Living standards 2015: The outlook for living standards – sunshine and clouds ahead 28 December 2014 by Gavin Kelly The economic recovery gained momentum in 2014, though it failed to feed through into raised living standards as much as many hoped. There are reasons for being fairly optimistic that this could start to change next year. Underpinned by the buoyant jobs market we expect household disposable incomes – the best measure of living standards … Continued READ MORE
Living standards· Incomes· Labour market What’s in store for household incomes in 2015? 27 December 2014 by Matthew Whittaker The 2015 election has been billed by many as the ‘living standards election’, meaning that we can expect much debate in the coming months on just how households are faring and whether economic growth is translating into income growth. To date though, most attention has focused on wages instead of incomes. The six-year real-terms pay … Continued READ MORE
Pay Could we be set for two decades of lost pay growth? 12 December 2014 by Matthew Whittaker Rarely have questions of household living standards and the shape of the public finances been so interwoven. The Autumn Statement – or, more specifically, the OBR’s Economic and Fiscal Outlook – identified a £25bn shortfall in tax revenues by 2018-19 relative to the projections in place at the time of Budget 2014. This is a … Continued READ MORE
Housing Households have been coping remarkably well with high housing costs, but interest rate rises lurk just around the corner 10 December 2014 by Laura Gardiner The lack of affordable housing, particularly in London and the South East, is one of Britain’s most-told misery stories. But less is known about how these challenges differ for various household types and, perhaps more importantly, how people cope with them. New research by the Resolution Foundation seeks to deal with both of these questions. … Continued READ MORE
Public spending· Economy and public finances· Political parties and elections Assessing the post-election implications of the parties’ different fiscal stances 5 December 2014 by Matthew Whittaker Our recent briefing note In The Balance set out some indicative figures for public finances in the next parliament based on our interpretation of each of the three main parties’ highly sketchy (to date) outlines of their preferred trajectories. This note updates this work based on the new OBR figures released alongside the Autumn Statement. … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances The drama of the Commons took a back-seat to the economic musings of the OBR today 3 December 2014 by Matthew Whittaker Unusually for a fiscal event so close to an election, today’s Autumn Statement was never expected to be about giveaways and grand schemes. Indeed, the politics in the Commons took a back-seat to the economic musings of the OBR. The two key questions we wanted answered? First, how would the outlook for public finances – … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances Will the Chancellor still be aiming for an overall budget surplus in 2018/19 after the Autumn Statement? 2 December 2014 by Adam Corlett In tomorrow’s Autumn Statement, the Chancellor is expected to announce an updated Charter for Budget Responsibility, which would formally commit the government to a balanced cyclically-adjusted current budget by 2017-18. By forcing a vote in parliament, the Chancellor is thought to be drawing Labour out on their potentially looser fiscal policy. Yet this move also … Continued READ MORE
Welfare The challenges facing Universal Credit go far wider than its IT system 27 November 2014 by David Finch The program to deliver Universal Credit (UC) has already been reset by the Major Projects Authority, and now the National Audit Office has raised further doubts about whether UC will be successfully implemented at all. Their report tells us that the new digital service been delayed by six months due to a lack of staff … Continued READ MORE
Pay A reality check on hopes that Britain’s pay squeeze has ended 19 November 2014 by Matthew Whittaker Last week’s data on average weekly earnings (AWE) showed that annual pay growth in September had overtaken CPI inflation for the first time since 2009, sparking cautious (and not-so-cautious) proclamations that the six-year squeeze on earnings might finally have come to an end. Today comes a sobering reality check. According to the ONS’ Annual Survey … Continued READ MORE
Low pay· Pay We need strategies to boost pay progression for the low paid 19 November 2014 by Conor D’Arcy “There’s only one person there who’s gone from the bottom to the top, out of hundreds. If I’m starting at the bottom, and I only know one person that’s gone all the way, I don’t think I’m going to be able to do that.” That was the view of an employee of a large supermarket. … Continued READ MORE
Pay Are earnings going to rise by more than 3 per cent next year? 12 November 2014 by Laura Gardiner Another BoE inflation report, another set of rosy forecasts for earnings next year. Just as 2014 was supposed to be the year of the pay rise, now it seems 2015 will be the year when things turn positive. And, according to the Bank, wages won’t just creep into positive territory next year, they are going … Continued READ MORE
Living standards· Social mobility Stuck or just passing through: how can policy-makers improve social mobility? 11 November 2014 by Gavin Kelly One of the recurring fixtures of British political life is a bout of soul-searching about social mobility. Depending on the point of view of the pundit, this tends to involve a nostalgic backward glance to an era when things were supposedly better (cue unevidenced claims about the mobility-boosting virtues of grammar schools) or, less commonly, … Continued READ MORE
Labour market· Pay How the changing shape of the UK workforce has started to drag down wages 10 November 2014 by Laura Gardiner It’s clichéd to say that the most certainty you can take from any economist’s prediction is that it will be mistaken, but many got their forecasts for 2014 horribly wrong. At the beginning of this year, commentators were fairly united in hailing the ‘year of the pay rise’, with most expecting the UK’s enduring real … Continued READ MORE
Pay Why hasn’t 2014 been the year of the pay rise? 7 November 2014 by Gavin Kelly Next month we will be treated to the familiar spate of end of year reviews. Amid all that copy we can expect a regular theme to be that this was (another) year in which all the forecasts of a rise in earnings for workers were proved wrong. Inaccurate economic forecasts, especially when it comes to … Continued READ MORE
Low pay· Pay The prevalence of low pay in Britain remains stubbornly high 3 November 2014 by Adam Corlett More than one in five employees in Britain are low paid, according to this year’s Low Pay Britain report. This latest figure is a small increase, reversing a welcome fall the year before. But the bigger picture is that the rate of low pay in Britain has barely changed over the past 20 years. Beneath … Continued READ MORE
Labour market· Cities and regions Break even moment for employment masks regional imbalance 15 October 2014 by Laura Gardiner Today’s employment statistics mark an important point on the long road to recovery from the historically deep downturn we have suffered. After over six years, the working age employment rate has returned to its pre-recession level of 73.0 per cent (though it is still below the February 2005 peak of 73.2 per cent). We have … Continued READ MORE
Living standards· Political parties and elections What’s in store for the 2015 victor: winner’s curse or a steady recovery? 9 October 2014 by Gavin Kelly One of the laziest lines in politics is that there are good elections to lose: five years in opposition are rarely rewarding. But it’s certainly true that there are less attractive elections to win and for many 2015 falls into this category. As others have said: beware of the winner’s curse. This pessimism is increasingly … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances· Political parties and elections In the balance: public finances in the next parliament 2 October 2014 by Matthew Whittaker and Adam Corlett Having assured us in recent weeks that we are better together, we can expect the three main parties to provide somewhat more discordant visions of the future over the coming conference season. And, with the Coalition expected to have delivered just over half of its intended fiscal consolidation programme by the end of the current … Continued READ MORE
Pay Where next for the minimum wage? 30 September 2014 by Gavin Kelly Today marks the first real terms rise in the minimum wage in six years. It speaks volumes about the convulsions in our labour market that something that was once taken completely for granted is now viewed as a significant and welcome departure. And the rise occurs at a time when there is something of a competitive … Continued READ MORE
Pay Raising the floor: scenarios for the minimum wage in the next parliament 28 September 2014 by Matthew Whittaker The National Minimum Wage (NMW) for those aged 21 and over – the ‘adult rate’ – is increasing to £6.50 from 1 October 2014. The 19p increase represents the first real-terms rise in the NMW in six years, but will leave the rate some 4.1 per cent lower in real-terms than its peak in October … Continued READ MORE
Welfare The importance of getting the incentives right for Universal Credit 10 September 2014 by David Finch Despite parties gearing up for the next election and the chancellor already placing further spending cuts to welfare firmly on the table, attention has moved away from the expected impact of Universal Credit on families, and has instead turned to the implementation issues that have dogged it so far. Cuts in welfare spending have already … Continued READ MORE
Public spending· Economy and public finances Crisis and consolidation in the public finances – reflections on our seminar with the OBR 9 September 2014 by Matthew Whittaker An exciting morning at RF-HQ. In one room, the first of our Universal Credit expert panel meetings, starting the process of reviewing the current design of UC and thinking about changes that would make the policy more likely to support people to get into and progress in work. In another, the OBR arrived to launch … Continued READ MORE
Housing A fair deal for tenants and landlords 6 September 2014 by Vidhya Alakeson For a government that emphasises rights and responsibilities, housing seems to have been left out. The government’s largest investment in housing – housing benefit – requires landlords to do nothing for their share of the £20 billion. Regardless of the quality of the home they let or the management they provide, the amount of housing … Continued READ MORE
Childcare· Welfare· Political parties and elections Childcare is a new election battleground, so why do none of the parties get it? 29 August 2014 by Vidhya Alakeson We have lost our way on childcare. No party has set out a vision for where we are trying to get as a country. Parties compete on who can invest more without any sense of an overall plan. The result is a fragmented, increasingly complex system that still expects parents to pay a higher price … Continued READ MORE
Housing The ‘housing pinched’: Which UK households are most at risk of falling over the edge? 27 August 2014 by Laura Gardiner Reading the housing headlines recently you could be forgiven for breathing a sigh of relief. House prices have showed signs of cooling in recent months, thought to be partly down to tighter mortgage lending rules that have dampened down demand. In addition, at least outside of the South, private rents have been through a year of below-inflation increases on both government and many commercial indices. … Continued READ MORE