jonathan Marshall and Louise Murphy and Krishan Shah and James Smith and Hannah Slaughter and Greg Thwaites This briefing note provides an assessment of the measures announced in the March 2022 Spring Statement. The Chancellor approached this with the highest inflation in 40 years and the worst income squeeze on record lying ahead of us. Against that backdrop, and with plenty of fiscal ammunition (thanks to the Office for Budget Responsibility’s (OBR’s) … Continued READ MORE
Budgets & fiscal events· Economy and public finances· Tax Softening the blow Looking ahead to Spring Statement 2022 21 March 2022 by Adam Corlett and Torsten Bell Faced with the highest inflation in at least three decades, the upcoming Spring Statement is bound to provide more support for households. But the precise set of choices – which could include support via Fuel Duty, benefits or National Insurance – will play an important role in determining the force of the cost of living … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances Catch 2022 Spring Statement 2022 preview 14 March 2022 by Adam Corlett and Karl Handscomb and Jack Leslie and Jonathan Marshall and Felicia Odamtten and James Smith Ahead of the 2022 Spring Statement, we preview the economic and fiscal outlook and discuss the key decisions that the Chancellor will face. The Chancellor comes into the Spring Statement with good news since the Autumn. The strongest peacetime growth in a century means the economy is around half a per cent larger, and around … Continued READ MORE
Living standards The Living Standards Outlook 2022 8 March 2022 by Adam Corlett and Lalitha Try Our fourth Living Standards Outlook explores the prospects for household incomes over both the near-term, as rising inflation causes a cost of living crisis, and the longer-term, based on the latest economic forecasts. READ MORE
Economy 2030 Shrinking footprints The impacts of the net zero transition on households and consumption 1 March 2022 by Adam Corlett and Jonathan Marshall The 2020s are set to bring a step change in climate policy, with efforts to decarbonise the UK economy beginning to impact on household consumption to a greater extent than before. Different households will be exposed to these changes in different ways, but they will come in two flavours: upfront investment now to deliver savings … Continued READ MORE
Public spending· Prices & consumption· Inequality & poverty· Economy and public finances The price is right? The April 2022 energy price rise and the Government’s response 4 February 2022 by Adam Corlett and Karl Handscomb and Lindsay Judge and James Smith The Government has opted for universalism and minimising the hit to the public purse in its response to the energy price rise yesterday. The announced measures take the sting out of Ofgem’s £693 rise in the energy price cap in April with a broad-based package of support. All households will get a £200 discount on … Continued READ MORE
Living standards· Prices & consumption Higher and higher Averting a looming energy bill crisis 17 January 2022 by Adam Corlett and Lindsay Judge and Jonathan Marshall The higher energy price cap due to be introduced on April 1 will see energy costs jump by more than 50 per cent overnight. As a result, the share of English households experiencing ‘fuel stress’ (i.e. spending more than 10 per cent of their household budget on energy) will triple from 9 per cent to … Continued READ MORE
Labour Market Outlook· Labour market Labour Market Outlook Q4 2021 Wages and the cost of living in 2022 29 December 2021 by Torsten Bell and Adam Corlett and Jonathan Marshall and Hannah Slaughter The final three months of 2021 have been a mixed bag for the pandemic and the labour market. At the end of September, the Coronavirus Job Retention Scheme (JRS) came to an end after 18 months – and the feared rise in unemployment does not seem to have come to pass. But the emergence of … Continued READ MORE
Wealth & assets Home county Options for taxing main residence capital gains 9 December 2021 by Adam Corlett and Jack Leslie Over the past 30 years, the total value of household wealth in the UK has risen from three times national income to well over seven times. Inflation-beating house price growth and high ownership rates have combined to add around £3 trillion of housing wealth from main residences to that total – accounting for around a … Continued READ MORE
Housing Hope to buy The decline of youth home ownership 2 December 2021 by Adam Corlett and Felicia Odamtten This briefing note explores how the home ownership fortunes of those aged 25 to 34 have changed over time. Owning one’s home is an enduring preference for the majority of families in the UK, but today’s young people face a more serious set of hurdles to overcome than previous generations if they want to turn … Continued READ MORE
Incomes· Living standards· Economic growth Are you better off today? Real income growth under different governments since 1955 3 November 2021 by Adam Corlett In the 1980 presidential contest between the incumbent Jimmy Carter and Ronald Reagan, the latter asked voters “Are you better off today than you were four years ago?”. Although far from the only question that voters do or should ask, it is a reasonable question. In the UK, since 1955, real household disposable income per … Continued READ MORE
Budgets & fiscal events· Social care· Public spending· Economy and public finances To govern is to choose The choices facing the Chancellor this autumn 6 September 2021 by Torsten Bell and Adam Corlett and Daniel Tomlinson The Chancellor has not had a quiet introduction to national policy making: overseeing 17 major fiscal announcements in as many months. This summer provided the first lull, driven by the success of vaccines and the understandable focus on Afghanistan. But the quiet phase is coming to an end. Alongside dealing with whatever new paths the … Continued READ MORE
Social care· Tax A caring tax rise? The impacts of a potential increase in National Insurance 21 July 2021 by Torsten Bell and Adam Corlett The Government intends to increase social care spending and is considering its options, having delayed a decision until the Autumn. They are 100 per cent right to do so. One option under consideration is raising National Insurance to make that possible. They are 100 per cent wrong to do so – because the far superior … Continued READ MORE
Living standards The Living Standards Outlook 2021 18 January 2021 by Mike Brewer and Adam Corlett and Karl Handscomb and Daniel Tomlinson In the Living Standards Outlook, we assess how the hoped-for post-pandemic economic recovery might translate into a recovery for living standards. Focusing on working-age households, we provide projections for household disposable incomes across the income distribution through to 2024-25. READ MORE
Living standards· Inequality & poverty Improving our understanding of UK poverty will require better data 6 January 2021 by Adam Corlett Policy makers across the political spectrum want to improve the living standards of the UK’s poorer households. The Leader of the House of Commons recently stated that “We are committed to our manifesto pledge to reduce child poverty”, while the last Labour manifesto pledged to “eradicate in-work poverty”. So statistics about poverty matter. We need … Continued READ MORE
Covid-19· Fiscal policy· Economy and public finances· Tax· Macroeconomic policy Unhealthy finances How to support the economy today and repair the public finances tomorrow 11 November 2020 by George Bangham and Adam Corlett and Jack Leslie and Cara Pacitti and James Smith This report provides analysis of the dual challenges faced by the government: ensuring that there is sufficient fiscal support through the crisis and recovery, and setting fiscal policy on a sustainable long-term path. Some argue it is unsustainable to provide the massive government support during the crisis, while others see little constraint on government borrowing … Continued READ MORE
Universal Credit· Welfare Death by £1000 cuts? The history, economics and politics of cutting benefits for millions of households next April 2 October 2020 by Torsten Bell and Adam Corlett and Karl Handscomb The first Conservative Conference of a new parliament begins. It comes on the back of a surprisingly emphatic election win, but with rumblings beginning about the Chancellor’s plan to take £1,000 away from millions of low-income households in just six months’ time. At that conference it is George Osborne, not Rishi Sunak, that gets up … Continued READ MORE
Covid-19· Economy and public finances The Winter (Economy Plan) is coming Chancellor ramps economic support back up, but avoidable design flaws will limit its success in stemming the Autumn rise in unemployment 25 September 2020 by Torsten Bell and Mike Brewer and Adam Corlett and Karl Handscomb and Lindsay Judge and James Smith and Daniel Tomlinson Economic policy yesterday caught back up with the ramping back up of social distancing restrictions by the Prime Minister earlier in the week. The Chancellor rightly announced new measures rather than sticking to plans to phase out help for workers and firms. His most significant policy was the Job Support Scheme (JSS), an extended, … Continued READ MORE
Covid-19· Living standards The Living Standards Audit 2020 21 July 2020 by Daniel Tomlinson and Adam Corlett and Karl Handscomb and Charlie McCurdy and Mike Brewer This report provides an estimate of living standards in lockdown Britain, placing them in the context of a poor decade for incomes. It looks at how different groups have fared before and during lockdown, and explores upcoming risks for household incomes. READ MORE
Incomes· Inequality & poverty· Wealth & assets· Tax Who gains? The importance of accounting for capital gains 21 May 2020 by Adam Corlett and Arun Advani and Andy Summers This report looks at what we know about taxable capital gains; how our understanding of top income shares changes if we include capital gains in our analysis; and whether official statistical definitions of income should be changed or supplemented. READ MORE
