Economics Observatory | Questions and answers about coronavirus and the UK economy

Should companies be allowed to buy back their own shares?

During the pandemic, there has been severe hostility to firms buying back their own shares, a practice only made legal in the UK in 1981. Opposition to stock repurchases is associated with allegations of ‘short-termism’, but there is little evidence to support such claims.

Prices & interest rates

How are economic models adapting to rising inequality and the pandemic?

Over the past 15 years economic models have evolved to place the differences between individuals at their heart. This new breed of model is helping us understand the implications of rising inequality, the pandemic and the recovery.

News

Economic evolution: fast and slow

Economics is evolving, with researchers developing new ideas and tools for the modern world. Economies themselves are harder to shift, as a piece on pay in Britain shows. At the Observatory we are changing too, with lots of new projects and events to tell you about in this week’s letter.

Nations, regions & cities

Update: What has been the impact of Covid-19 on Northern Ireland’s economy?

Given the resurgence of the virus and a bigger fall in Northern Ireland’s GDP than expected, policy is focused on restoring public health and maintaining some stability of jobs and incomes. But delays in tackling underlying economic weaknesses will have long-term costs.

Jobs, work, pay & benefits

Ethnic minorities and the UK labour market: are things getting better?

Comparison of disparities in pay, employment and unemployment among different ethnic groups in the UK shows that there has been little change over the past 25 years. Indeed, for black, Pakistani and Bangladeshi men and women, pay gaps with white men and women have widened.

Crime & policing

How are crime trends in England and Wales changing during the pandemic?

In the first lockdown, crime was lower except for anti-social behaviour and drug offences. As economic effects of the pandemic change the incentives to break the law, deprived areas have seen a rise in acquisitive crimes, such as burglary, shoplifting and bicycle theft.

Prices & interest rates

Do we need a new constitution for central banking?

The global financial crisis, persistently weak growth and now Covid-19 have created tensions between politics and central banking. The time is ripe for a refreshed constitution, making clear the purpose of independent central banks, and what should fall to fiscal authorities.

News

Jabs and jobs

Over a year into the Covid-19 crisis, many of the questions that the Economics Observatory was set up to answer remain critical. Protecting public health and promoting economic health are deeply interconnected – and policy should aim for as much as possible of both.

Prices & interest rates

What will be the impact of changes in the US monetary policy framework?

In August, America’s central bank, the Federal Reserve, announced two important shifts in its monetary policy strategy. The extent to which these changes will affect the economic recovery depends on the expectations of households and firms about future inflation.

Health, physical & mental

Who should be vaccinated first?

Limited supplies of Covid-19 vaccines mean that hard choices need to be made. There have been a variety of different national strategies for deciding who should be priorities for the first doses. Each method of allocation raises health, economic and ethical issues.

Jobs, work, pay & benefits

Update: How is coronavirus affecting the self-employed?

A year into the Covid-19 crisis, it is widely recognised that the UK’s self-employed workers have been among the hardest hit. Survey evidence shows that the latest lockdown is once again leaving the self-employed with lower incomes and substantially reduced hours.

News

Trading blows

The growing queue of ships sitting idle in the Suez Canal illustrates the vulnerability of the interconnected global economy to trade disruptions. Tensions between the UK and the EU over vaccine exports are a reminder that cooperation is vital, especially in a crisis.

Public spending, taxes & debt

Who has financed higher government spending during the pandemic?

Borrowing by the UK government has hit peacetime highs this year. Often such increases in public debt rest on borrowing from abroad – but in this crisis, a sharp rise in domestic saving by households has offset public spending. In effect, the government has borrowed from taxpayers.

Trade & supply chains

How is the Brexit trade agreement affecting the Welsh economy?

The new trading arrangements between the UK and the European Union have led to big disruptions for many businesses in Wales, particularly those in sectors that previously depended on seamless border processes, such as agriculture, automotive and aerospace.

Data stories

Did sickness absence among UK workers rise or fall in 2020?

New data on the UK labour market indicate that there has not been an increase in overall sickness absence during the pandemic. But there has been a rise in working hours lost among key workers and other occupations that put staff in direct contact with the public.

All Answers