Macroeconomic policy What goes down must come up The Bank of England becomes the first major central bank to raise rates but impact will be small with fiscal policy key to Omicron response 16 December 2021 by Jack Leslie and James Smith The Bank of England performed a ‘bait and switch’ by not raising rates in November when many people expected they would, but then raising them today when many thought the rise of Omicron would mean that they would wait to see the impact of the new wave. Many commentators have focussed on the high current … Continued READ MORE
Coronavirus· Labour market The new wave The economic policy response to Omicron 15 December 2021 by Torsten Bell and Jack Leslie A new wave of this pandemic is underway, even if we can’t see much sign of it yet in the UK-wide data. The Prime Minister rightly tells us to expect “a tidal wave of Omicron coming” and in London it’s already arrived. This is not the Christmas present any of us wanted. In terms of … Continued READ MORE
Wealth & assets Home county Options for taxing main residence capital gains 9 December 2021 by Adam Corlett and Jack Leslie Over the past 30 years, the total value of household wealth in the UK has risen from three times national income to well over seven times. Inflation-beating house price growth and high ownership rates have combined to add around £3 trillion of housing wealth from main residences to that total – accounting for around a … Continued READ MORE
The Boris Budget Resolution Foundation analysis of Autumn Budget and Spending Review 2021 28 October 2021 by Torsten Bell and Mike Brewer and Nye Cominetti and Karl Handscomb and Kathleen Henehan and Lindsay Judge and Jack Leslie and Jonathan Marshall and Krishan Shah and James Smith and Daniel Tomlinson and Lalitha Try This briefing note provides an assessment of the measures announced in the October 2021 Budget and Spending Review. The Chancellor has unveiled a career-defining third Budget against a backdrop of heightened uncertainty and risks. His aim: to draw a line under Covid-19, boost spending in the key priority areas yet also bear down on the … Continued READ MORE
Intergenerational Centre An intergenerational audit for the UK 2021 21 October 2021 by Kathleen Henehan and Maja Gustafsson and Nye Cominetti and Karl Handscomb and Lindsay Judge and Jack Leslie and Lalitha Try Our third Intergenerational Audit – supported by the Nuffield Foundation – provides an analysis of economic living standards across generations in Britain. In so doing, it analyses the latest data across four domains: Jobs, skills and pay Housing costs and security Taxes, benefits and household incomes Wealth and assets In each of these domains, we … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances The Uncertainty Principle Previewing the decisions to be taken at the Autumn Budget and Spending Review 2021 19 October 2021 by Jack Leslie and Krishan Shah and James Smith and Daniel Tomlinson This report is our analysis of the economic and fiscal outlook ahead of the upcoming Autumn 2021 Budget – including what it will mean for the decisions the Chancellor will need to take at the Spending Review. The starting point for the Budget is that the economy is in a much stronger position than was … Continued READ MORE
Macroeconomic policy Macroeconomic Policy Outlook Q3 2021 2 August 2021 by Jack Leslie and James Smith With the economic outlook improving, there has been much debate about when the Bank of England should start tightening policy. But the Bank also faces a key decision about how to tighten. This is important because a successful strategy for withdrawing support is key to delivering a strong recovery. So in this edition of our … Continued READ MORE
Wealth & assets (Wealth) gap year The impact of the coronavirus crisis on UK household wealth 12 July 2021 by Jack Leslie and Krishan Shah This report is the second in a series of annual reports analysing the state of wealth in Britain. In it we provide the first complete picture of the impact of the Covid-19 crisis across the entire wealth distribution of the UK, and what it means for living standards. We find that the Covid-19 pandemic is … Continued READ MORE
Wealth & assets· Housing· Intergenerational Centre Stakes and ladders The costs and benefits of buying a first home over the generations 26 June 2021 by Lindsay Judge and Jack Leslie Today’s young people often point bitterly to the lower house prices their parents and grandparents paid, while those from older generations look jealously at the low interest rates that first-time buyers now enjoy. So, who has really had the better deal? In this briefing note we assess the costs and benefits of buying one’s first home over the generations. READ MORE
Budgets & fiscal events· Economy and public finances Spending fast, taxing slow Resolution Foundation analysis of Budget 2021 4 March 2021 by Torsten Bell and Mike Brewer and Nye Cominetti and Karl Handscomb and Kathleen Henehan and Lindsay Judge and Jack Leslie and Charlie McCurdy and Cara Pacitti and Hannah Slaughter and James Smith and Greg Thwaites and Daniel Tomlinson This briefing note provides an assessment of the measures announced in the March 2021 Budget. The context for this Budget was an intensification of the Covid-19 pandemic, creating a need for further policy measures to support families and firms in the months before the completion of the vaccine rollout. In response, the Chancellor announced significant … Continued READ MORE
Coronavirus· Economy and public finances· Macroeconomic policy How to throw good money after good Budget 2021 and the challenge of delivering a rapid recovery from Covid-19 25 February 2021 by Jack Leslie and Charlie McCurdy and Cara Pacitti and James Smith While the strength of the economic recovery from Covid-19 will depend on the vaccine rollout and the Government’s ‘road map’ for easing social distancing restrictions, it will also depend on decisions taken at the Budget which are the economic counterpart to that reopening plan. This paper assesses the economic context to the Budget: how the … Continued READ MORE
Coronavirus· Firms· Economic growth On firm ground? The impact of Covid-19 on firms and what policy makers should do in response 10 February 2021 by Nye Cominetti and Jack Leslie and James Smith The coronavirus crisis has had huge repercussions across the economy, and the corporate sector is no exception. This paper analyses how the crisis has affected firms’ finances, puts that in context compared to previous recessions, and assesses the ability of firms to contribute to the post-crisis recovery. This is important because firms’ investment and hiring … Continued READ MORE
Wealth & assets The UK’s wealth distribution and characteristics of high-wealth households 3 January 2021 by Arun Advani and George Bangham and Jack Leslie Household wealth is profoundly important for living standards but is held very unequally. Official estimates of wealth in the UK underestimate its size – by £800 billion – and also the level of inequality. READ MORE
Pensions & savings· Wealth & assets The Missing Billions 3 January 2021 by Jack Leslie In this spotlight we discuss new research on the size and distribution of UK household wealth. Such wealth matters for living standards, economic opportunity and the ability of families to weather the coronavirus crisis. But it also matters because there is increasing interest in reforming wealth taxes in the UK, not least in the context … Continued READ MORE
Economic growth· Macroeconomic policy Macroeconomic Policy Outlook Q4 2020 28 December 2020 by James Smith and Torsten Bell and Karl Handscomb and Jack Leslie and Cara Pacitti and Nye Cominetti This is our regular Macro Policy Outlook, providing a policy-focused take on the economy. In this edition, we focus on the labour market, and the prospects for unemployment. This edition of the Macro Policy Outlook looks ahead to prospects for 2021. The early months of next year will pick up where 2020 left off, … Continued READ MORE
Coronavirus· Budgets & fiscal events· Public spending· Economy and public finances Here today, gone tomorrow Putting Spending Review 2020 into context 26 November 2020 by Torsten Bell and Nye Cominetti and Karl Handscomb and Jack Leslie and Cara Pacitti and Hannah Slaughter and James Smith and Daniel Tomlinson This briefing note provides an assessment of the measures announced in the November 2020 Spending Review. The backdrop to that Review was the reality of an on-going health crisis and a huge hit to the economy which looks set to leave lasting damage to both household and public finances. In response, the Chancellor has ramped up coronavirus spending this … Continued READ MORE
Coronavirus· Budgets & fiscal events· Economy and public finances The Covid state Analysis of the economy and public finances ahead of the 2020 Spending Review 20 November 2020 by Karl Handscomb and Jack Leslie and Cara Pacitti and Daniel Tomlinson and James Smith The Chancellor is set to unveil his Spending Review against a radically changed economic and fiscal backdrop to the one he faced in March. Although unemployment is set to peak lower and later than had been expected back in the Summer, the long-term economic scarring from this crisis is set to be significant. The OBR’s … Continued READ MORE
Coronavirus· Fiscal policy· Economy and public finances· Tax· Macroeconomic policy Unhealthy finances How to support the economy today and repair the public finances tomorrow 11 November 2020 by George Bangham and Adam Corlett and Jack Leslie and Cara Pacitti and James Smith This report provides analysis of the dual challenges faced by the government: ensuring that there is sufficient fiscal support through the crisis and recovery, and setting fiscal policy on a sustainable long-term path. Some argue it is unsustainable to provide the massive government support during the crisis, while others see little constraint on government borrowing … Continued READ MORE
Economy and public finances· Macroeconomic policy Macroeconomic Policy Outlook Q3 2020 21 September 2020 by James Smith and Jack Leslie This is our regular Macro Policy Outlook, providing a policy-focused take on the economy. In this edition, we focus on the labour market, and the prospects for unemployment. While the OBR forecast that the unemployment rate will rise to match its 1980s peak of 11.9 per cent, the Bank of England is projecting a rise … Continued READ MORE
Coronavirus· Fiscal policy· Macroeconomic policy Act now, or pay later The OBR’s Fiscal Sustainability Report makes clear the implications of a crisis-driven rise in unemployment for the public finances 14 July 2020 by James Smith and Cara Pacitti and Jack Leslie The OBR’s latest Fiscal Sustainability Report confirms its view that the current crisis could lead to the largest economic contraction in 300 years precipitating a return of unemployment levels not since the 1980s. Given the huge uncertainty, the OBR has produced three scenarios with different assumption about a timetable for finding a vaccine or other … Continued READ MORE
Coronavirus· Monetary policy Easing does it Economic policy beyond the lockdown 7 July 2020 by Laura Gardiner and Jack Leslie and Cara Pacitti and James Smith Having weathered the first wave of the coronavirus economic storm, the task now facing the country is how to reopen, revive, and rebuild our economy while the virus remains with us. The Government needs to act as quickly, boldly, and creatively in the recovery phase of the outbreak as it did in the initial rescue … Continued READ MORE
Coronavirus· Household debt· Pensions & savings· Wealth & assets Rainy days An audit of household wealth and the initial effects of the coronavirus crisis on saving and spending in Great Britain 22 June 2020 by George Bangham and Jack Leslie Families in Great Britain are faced with the most severe economic contraction in more than 100 years. Much of the immediate focus among policy makers has been on the size and distribution of falls in families’ incomes but household wealth, both savings and debt, will play a hugely important role in shaping how far families’ … Continued READ MORE
Coronavirus The economic effects of coronavirus in the UK Utilising timely economic indicators 14 May 2020 by Jack Leslie and Charlie McCurdy Our roundup of timely indicators of the impact of coronavirus which aims to plug the gap left by traditional measures of economic activity which are not timely enough to capture these effects. Updated weekly. READ MORE
Coronavirus· Monetary policy· Macroeconomic policy Optimism in a time of coronavirus While undoubtedly gloomy, today’s Monetary Policy and Financial Stability Reports from the Bank of England envisage little lasting damage to the economy or financial system 7 May 2020 by Jack Leslie and James Smith Today the Bank of England’s Monetary Policy Committee provided its first major assessment of the impact of coronavirus on the economy. The MPC envisage growth this year to be the weakest in over 300 years, with a fall of 25 per cent expected in the second quarter, and a fall of 14 per cent for … Continued READ MORE
Coronavirus· Labour market· Fiscal policy· Economy and public finances· Macroeconomic policy Doing more of what it takes Next steps in the economic response to coronavirus 16 April 2020 by Richard Hughes and Jack Leslie and Charlie McCurdy and Cara Pacitti and James Smith and Daniel Tomlinson The Government has responded to coronavirus by shutting down large parts of the UK economy, and socialising the costs of doing so through a package of fiscal support to firms and individuals unprecedented in size and scope. Given uncertainty about how long public health restrictions will need to be in place, economic policy makers need to be prepared to manage what could … Continued READ MORE
