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

How do large-scale pandemics affect inequality?

Research on past pandemics suggests that they can have significant effects on inequality and poverty. But while the Black Death triggered a systematic decline in wealth inequality in medieval Europe, the Spanish flu of 1918-19 led to rises in both poverty and income inequality.

Health, physical & mental

News: The end of the beginning?

While the number of UK Covid-19 cases remains worryingly high, particularly in the light of reports that the NHS could be weeks from becoming overwhelmed, by some measures there have been improvements. But while the vaccine may quell the pandemic, its economic effects will remain for years to come. Is this the end of the beginning?

Business, big & small

Have government policies helped small firms cope with coronavirus?

Small firms around the world have been hit hard by the Covid-19 crisis. While governments have mobilised substantial resources in support, many measures have had limited effect, in part due to smaller enterprises struggling to access information on relief loans.

Energy & climate change

‘Backyard wildlife’: has the pandemic reconnected us with nature?

As lockdowns have changed the ways in which people spend their time and money, many have made a priority of engaging with the local natural environment. This has led to investments in nature, increases in wildlife populations – especially birds – and improvements in wellbeing.

Jobs, work, pay & benefits

Data: Pretty vacant – a small revival in job openings

UK vacancies collapsed during the Covid-19 crisis. Recent data suggest that they may be back on the rise, if only to levels seen in the 2008-11 recession. But while this trend is welcome, it is unusual that vacancies are now rising alongside growing unemployment.

Public spending, taxes & debt

Should a UK wealth tax be devolved?

The Covid-19 crisis has renewed interest in the merits of introducing a tax on net wealth in the UK. A key issue to consider is whether such a tax should be operated uniformly across the country or with some elements devolved to the governments in Edinburgh, Cardiff and Belfast.

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.

Covid-19: Economics meets epidemiology

Health, physical & mental

News: High costs of indecision

If there is one lesson that policy-makers should have learned since the pandemic began, it is that indecision is costly. This has proved true repeatedly for public health and is just as relevant for education. Lives have been lost; and young people’s futures damaged.

Science, technology & innovation

How is Covid-19 affecting firms’ adoption of new technologies?

Fears that the impact of the pandemic on technology adoption will exacerbate the UK’s problem of persistently weak productivity growth are not necessarily justified. Recent evidence gives cause for cautious optimism, as many firms try to ‘innovate their way out of the crisis’.

Prices & interest rates

Data: The changing cost of Christmas dinner

New data make it possible to track Christmas prices – from presents in stockings to coal for the fire. In terms of hours of work needed to afford these items, costs look surprisingly stable over time. Yet there are big differences depending on what you buy and where you live.

Banks & financial markets

Are Bitcoin and other digital currencies the future of money?

The rising price of Bitcoin during the pandemic has renewed interest in private digital money. While it is unlikely that Bitcoin will replace existing currencies, the emergence of ‘cryptocurrencies’ and ‘stablecoins’ has prompted exploration of central bank digital currencies.

Covid-19: Paying for the pandemic

Schools, universities & training

How should we assess school students now that exams have been cancelled?

To avoid a repeat of last summer’s exam chaos, the government must decide quickly on alternative assessment measures. There is a strong case for A-level students to receive in-class testing – with flexible timing and content – to take account of differences in their learning experiences.

Science, technology & innovation

What does 95% effective mean for a Covid-19 vaccine?

Pfizer/BioNTech’s vaccine was reported as being 95% effective. This number is not your chance of staying Covid-free after vaccination: rather, it estimates how much your chance rises relative to not being vaccinated. With the vaccine, your chance of staying Covid-free is in fact 99.96%.

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