Living standards· Labour market New Year’s Outlook 2023 They think it’s all over… it isn’t now 30 December 2022 by Torsten Bell 2022 was a truly horrendous year, dominated by the arrival of double-digit inflation that drove a 3.3 per cent (or £800 per household) hit to real disposable incomes, the biggest annual fall in a century. This has left three-quarters of lower-income working families cutting back this Christmas. Against that difficult backdrop, this note considers what … Continued READ MORE
Universal Credit· Childcare· Welfare Inconsistent Incentives How the overlap between Universal Credit and the High Income Child Benefit Charge limits work incentives 28 December 2022 by Mike Brewer and Karl Handscomb and Gavin Kelly It is well known that some groups in the UK face high effective tax rates, but the most punitive rates of personal tax arise in a situation that has been almost completely overlooked. Families with an earner on £50,000 to £60,000, whose Child Benefit is withdrawn and who are also eligible for Universal Credit (UC), … Continued READ MORE
Economy 2030 German Reunification Lessons from the German approach to closing regional economic divides 16 December 2022 by Kathrin Enenkel and Felix Rösel In this essay, part of our Navigating Economic Change series, Kathrin Enenkel and Felix Rösel explore Germany’s sudden reunification in 1990, a large shock to which the German government responded with unprecedented scale, and the implications and lessons the German experience holds for the UK today. Germany’s sudden reunification in 1990 was a large shock to which the … Continued READ MORE
Economy 2030· Net zero Hitting a brick wall How the UK can upgrade its housing stock to reduce energy bills and cut carbon 12 December 2022 by Asaad Anis-Alavi and Lindsay Judge and Jonathan Marshall and Charlie McCurdy and Daniel Tomlinson This briefing note considers how policy makers should square up to one the hardest part of the net zero challenge: insulating the nation’s homes. It highlights an overlooked problem, the 9 million walls that need insulating at considerable costs, and proposes a series of new regulations to ensure progress is made by 2035, lowering carbon emissions and cutting energy bills in the process. READ MORE
Monetary policy· Macroeconomic policy Macroeconomic Policy Outlook: Q4 2022 10 December 2022 by Emily Fry and Sophie Hale and James Smith [1] The UK is experiencing high levels of inflation not encountered for 41 years, reaching 11.1 per cent in October. But what matters most for both people and policy makers is how persistent this inflation is, which will influence how long the cost of living crisis will last. This inflation has been driven by global … Continued READ MORE
Economy 2030· Skills Train in Vain? Skills, tasks, and training in the UK labour market 5 December 2022 by Nye Cominetti and Rui Costa and Andrew Eyles and Kathleen Henehan and Sandra McNally Human capital and skills are important for improving the UK’s labour market and economic performance. This note assesses how the skills needed in the UK labour market have changed over past decades, and how well placed our system of training – and particularly on-the-job training – is to help us adapt to these changes. Some … Continued READ MORE
Labour market· Low pay Constrained choices Understanding the prevalence of part-time work among low-paid workers in the UK 30 November 2022 by Louise Murphy This is the fifth output from the Resolution Foundation which contributes to the Young person’s future health inquiry. It discusses the concentration of part-time work among low-paid workers (including young people), and explores the reasons why low-paid workers work part-time, and the extent to which low-paid workers experience agency over their working hours. It draws … Continued READ MORE
Budgets & fiscal events· Economy and public finances Help today, squeeze tomorrow Putting the 2022 Autumn Statement in context 18 November 2022 by Torsten Bell and Mike Brewer and Molly Broome and Nye Cominetti and Adam Corlett and Emily Fry and Sophie Hale and Karl Handscomb and Jack Leslie and Jonathan Marshall and Charlie McCurdy and Krishan Shah and James Smith and Greg Thwaites and Lalitha Try This report presents Resolution Foundation’s analysis of the 2022 Autumn Statement. In the face of grim economic and fiscal forecasts, Jeremy Hunt announced energy support today but tougher times tomorrow, with stealth tax rises for the middle and top of the income distribution followed by spending cuts after the next election. READ MORE
Economy 2030 The Thatcher Legacy Lessons for the future of the UK economy 17 November 2022 by David Soskice and John Muellbauer In this essay, part of our Navigating Economic Change series, economists John Muellbauer and David Soskice examine the turbulent 1980s to consider its legacy and lessons for today’s policy makers. In the next decade, the UK faces major structural changes. The drive to reach Net Zero in greenhouse gas emissions by 2050, with a major interim decarbonisation target … Continued READ MORE
Economy 2030 Estonia’s radical transformation Successes and failures of “crazy ideas” 17 November 2022 by Rainer Kattel and Ringa Raudla In this essay, part of our Navigating Economic Change series, Rainer Kattel and Ringa Raudla explore Estonia’s apparent digital and economic success, looking at the successes and failures of ‘crazy ideas’ in the country’s transformation. Estonia is often viewed as the most successful case of transition from communism to free market liberal democracy. Yet, this success contains at … Continued READ MORE
Economy 2030 Lessons from Italy’s economic decline Exploring how some of Italy’s traps may become future challenges for the UK economy 17 November 2022 by Giampaolo Galli and Lorenzo Codogno In this essay, part of our Navigating Economic Change series, Lorenzo Codogno and Giampaolo Galli provide a short history of Italy’s economic underperformance, before digging into the root of Italy’s growth problems, and exploring how some of Italy’s traps may become future challenges for the UK economy. Italy has faced a series of economic crises in the past 50 … Continued READ MORE
Economy 2030 Adapting Well to New Circumstances? UK Experience in Changing Times 16 November 2022 by Nicholas Crafts In this essay, part of our Navigating Economic Change series, Nicholas Crafts offers a panoramic account of the last century and more of economic shocks to the UK, assessing how well the economy has adjusted to new circumstances, and drawing out implications for our country’s current predicament. The UK economy faces several significant challenges in the next … Continued READ MORE
Budgets & fiscal events· Economy and public finances One statement, two challenges How the Autumn Statement is likely to respond to weaker public finances and high energy bills 15 November 2022 by Torsten Bell It’s been brought forward, delayed and renamed, but the Autumn Statement is finally happening this week. While the timing has been uncertain, from the coverage of recent weeks you’d think its purpose was a very clear story of two Prime Ministers: Liz Truss created a fiscal black hole and Rishi Sunak is now filling it … Continued READ MORE
Intergenerational Centre An intergenerational audit for the UK 2022 14 November 2022 by Molly Broome and Sophie Hale and Nye Cominetti and Adam Corlett and Karl Handscomb and Louise Murphy and Lalitha Try Our fourth Intergenerational Audit – part of the ESRC-funded Connecting Generations partnership – provides an analysis of economic living standards across generations in Britain. In so doing, it analyses the latest data across four domains: Household incomes and costs; Jobs, skills and pay; Wealth and assets; and Housing costs and security. In each of these domains, … Continued READ MORE
Economy 2030 Adopt, adapt and improve A brief look at the interplay between labour markets and technological change in the UK 10 November 2022 by Rui Costa and Yuanhang Yu Worries that jobs will be lost to automation are not new, but have been heightened since the release of Frey and Osborne’s 2013 study, which warned that nearly half of jobs in the US were at ‘high risk’ of automation. Nearly a decade on, this short briefing note looks at both the current and longer-term … Continued READ MORE
Labour market enforcement· Labour market Policing prejudice Enforcing anti-discrimination laws in the workplace 8 November 2022 by Hannah Slaughter This briefing note is part of a three-year programme of research exploring labour market enforcement generously funded by Unbound Philanthropy. In it, we investigate the scale and nature of workplace discrimination, and consider how anti-discrimination rules can be enforced to greater effect. READ MORE
Monetary policy· Macroeconomic policy The art of expectations management A bleak outlook from the Bank of England as it scales back rate hike expectations 3 November 2022 by James Smith The Bank of England has raised rates by 75 basis points today – the eighth successive increase and the largest since 1989 – to 3 per cent, the highest since November 2008. Despite this historic rise, the big news was that the Bank signalled very clearly that market expectations for further rate rises had gone … Continued READ MORE
Budgets & fiscal events· Economy and public finances Mind the (credibility) gap Autumn Statement preview 1 November 2022 by Torsten Bell and Adam Corlett and Jack Leslie and Jonathan Marshall and Felicia Odamtten and Krishan Shah and James Smith and Lalitha Try In our Autumn-Statement preview slidepack, we present new analysis that explores the economic outlook ahead of the Autumn Statement on 17 November, and the critical decisions that the new Prime Minister and Chancellor must make. With the latest political turmoil triggered by attempts to completely rewrite economic policy, Rishi Sunak and Jeremy Hunt are under … Continued READ MORE
Welfare Sticking plasters An assessment of discretionary welfare support 28 October 2022 by Karl Handscomb This briefing note looks at discretionary welfare support in recent years, including crisis provision, Discretionary Housing Payments, and more recently the Household Support Fund. Our analysis shows that discretionary support is increasingly being used as a sticking plaster for broader benefits cuts. READ MORE
Budgets & fiscal events· Public spending· Economy and public finances· Tax Cutting tax cuts Jeremy Hunt rewrites Government’s economic policy 17 October 2022 by Torsten Bell and Adam Corlett and Karl Handscomb and Jonathan Marshall and James Smith The new Chancellor has rewritten UK economic policy in order to reduce the pressure on the Bank of England to raise interest rates and the Treasury to deliver spending cuts. He has now reversed 60 per cent of the tax cuts announced less than four weeks ago and committing to scale back support for energy … Continued READ MORE
Monetary policy· Housing Interesting times Assessing the impact of rising interest rates on mortgagors’ living standards 15 October 2022 by Lindsay Judge and Jack Leslie and Krishan Shah R. I. P. low interest rates: the cost of borrowing is seriously on the rise. Inflationary pressures in the economy have been pushing interest rates up for some time, and events since the Government’s mini-budget in September increased market expectations of how high interest rates will rise, and brought forward the date at which they … Continued READ MORE
Universal Credit· Welfare The Long Squeeze Benefit uprating policy for April 2023 13 October 2022 by Adam Corlett and Lalitha Try To offset the impact of tax cuts on the public finances, the Government is considering how it might cut spending. One option that has been discussed is the possibility of raising some benefits in line with earnings rather than inflation next April. This paper explores what this might entail, the potential savings and impacts, and … Continued READ MORE
Economy 2030 Navigating Economic Change Lessons from abroad and history 12 October 2022 As the UK is buffeted by the economic shocks and challenges of the 2020s, the Resolution Foundation and LSE Economy 2030 Inquiry is publishing a series of essays examining how policy makers from a range of advanced economies, including the UK in the recent past, have managed periods of disruptive economic change. READ MORE
Monetary policy· Macroeconomic policy Macroeconomic Policy Outlook: Q3 2022 10 October 2022 by Jack Leslie and Krishan Shah and James Smith In this edition of the MPO we consider the nature of the inflation challenge facing the Bank of England and the impact of the ‘Mini Budget’ on it. Here it is important to remember that the colossal scale of the energy shock – which for household incomes could be three times the size of that … Continued READ MORE
Labour Market Outlook· Labour market Labour Market Outlook Q3 2022 6 October 2022 by Charlie McCurdy In the aftermath of the pandemic, the emergence of long Covid has increased focus on the relationship between work and ill health. But the prevalence of long Covid, thought to affect around 1 million workers, is lower than the pre-pandemic increase in the number of working-age disabled people (up by 2.3 million since 2013), with … Continued READ MORE
