Clickbait, consultants and cloudy forecasts 1 August 2025 Afternoon all, Giles Wilkes here – no, I’m not the new Chief Executive of RF, but have been given the great responsibility of guest editing ToTC while Ruth is away this week. I have a habit, as I slog through the week’s economic news, of filing everything into a good or bad news bucket. Recently, either things have become truly terrible, or some algorithm has decided that I love miserable stuff about missed forecasts, flagging recoveries and stubbornly high prices. That first bucket feels empty. It is time to fix the algorithm. Those of us with long memories can recall when things did seem to get better. And always remember that there is life beyond your filter bubble. It has been a great honour to guest-edit Top of the Charts. Kudos to the great team who do the real work, and all of you – have a great weekend. Giles Senior Fellow at the Institute for Government Specialist partner at Flint Global recovering Special Adviser Everything in moderation. Moderating unsavoury online content is a good thing, right? Right!? Well, it might have some unintended consequences. This paper models real-world observations of how online platforms adjust to increased moderation (I have personally noticed how virulently even a herbivorous environment like BlueSky can react to occasional right-leaning posts). Though designed to target toxic content, moderation can suppress the benign sort that’s simply out of sync with the majority. Good news for the majority, perhaps (who suffer less ideological disquiet from dissonant views), but it can “systematically disadvantage ideological minorities”. A feedback loop begins: people with minority views receive less reward for posting, which further polarises content and discourages them. Can we have a free marketplace of ideas without giving nasty folks unlimited access to the megaphone? Perhaps… the authors note that well-targeted moderation (which can distinguish between minority ideology and toxicity) is “win-win-win” – good for creators, readers and the platform itself. How hard can it be? Call in the consultants. It’s easy to make consultants the butt of the joke – like lawyers – but do we deserve it? I was relieved to see research which found that consultants increased value added per worker by 3.6 per cent over five years. The analysis (based on administrative data from Belgium 2002-2023) made use of universal business-to-business transaction data to overcome the pesky limitations created by confidentiality. Interestingly, this pattern emerged after an initial *dip* in productivity – perhaps linked to the small uptick in dismissal rates that consultants tend to engender. But employees at client firms see persistently higher wages (an increase of 2.7 per cent), while labour’s share of value added remains constant, suggesting “productivity gains do not come at workers’ expense”. I knew they were paying me for something. Wage floor worries. Disabled people in the UK have worse employment outcomes, as the Government is well aware. Worryingly, this American research finds that minimum wage increases might create adverse effects for some people with cognitive disabilities. A one-dollar rise in the minimum wage led to a 2.5 to 5.1 per cent fall in employment among this demographic, with larger effects focused on younger and lower-educated people. This may be down to people with cognitive disabilities being more likely to be in lower-paid jobs, with lower levels of educational attainment, exposing them to risk if a higher minimum wage reduces the demand for low-paid jobs. It’s clear that connecting disabled people to a broader range of employment opportunities is key to reducing inequalities in labour market outcomes. Courting for clicks. ‘Digital media’ is fast becoming the default – but the processes determining the content we’re served remain disconcertingly opaque. As any economist will tell you, you should start by looking at the incentive structure. With this in mind, researchers studied a Kenyan digital news outlet to see how topics covered and tone chosen were affected when journalist pay was linked to “performance”. Journalists were given the choice between being rewarded for each article or being “paid per click” (PPC – confusingly determined by views). Articles written under PPC contracts received three-times as many views, but their authors produced fewer articles. Despite earning more per article, these journalists saw a 49 per cent drop in earnings – boosting their outlet’s traffic and cutting its wage bill in one fell swoop. This was down to how the PPC contracts were structured – no pay for pieces with fewer than 400 views, and a tapering rate on the more popular articles. Notably, the material written under this system shifted in both content and tone. Topics became less local and more political, the language more negative and toxic. If you’ve noticed your favourite newspaper becoming more shrill, divisive and alarmist, perhaps look to the financial incentives before laying the blame on the editing. Diversity dividend. Will house buyers will pay a premium to live in more diverse postcodes? This analysis is limited in scope – focusing on transactions in Northern Ireland (NI) in the period 2021-2025, where diversity mostly means religious diversity. Within this context, a one standard deviation increase in neighbourhood-level multiculturalism raises house prices by 9.6%, or roughly £10,385. This might be down to diversity increasing the pool of potential buyers. These findings make for an interesting dialogue with RF’s analysis earlier this year that found that people from ethnic minorities tend to pay more for lower-quality housing. This may be in part because they’re willing to pay a premium to live in diverse neighbourhoods where they have an established community. Chart of the week For the fiscally inclined, times have been demoralising for so long that a whole generation of economists expect every forecast to prove too optimistic. With a gloomy Budget coming up this autumn, I challenged myself to recall sunnier times. When, exactly, did things only get better? My instinctive guess was the 1990s. I have often bored a younger audience with a memory from 1993 of my undergraduate tutor warning us that deficits were bad, getting worse and never likely to shrink. Yet within five or six years, the Government recorded a *surplus*. So don’t give up hope! Chart of the Week (c/o OBR Historical Forecast database) fleshes out this intuition. Alas, my memory was right, if selective. 1993 was a banner year, but an island of hope in a sea of gloom. Borrowing was forecast to be 3.8 per cent of GDP but, after a glorious expansion that few expected, it came in around 3 percentage points better (as you can see in the green arrow for 1998). Unfortunately, it hasn’t happened since. The latest OBR forecast evaluation report indicates that the five-year-ahead forecast underestimates borrowing as a share of GDP by a whopping 3.1 percentage points on average. The main culprit is clear: forecasts for GDP growth have consistently been higher than the outturn, overestimating five-year cumulative growth by an average 2.2 percentage points. It’s this GDP disappointment that makes Chancellors dread the falling of the leaves. So, sure, sometimes things do turn out better than expected. But not since John Major was PM, the Internet made a funny burbling noise, and houses in London cost £81,000.
