In the FT’s annual new year forecasts, I seem to be one of the only people not forecasting a slowdown in the UK in 2017. Why? Because growth was strong in 2016, productivity is only starting to pick up as the labour market tightens and there’s no evidence of inflation from overheating yet, although of course we may see some from exchange rate depreciation, if that persists. That’s not to say that over the medium-term there wont be negative economic (and other) effects from Brexit, depending on the results of the negotiation. But they will be measured in the medium term, not now.
It’s always a risky thing to point out when one diverges from the crowd, particularly when talking about the future. But I also think you should say it as you see it. So that’s what I’ve done. If I’m proved wrong, for reasons I don’t currently understand, I will say that too.
When politicians talk about the need to raise economic productivity, its often in the context of infrastructure investment and boosting high productivity sectors (finance, engineering, biotech etc). However our low pay sectors are so large that productivity improvements there could not only have macroeconomic consequences but do a lot for other policy objectives such as poverty alleviation. I’m delighted that my recent research report on these issues for the Joseph Rowntree Foundation is picked up in today’s Guardian.
I’ve been keeping a little spreadsheet of official UK public debt forecasts since 2010 (I know, sad life etc….). Here’s the chart that brings it all together and shows that whereas in 2010 debt was expected to peak at 70% of GDP in 2013-14 as the effects of the financial crisis worked their way through, in fact that never happened and it kept on rising.
Yesterday’s data instead shows debt is now expected to peak at a massive 90% in 2017-18. Here’s the picture – each line represents the forecast made at that particular budget or autumn statement.
Pleased that my research report for the Joseph Rowntree Foundation was published today. It’s a round up of a few years of work for various clients around issues relating to low pay, motivation, progression and productivity in the UK retail sector. Here’s the link.
The pound’s fall is merely the crowd-sourced view of Britain’s perceived economic prospects. If Brexit comes to be seen as good for Britain it would reverse. Some thoughts on the plight of sterling and what British consumers have in common with Donald Rumsfeld, written for Portland’s Brexit unit, here.
A post demonstrating weariness with an apparent need to imply large dramas from small shifts in data, sparked by today’s monthly inflation data.
I wrote a piece for Progress magazine that attempts to answer the question – if he were writing today, what would Tony Crosland pick out as the determinants of class in British society? It draws on some great work by the LSE and also an analysis we did on the UK’s wealth distribution recently. Once we understand how society is structured, we can consider the policy implications. Here’s the link.
Philip Hammond’s Conservative party conference speech gives some long-overdue clues as to the approach he will take at the Autumn Statement on November 23rd. Read more.
Triumph or disaster? In terms of the UK economy, it could be either depending on who you believe and what newspapers you read. Here’s a round-up of the data so far, as of the second week in September. But of course everything could change in the weeks and months ahead. But if the government manages to set out a clear path and provide some certainty at least as to what is known and what is unknown, that will help everyone. Read more here
In the run up to the referendum on 23rd June, business confidence fell a little compared to the previous two years as decision-makers felt a sense of unease simply due to the uncertainty that came from such a large economic policy decision looming on the horizon. Immediately following the result the economy skipped a beat: the survey evidence in July was pretty dire. However the August confidence data is not dissimilar to the pre-referendum levels. Businesses have basically swapped the uncertainty they felt around the referendum result for the uncertainty as to what it means. Read more