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

Regaining balance

As restrictions ease and many businesses across the UK welcome customers back through their doors, there is hope that the economic recovery is beginning. But jobs and our communities may take longer to bounce back.

Recession & recovery

How has coronavirus affected social capital in the UK?

Social capital – a measure of the strength of our communities and society as a whole – has been declining in the UK in recent years. Rebuilding these bonds will be vital to meet the challenges of inequality, climate change and recovery from the crisis.

Data stories

A year in the UK labour market: what’s happened over the coronavirus pandemic?

Past recessions saw steep rises in unemployment or wage cuts. Tracking the performance of the UK labour market during Covid-19 shows that the most notable effects of a downturn caused by restrictions on mobility are the more dynamic aspects: falls in hours, hiring, job quits and house moves.

Jobs, work, pay & benefits

How might Uber drivers’ new status as workers affect the gig economy?

The Supreme Court has ruled that the tens of thousands of Uber drivers in the UK should be treated as workers rather than as being self-employed. The decision may force the company and other platform-based services to make big changes in how they operate.

Business, big & small

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.

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.

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

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.

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.

Trade & supply chains

How are Covid-19 and Brexit affecting the products that UK firms trade?

The pandemic and the UK’s departure from the European Union present twin challenges for domestic firms engaged in exporting and importing. The extent to which they adapt their product mixes in response to changing economic conditions shapes trade and output growth.

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.

All Answers