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UK Labour Shortages Persist, As Inflation Outruns Wage Gains
The UK labour market remains a challenge for recruiting. Employers face stiff competition for workers amid labour shortages. Wages are rising briskly, but prices have risen even faster – exacerbating...
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The Looming Economic Challenge Most People Aren’t Aware Of
How does economic growth happen? It’s a hard question to answer but economists have tried for centuries. Perhaps the most famous model came from MIT economist Robert Solow in 1956. The Solow growth...
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Anarchy in the U.K.: Labour Shortages Amid Soaring Inflation
First, start with the paradoxical good news: job vacancies are booming and now exceed unemployed persons for the first time ever. Job vacancies hit a record high of 1.288 million, while the number of...
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Economic Storm Clouds Gathering Around the World
Countries across the world are facing high inflation, economic fallout from a pandemic, and an energy crisis caused by the war in Ukraine. While not unique to the Western world, these issues are...
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Turbulence in the United Kingdom
It’s been a turbulent week for the United Kingdom. Puzzling financial policy and political drama latched onto an ongoing energy crisis and a tight labour market, triggering volatility not seen in at...
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Is the UK Headed for a White-Collar Recession?
The U.K. economy has performed quite poorly since the beginning of the pandemic, being one of the few advanced economies that has not surpassed its 2019 Gross Domestic Product (GDP) level yet. To...
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Will the Bank of England Engineer a Long-Lasting Recession?
We recently published a piece on the U.K. economy in which we discuss the outlook for economic growth and inflation and what it could mean for the labor market and blue- vs. white-collar occupations....
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The BoE’s Renewed “Optimism” About the Economic Outlook
The Bank of England (BoE) just hiked its policy rate by another 50 basis points to 4% as U.K. inflation peaked at just over 11% at the end of last year. And even with the commodity price shock...
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Unfortunately, Hard And Soft Data Agree In The UK
We recently noted the divergence between soft economic indicators and hard economic data for the U.S. and Germany. For both countries, surveys and other soft data have hinted at a severe economic...
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The United Kingdom Is Missing Workers
GDP shortfalls for years to come? We recently wrote several blog posts about the U.K.’s short-run economic outlook. The Bank of England (BoE) was still extremely pessimistic at the end of last year,...
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In the United Kingdom, Consumers Perk Up
We recently published several articles on the so-called “vibecession” – consumers and businesses feeling that we are already in a downturn in the U.S., Germany, and the U.K. while actual economic data...
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Demography is Destiny
The post-pandemic labor market has been extremely tight with many vacancies left unfilled. Many advanced economies are facing severe demographic headwinds. This means that the worker shortage will...
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BoE and Treasury at Odds About the UK’s Long-Run Capacity to Grow
The 110-billion-pound gap The short-run outlook for the U.K. economy is now looking brighter than last year. Business and consumer sentiment improved in the beginning of 2023 and so did the Bank of...
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The Wage-Price Spiral: A Uniquely British Problem?
Inflation and wages have surprised to the upside The United Kingdom is the only G7 economy that still has a slightly lower GDP compared to the end of 2019. It is also the one country where inflation...
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The Bank of England Flips: Recession Averted in 2023
The recession was revised away The Bank of England (BoE) hiked their policy rate to 4.5% on May 11 as the U.K. economy continues to suffer from high inflation, with consumer prices rising by more...
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The Upcoming UK Mortgage Crunch
U.K. economic data has come in better than expected in 2023. Even the housing market has held up well, though it remains vulnerable. A significant portion of mortgages will see their rates increase...
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UK Migration has Picked Up After Brexit
Despite Brexit, the U.K. has recently seen a surge in inward migration with non-EU nationals more than making up for the negative net outflow of EU nationals since 2020. The U.K. will remain a popular...
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The State of Global Manufacturing: US Slowing and Europe Stalled
The manufacturing industry recovered early on during the pandemic but is now seeing a severe slowdown even as services are doing well. In the first two years of the pandemic, households shifted...
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The Dire State of National Healthcare in the UK
The UK had one of the highest vaccination uptakes One of the biggest global success stories in recent years are the COVID vaccines that came on the market and were approved by governmental...
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Housing is Swallowing the UK Economy
The U.K.’s productivity problem The U.K. economy has had a severe productivity growth problem since the Great Recession. The chart below shows that if productivity had grown at the previous trend...
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UK Economy: No Longer Underperforming?
Massive GDP revisions in the U.K. have changed the outlook The U.K. was believed to be a massive underperformer in terms of the economic recovery following COVID. The latest GDP numbers showed that...
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“Greedflation” Isn’t to Blame for High Inflation
The wrong culprit Over the last two years as inflation has surged, big business has been blamed for jacking up prices amidst a cost-of-living crisis. Corporate greed was identified as one of the big...
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The Bank of England’s Next Policy Blunder? The QE Time Bomb
Quantitative Easing: What is it good for? Central banks usually change interest rates to steer the economy. They increase the interest rate when the economy risks heating up and lower the rate during...
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The BoE is Sacrificing the Labor Market… Blindly?
Inflation has been way above target for more than two years now, giving monetary policy makers at the Bank of England (BoE) a severe headache. In recent remarks, BoE officials have made it clear that...
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The UK Labor Market Does Not Reward Graduates
Too many problems to count Let’s not sugarcoat it: the U.K. economy and labor market are suffering from various problems. Many of them are structural — a dysfunctional housing market, low...
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Tory Tax Cuts: Money Illusion is Doing Some Heavy Lifting
110 measures Chancellor Jeremy Hunt announced 110 growth measures in the Autumn Statement last week. While most of them will be relatively inconsequential, there are several measures that will affect...
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UK Outlook: Exceeding Expectations but… Stagnating?
There is considerable uncertainty about the unemployment data As I explained earlier this year, the Office for National Statistics (ONS) has ceased to publish unemployment data based on the U.K....
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UK’s GDP Growth Looks Nice on the Surface
The UK’s stability in international GDP rankings Bloomberg recently reported some good news that should cheer up readers in the U.K. While most advanced economies are expected to decline in the ranks...
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Push and Pull Factors: Migration to OECD Countries at Record High
Migration to OECD countries is rising The topic of migration has been trending again throughout 2023. This is not surprising as many OECD countries, have experienced a significant surge in net...
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Post-Brexit, the UK is Becoming a Service Export Superpower!
What are service exports? One of the fundamental changes economies have been going through over the last century is a shift in economic activity from industrial production to services. In advanced...
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The U.K. Slipped Into Recession: What Does That Mean for the Labor Market?
Outperforming expectations but underperforming peers While the U.K. economy has vastly outperformed growth expectations set last year, it needs to be said that the bar was pretty low. More than a...
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The UK is in the Midst of a White-Collar Recession
Even as the U.K. economy experienced a very shallow economic contraction last year, the labor market continued to add jobs. However, employment gains varied widely by industry. White-collar workers...
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Immigration Unexpectedly Thwarts the Population Time Bomb
A population time bomb has been heralded as imminent for many years. Proponents of the theory forecast steep and rapid declines in population levels. However, these forecasters have forgotten one of...
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