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

The minimum wage is the single most successful economic policy in a generation, and has boosted the wages of millions of Britain’s lowest earners by £6,000 a year

The introduction of the minimum wage in the UK in 1999 is the single most successful economic policy in a generation, raising the pay of the nation’s lowest paid workers by £6,000 a year compared to their earnings simply rising in line with typical wages, according to new Resolution Foundation analysis published today (Wednesday). Happy … Continued

Pensioners gain £1,000 on average from policy changes since 2010, with tax rises this parliament offset by Triple Lock boost for all but the richest pensioners

Taxpaying pensioners did not gain anything from the Chancellor’s Budget last week, and will see their taxes go up due to Income Tax threshold freezes announced earlier in this parliament, prompting accusations that the government has neglected older generations ahead of the next election. But new Resolution Foundation analysis published today (Tuesday) reveals that pensioners … Continued

Chancellor reverses the policy priorities of the 2010s, rehashes its austerity, and records the first ever polling-day-to-polling-day fall in living standards

The likely last Budget before the General Election showed that this has been a parliament of flatlining growth, falling living standards, and notable redistribution from the old and the rich to the young and the poor, according to the Resolution Foundation’s overnight analysis of the 2024 Spring Budget. The Foundation notes that the approach taken … Continued

‘Sweet and sour’ Budget combines £8 billion election year personal tax cuts with post-election plans for £38 billion of tax rises and spending cuts

Middle earners gain at the expense of pensioners and public service users

The Chancellor today announced another pre-election sweetener of further National Insurance rate cuts, taking total net personal tax cuts this election year to £8 billion and prioritising workers over pensioners. But he has left a sour taste for whoever wins the next election, with £19 billion of post-election tax rises and another £19 billion of … Continued

Lower debt interest costs give Chancellor a borrowing boost ahead of the Budget

Lower than expected spending offset weaker than expected tax receipts in the year to January, while significant data revisions have left overall borrowing £9.2 billion lower than the Office for Budget Responsibility’s (OBR) forecast, and given the Chancellor a timely fiscal boost ahead of his Budget next month, the Resolution Foundation said today (Wednesday). Self-assessment … Continued

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