Monetary policy
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Fiscal policy
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Economy and public finances
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Macroeconomic policy

Dealing with ‘no deal’

The economic policy response to a ‘no deal’ Brexit

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This report provides a framework for understanding what role macroeconomic policy can play in alleviating the economic impact of a ‘no deal’ Brexit. It provides an estimate of the impact on government finances, and includes an illustrative stimulus package designed to maximise the support from fiscal policy to the economy. A ‘no deal’ Brexit would … Continued

Budgets & fiscal events
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Public spending
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Economy and public finances

Rounding up

Putting the 2019 Spending Round into context

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In his September 2019 Spending Round the Chancellor rightly declared he was “turning the page” on austerity and “writing a new chapter in our public services”. But he has also ripped up his own fiscal rulebook, almost certainly breaking the fiscal ‘mandate’ in the near-term and casting significant doubt over his ability to keep debt falling as a share of GDP over the coming years.

Budgets & fiscal events
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Public spending
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Economy and public finances

Breaking the rules

Analysing the credibility of the Chancellor’s commitment to keep to his fiscal rules

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The Chancellor is shortly to deliver the first spending round (SR) of the post-austerity era. Although he is only setting departmental budgets for 2020-21, this event will mark a turning point  in our political and economic debates as it brings to an end almost 10 years of austerity. The politics of this SR are relatively … Continued

Counting the cost: UK living standards since the 2016 referendum

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Household incomes are around £1,500 year lower today than they were expected to be before the Brexit referendum – with the UK having experienced the sharpest income growth slowdown of any economy for which the OECD publish data. This note focuses on the UK’s recent economic performance, going beyond the usual focus on GDP to look at the impact on household living standards across the UK.

Budgets & fiscal events
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Economy and public finances

A man for all seasons? What the Chancellor can expect in the OBR’s Spring outlook

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Consumer borrowing has been surging over recent months, raising fears that we are storing up more debt-fuelled problems for tomorrow. This note digs into the numbers and focuses on who is taking out all the credit. We consider also how the profile of the UK’s household debt will stand up to increasing interest rates in the coming years.

Changing Lanes: The impact of different post-Brexit trading policies on the cost of living

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The issue of trade has returned to the frontline of British policy making and politics for the first time in 40 years, but little has been said about what the impact of changes in the UK’s trade regime could be on living standards. This paper aims to fill that gap by looking at what impact two “no deal” Brexit scenarios could have on prices and living standards.

Public spending
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Economy and public finances

Ending austerity? The priorities, price tags and practicalities for a government changing course on spending cuts

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Britain is seven years into a prolonged period of fiscal consolidation, in which constraints on public spending have been the central feature and are set to continue for some years to come. Following the general election  there has been a significant debate about the extent to which the result – and the failure of the … Continued

Public spending
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Economy and public finances
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Political parties and elections

The deficit the election forgot? Pre-election briefing on the main parties’ fiscal positions

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While the deficit remains in place, it is heading back to the sort of level relative to the size of the economy that past generations have been comfortable with. With the process of fiscal consolidation dominating so much of the political discourse in recent years it’s unlikely that many voters will be lamenting a dialling … Continued

Prices & consumption
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Economy and public finances

The going rate: moving from CPI to CPIH and the inflation experiences of UK households

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The period of ultra-low inflation is over. CPI inflation is expected to rise above 2 per cent in the near future, eating into earnings and making benefits less generous. This coincides with a change in the way we measure those price rises, with a new main measure of inflation. On 21 March, CPIH will replace … Continued

Budgets & fiscal events
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Public spending
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Economy and public finances

Economy drive: prospects and priorities ahead of the last Spring Budget

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Healthier-than-expected tax receipts, the absence of any immediate post-referendum slowdown in growth and measurement changes are set to lower borrowing forecasts at next week’s Budget by £29bn between 2015-16 and 2020-21. Such a revision would leave borrowing projections for the remainder of the Parliament below those expected at Autumn Statement 2016, but still well above … Continued

Living standards
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Economy and public finances
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Globalisation
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Political parties and elections

In the swing of things: what does Donald Trump’s victory tell us about America?

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Post-election analysis has highlighted the importance of demographic, economic and cultural factors in the US election result. In this slide pack we consider why different parts of America voted as they did. We look across 93 per cent (2,932 of 3,143) of US counties spread across 46 states including the 11 battleground states. We test … Continued

Living standards
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Budgets & fiscal events
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Incomes
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Public spending
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Economy and public finances
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Welfare

Under New Management: options for supporting ‘just managing’ families at the Autumn Statement

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The new Prime Minister has been very clear in her determination to put the interests of ‘just managing’ families at the heart of her government, but she has inherited tax and benefit plans which are set to lower incomes for many in the group over the remainder of the parliament. With post-EU referendum revisions to projections for … Continued

Budgets & fiscal events
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Public spending
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Economy and public finances

Pressing the reset button: the public finance options facing the new Chancellor at the Autumn Statement

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In the run up to the Autumn Statement, the Chancellor has already indicated the need for a fiscal ‘reset’. While this has been over-interpreted as a hint of a radical shift in macro-economic policy, it simply represents recognition of the need to drop his predecessor’s fiscal pledges if he is to avoid making significant additional … Continued

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