Curbing the £20 billion rise in working-age incapacity and disability benefit spending is a task for the NHS and employers, not just the Treasury and DWP

Addressing rising incapacity and disability benefit spending will be a key task for whoever wins the next election. But with the increase driven by Britain ageing, becoming less healthy and experiencing more disability, politicians will need to focus on the underlying causes of a rising caseload, not just on restricting the eligibility and generosity of … Continued

Inflation returns to target for the first time in three years – but concerns about higher prices and strong services inflation remain

CPI inflation has fallen back to the Bank of England’s target of 2 per cent for the first time since July 2021 – a welcome return to normality – but worries about the legacy of high prices and stubborn underlying inflation remain, the Resolution Foundation said today (Wednesday). The biggest downward contribution to the fall … Continued

Britain has a welcome new policy consensus on housing, but it also needs new cash to make a lasting difference

A welcome new political consensus is emerging on housing, with the Conservative and Labour manifestos both combining support for first-time buyers with stretching housebuilding targets. But the lack of cash for affordable housing will make these targets hard to hit, according to new Resolution Foundation research published today (Wednesday). Home truths – the latest Resolution … Continued

Labour manifesto promises biggest shake-up of the workplace in a generation, against backdrop of further tax rises and cuts to public services

The Labour Party is proposing the biggest shake-up of the workplace in a generation, with the laudable aim of boosting the quality of work, which will demand careful consultation and implementation given the scale of change proposed. This boldness contrasts with a politically cautious approach to the public finances, which means a future Labour Chancellor … Continued

Conservative manifesto proposals would mean tax cuts of £170 for a typical employee – but plans rest on £33 billion of spending cuts in order to get debt falling

Tax changes pledged in the Conservative Party manifesto today (Tuesday) would mean a typical employee seeing their personal tax bill fall by £170 in 2028-29. But these pledges rely on making £12 billion of welfare cuts that recent history suggests will not be achievable over the next Parliament. This, along with £21 billion of cuts … Continued

Cooling labour market means next government will have to tackle the problem of falling employment, not falling inflation

The UK labour market continues to cool, with the employment rate only just above its mid-pandemic low point, suggesting that kickstarting jobs growth will be a major task for the next government, the Resolution Foundation said today (Tuesday) in response to the latest ONS labour market statistics. The latest data showed widespread signs of cooling, … Continued

Britain’s economic growth has been flattered by a booming population – but rising productivity holds key to stronger growth in the next parliament

The UK’s middle-of-the-pack record on economic growth since 2010 has been flattered by the population growing by six million people. But Britain will need to turnaround its dire productivity record and leverage its services strengths if it wants raise growth and boost living standards in the 2020s, according to new research published today (Sunday) by … Continued

Big rows over small pledges risk missing wider uncertainties that could leave the next government confronting a £12 billion black hole in the public finances

The narrow focus of the election campaign on relatively small spending pledges by the main political parties risks missing bigger economic uncertainties that the next government may need to confront, including a possible £12 billion black hole in the public finances from a productivity downgrade, higher market interest rates and infected-blood compensation, according to new … Continued

Britain’s job recovery falters, but its mini pay recovery continues

The UK’s economic slowdown last year has caused Britain’s jobs recovery to falter, with its post-pandemic workforce shrinking by the equivalent by the equivalent of one million workers. But this hasn’t yet fed through into pay packets, with real wages growing at their fastest in rate in over two years, the Resolution Foundation said today … Continued

Workers earning more while producing less is affordable thanks to falling import prices and pension deficits – but it won’t last

Falling pension costs and import prices have temporarily severed the link between productivity and wage growth in the UK, allowing real wages to rise without putting further pressure on inflation. But this ‘unproductive wage growth’ won’t last, according to new research published today (Monday) by the Resolution Foundation. The Foundation’s latest Macroeconomic Policy Outlook examines … Continued

UK swiftly exits its third recession in 16 years

The UK economy has bounced back from recession, with stronger-than-expected growth of 0.6 per cent in the first quarter of 2024 – the strongest of all G7 economies. This momentum will need to be maintained given Britain’s wider economic backdrop of frequent downturns and stagnation, with GDP per capita growth down 90 per cent over … Continued

Firms use flexible contracts to manage volatile customer demand and worker demand for flexibility – but also to cut costs and pay

Firms use flexible employment contracts – including temporary, variable- and zero-hours contracts – for a wide range of reasons, including managing customer demand and because they say staff prefer them. But there are real costs for some workers with one-in-four firms reporting using them to reduce their wage bill, according to a new Resolution Foundation … Continued

Lower tax receipts leave borrowing higher than forecast – and no signs of extra wriggle room to fuel another pre-election Budget

UK borrowing over the last fiscal year (2023-24) was £7.6 billion lower than last year, but £60 billion higher than the year before the pandemic and, critically, £6.6 billion higher than the Office for Budget Responsibility’s forecast at the Spring Budget last month, the Resolution Foundation said today (Tuesday). The higher than forecast borrowing was … Continued

Higher interest rates could add £29 billion to household energy bills so Britain needs a plan to deliver an energy investment surge that protects lower income households

Britain needs to increase investment in its power sector four-fold over the next decade to deliver the crucial next step in decarbonising the economy. But promises that electrifying our home heating and driving will lead to lower energy costs have relied on the pre-energy crisis low interest rates world returning, and we need a plan … Continued

Prime Minister right to focus on people not being well enough to work – but has offered a problem statement not a plan

With the UK the only G7 economy yet to return to pre-pandemic employment levels, the Prime Minister is right to make reducing long-term sickness a top economic priority. But his latest announcement is a problem statement not a plan, the Resolution Foundation said today (Friday). The Foundation notes that proposals to reform sicknotes could offer … Continued

Winners of the next election will govern ‘Universal Credit Britain’ – with working renters winning out from the reform, while those with disabilities face major income losses

Universal Credit (UC) is on track to be fully rolled-out to seven million families by the end of the next parliament, with working renters the main winners and those with disabilities the main losers from the reform as it faces up to new challenges like rising long-term sickness, according to new Resolution Foundation research published … Continued

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