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

Election year tax cuts are sandwiched between £20 billion of tax rises already implemented and £17 billion planned for after polling day

Lower interest rates will slightly increase the Chancellor’s fiscal headroom for election year tax cuts, but these will be sandwiched between far bigger past and future tax rises, according to new Resolution Foundation research published today (Wednesday). The Foundation’s Spring Budget 2024 preview examines how the Office for Budget Responsibility might update its economic and … Continued

Britain’s exposure to trade shocks has shifted from the factory gate to cities and the supermarket

The traditional threat from globalisation – domestic manufacturing being replaced by cheaper imports – has declined in recent decades. But Britain faces new and emerging trade exposures – from high-earning service sector jobs to cheap food in supermarkets – according to new research published today (Monday) by the Resolution Foundation. Decent exposure examines how Britain … Continued

UK falls into recession, and a far deeper living standards downturn

The UK economy fell into recession in the second half of 2023, but families have experienced a far deeper living standards downturn, with GDP per capita now 4.2 per cent off its pre-cost of living crisis path – equivalent to a loss of nearly £1,500 per household – the Resolution Foundation said today. Weaker than … Continued

No news is good news, as inflation remains unchanged in January, with food prices falling for the first time since September 2021

CPI inflation in January remained at its December level of 4.0 per cent – slightly weaker than the 4.1 per cent the Bank of England and financial markets had expected. This was despite the Ofgem price cap rising in January, which was offset by falling furniture and food prices, the Resolution Foundation said today (Wednesday). … Continued

Families need help in rising to the ‘triple savings challenge’ of saving more for rainy days, bigger life events and retirement

Families across Britain face a ‘triple savings challenge’ of insufficient ‘rainy day’ savings of at least £1,000, an inability to cope financially with bigger life events like family breakdown, and inadequate retirement incomes. But all three can be addressed by building on the success of auto-enrolment into pension saving to encourage more liquid saving too, … Continued

Britain’s deepening turnout divide – less well-off millennials are increasingly unlikely to vote compared to their better-off counterparts

The turnout divide between richer and poorer young voters is deepening, with millennial non-graduates and non-homeowners increasingly unlikely to vote compared to their graduate and homeowning counterparts since the last general election, according to new Resolution Foundation analysis published today (Wednesday). The research examines the rising role of age in influencing people’s political preferences ahead … Continued

Britain has a bigger, but sicker, workforce than previously thought

New Office for National Statistics (ONS) estimates of the size and shape of the UK labour market show that it has a bigger workforce, with employment up 170,000 compared to previous estimates, but also a sicker one, with the number not working because of long-term sickness reaching a new record high of 2.8 million, the … Continued

Britain’s employment gaps are falling, but its sickness gaps are widening

Britain’s rise in sickness-related inactivity, and resulting fall in employment, since the start of the pandemic has played out differently across the country – with traditionally low employment areas like Glasgow continuing to record strong jobs growth, but areas with existing high levels of ill-health and disability like West Wales seeing the biggest rises in … Continued

Services account for a record share of Britain’s exports – but they are increasingly concentrated in London

Services such as ICT, education, culture and finance accounted for a record share of Britain’s exports in late 2023 – highlighting their growing economic importance, despite politicians’ continued focus on goods. But this success is far too focused on the capital, which now accounts for almost half of all UK services exports, according to new … Continued

Pay packets have barely grown since the summer

Total pay growth fell for the fourth consecutive month, reflecting the fact that total private sector pay has been broadly flat since August, the Resolution Foundation said today (Tuesday) in response to the latest ONS labour market data. Headline annual pay growth in the three months to November dropped to 6.6 per cent, largely reflecting … Continued

Changing mortgage preferences and pandemic saving have helped UK households gain an unprecedented income windfall from rising interest rates

Changes to the UK mortgage market and improving household balance sheets, including ‘forced saving’ during the pandemic, have helped to deliver an unprecedented £16 billion household income boost from higher interest rates, according to new research published today (Friday) by the Resolution Foundation. The latest Macroeconomic Policy Outlook examines the impact of the Bank of … Continued

Cost of living pressures have not fallen as fast as inflation, as high – and highly variable – housing cost rises move centre stage

The cost of living challenges facing British households have not disappeared with fast falling inflation, as high and highly variable housing cost rises offset the welcome return of pay rises, according to new research published today (Thursday) by the Resolution Foundation. The report Pressure on pay, prices and properties, which uses data from an October … Continued

Britain is a stagnation nation as growth continues to flatline

Commenting on the latest ONS GDP data, in which the economy showed no growth in the three months to October, and contracted by 0.3 per cent in October, driven by a fall in services (including services exports) and ICT in particular, James Smith, Research Director at the Resolution Foundation, said: “The poor performance on the … Continued

Pay growth follows inflation down as jobs market treads water

Pay growth has declined markedly in recent months – tracking the sharp recent fall in inflation and a looser labour market – the Resolution Foundation said today (Tuesday) in response to the latest ONS labour market data. The Foundation notes that while headline annual pay growth in the three months to October remained high – … Continued

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