Economy 2030
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Welfare

Social Insecurity

Assessing trends in social security to prepare for the decade of change ahead

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The UK is facing a decade of unprecedented economic change as we adjust to a post-Covid-19 economy, a new economic context outside the European Union (EU), and the decarbonisation of the economy.  And the social security system has a key role to play in the years ahead: it is part of the policy toolkit for … Continued

Economy 2030

More trade from a land down under

The significance of trade agreements with Australia and New Zealand

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Last week’s announcement of a trade agreement with Australia (along with a soon-to-be-finalised deal with New Zealand) is good news for the Government’s post-Brexit trade strategy. The deal with Australia represents the first substantively new deal, providing evidence of the opportunities the UK now has after leaving the EU. But both deals are small in … Continued

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

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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

The Boris Budget

Resolution Foundation analysis of Autumn Budget and Spending Review 2021

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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

The Uncertainty Principle

Previewing the decisions to be taken at the Autumn Budget and Spending Review 2021

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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

Macroeconomic Policy Outlook Q1 2021

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In this edition of our regular Macro Policy Outlook, we focus on the single biggest measure announced in the recent Budget to boost business investment, a long-running part of the UK’s macroeconomic weakness. The Government’s ‘super deduction’ policy is an innovative way to achieve this, allowing firms to write off an unprecedented 130 per cent … Continued

Spending fast, taxing slow

Resolution Foundation analysis of Budget 2021

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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

How to throw good money after good

Budget 2021 and the challenge of delivering a rapid recovery from Covid-19

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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

On firm ground?

The impact of Covid-19 on firms and what policy makers should do in response

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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

Macroeconomic Policy Outlook Q4 2020

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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

Here today, gone tomorrow

Putting Spending Review 2020 into context

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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

The Covid state

Analysis of the economy and public finances ahead of the 2020 Spending Review

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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

Unhealthy finances

How to support the economy today and repair the public finances tomorrow

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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

The Bank of England’s options for supporting the economy

Lessons from the US

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Ahead of this week’s Monetary Policy Committee meeting, we discuss what recent changes to how US policy makers approach setting interest rates might tell us about what additional support the Bank of England could provide in the face of a second national lockdown. The most important change was the introduction of a ‘flexible average inflation … Continued

The Winter (Economy Plan) is coming

Chancellor ramps economic support back up, but avoidable design flaws will limit its success in stemming the Autumn rise in unemployment

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Economic policy yesterday caught back up with the ramping back up of social distancing restrictions by the Prime Minister earlier in the week. The Chancellor rightly announced new measures rather than sticking to plans to phase out help for workers and firms.   His most significant policy was the Job Support Scheme (JSS), an extended, … Continued

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

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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

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

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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

Doing more of what it takes

Next steps in the economic response to coronavirus

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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

Helicopters on standby?

With rates at all-time lows, the Bank of England needs a different playbook for this crisis

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With a big recession on the way, the Bank of England’s Monetary Policy Committee would normally be unveiling measures to support the economy today, and this piece would be discussing what they’ve done. But we are not in normal times. Instead, the Bank of England does not have the option of cutting rates in the … Continued

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