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WHAT ARE THE FUTURE PROSPECTS FOR UK INFLATION?

Measures of price inflation in the UK have fallen in recent months, but this
comes in part because the high rates of early 2023 have dropped out of the
calculation. Domestic and geopolitical risks will affect whether inflation
continues to drop over the rest of this year and beyond.



News


IDEAS FOR THE UK: ELECTION ECONOMICS WEEK ONE

Should the UK have compulsory national service? Do we need more police? How bad
are NHS waiting lists? What about our failing water companies? Over the past
week, the UK has seen a host of new policy proposals in these areas.


Banks & financial markets


WHY DID THE BANK OF ENGLAND NEED A REVIEW OF ITS FORECASTING RECORD?

Ben Bernanke, economics Nobel laureate and former chair of America’s central
bank, the Federal Reserve, was invited to evaluate the Bank of England’s
forecasting for monetary policy-making and communication. While his review makes
a number of recommendations, some important issues are missing.


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VAT IN THE OECD

All OECD members have a value-added tax, or equivalent, except for the US. The
UK is close to the middle, with a higher VAT rate than 14 member states, and a
lower rate than 18.


Public spending, taxes & debt


WHICH TAXES ARE BEST AND WORST FOR GROWTH?

Tax affects economic growth by reducing consumer spending and lowering
incentives to invest. But different fiscal policies have variable overall
economic effects, with taxes on income better than those levied on corporate
profits in terms of their wider impact on GDP.


MAGAZINE


READ THE LATEST EDITION OF OUR MAGAZINE HERE

Over the current parliamentary term, Wales, Scotland and Northern Ireland have
each faced unique challenges as well as common ones, such as rising economic
inactivity. Measures of output, productivity and the labour market indicate
where the devolved nations could improve their economic prospects.


Public spending, taxes & debt


WHAT ARE FISCAL RULES AND HOW HAVE THEY WORKED IN THE UK?

Since the 1990s, UK governments have set constraints on how much they can borrow
to fund public spending net of tax revenues, as well as total public debt
relative to GDP. These targets are required by legislation but have been
frequently adjusted in response to changing circumstances or priorities.

News


PAUSE FOR THOUGHT

The UK faces crises – from housing and health to slow economic growth – at home,
as well as those of a more global nature – stemming from climate change and
geopolitical challenges. The country will soon vote for the party they believe
best placed to rise to the occasion.


Health, physical & mental


WHY IS THE NHS STRUGGLING?

NHS performance in many areas – including for ambulances, emergency care and
pre-planned treatment – is worse than before the pandemic. There are many
plausible explanations for this poor record, which makes it hard to identify
short-term solutions.


Productivity & growth


COULD A NEW POLICY INSTITUTION HELP SOLVE THE UK’S PRODUCTIVITY PROBLEM?

Comparatively sluggish productivity growth is one of the UK’s biggest policy
challenges. Past strategies to solve the problem have lacked commitment and
proper evaluation. One solution could be to establish a growth and productivity
institution to coordinate policies over the long term.

Productivity & growth


HOW CAN THE UK REVIVE ITS AILING PRODUCTIVITY?

The UK’s poor productivity limits wage growth and better living standards. But
the problem has no quick fixes. To boost productivity, policy-makers must
establish and stick to a long-term strategy that includes diverse sectors – from
technology and innovation to education, housing and transport.


Energy & climate change


IS THE UK ON TRACK TO MEET ITS CLIMATE COMMITMENTS?

The UK government has set ambitious emissions reduction targets to help tackle
climate change. But it is currently falling short, and more funding and policy
interventions will be needed to reach the ultimate objective of net zero.


Schools, universities & training


WHICH EDUCATIONAL POLICIES ARE MOST EFFECTIVE FOR EQUALISING OPPORTUNITIES?

Against a backdrop of poor productivity growth, severe skill shortages and
increasing educational inequalities in the UK since the pandemic, investment in
education and skills is essential. It requires policies that span from the early
years right through to adulthood.

Families & households


HOW CAN WE TACKLE THE UK’S HOUSING CRISIS?

With high property prices, rising rents and sluggish rates of new-build, the UK
is facing a crisis of housing affordability. A comprehensive strategy is
urgently needed, one that’s joined up with other key areas of public policy,
including taxation and investment in human capital.

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