Economics Observatory | Insights on the UK and global economy

Why do some people in the UK face marginal tax rates of over 60%?

Various adjustments to Britain’s tax and benefit system have created sharp spikes in marginal tax rates. Some families take home less than 40p of each extra pound they earn, blunting incentives to work or take promotions.

Playfair prize

Student data journalism

Trade & supply chains

Global defence spending: What next for European military procurement?

With its fragmented production process, European defence procurement is inefficient and uncompetitive in comparison to the United States. A new approach, prioritising cross-country collaborations, could improve things, but would not be without its own challenges.

DATA HUB

The cost of ageing

New analysis from EBRD quantifies the economic impact of falling birth rates and population ageing.

Between 2000 and 2023, demographic growth added around 0.3–0.4 percentage points per year to GDP per capita growth in regions such as emerging Asia, Latin America and sub-Saharan Africa. Looking ahead to 2024–50, this contribution largely disappears and turns negative in advanced economies and emerging Europe, where ageing is most advanced, and fertility is in decline.

Sub-Saharan Africa is the exception, with demographics continuing to support growth as the working-age share rises.

Click here to read Federica Coelli and Pablo García Guzmán on how falling birth rates reshape the global economy.

Productivity & growth

How could falling birth rates reshape the global economy?

More than two-thirds of humanity now live in countries where fertility has fallen below the level needed for a stable population. This fundamental demographic shift is transforming economies, raising questions about ageing populations, shrinking workforces and the sustainability of welfare states.

MAGAZINE

Read the latest edition of our magazine here

This week at the Economics Observatory, we explore issues around falling fertility and ageing populations – from why people in rich countries are having fewer children to the global economic consequences, and how demographic factors such as age shape wellbeing.

Health, physical & mental

How did Brexit affect the mental health of ethnic minority youth?

Research evidence suggests that the UK referendum on whether or not to remain in the European Union had uneven social consequences. Younger people from ethnic minorities living in areas of the country with stronger support for Brexit experienced a deterioration in their mental health after the vote.

Nations, regions & cities

Population ageing and decline: what policies might mitigate the downsides?

Along with the rest of the UK, Wales’s population is ageing and there is a real chance of population decline, posing significant risks to economic wellbeing. Policy-makers can learn from international evidence on boosting fertility, retaining population and attracting inward migrants.

Families & households

From costs to culture: what’s behind falling fertility in rich countries?

Fertility rates have fallen rapidly in the UK and other high-income countries in recent years. Education, economic uncertainty and changing gender roles are among the factors that have played a part. Keeping the combination of causes in mind is essential for designing effective policy responses.

Science, technology & innovation

Future shocked

From digital failures in the UK’s justice system to the Post Office tragedy and widespread anxiety about artificial intelligence across the world, the pace of technological change is testing the capacity of society’s core institutions to adapt and adopt.

Science, technology & innovation

The UK government’s digital transformation: how did it come about?

GOV.UK is intended to be the single point of online access for UK government information and services. The project leader in the Government Digital Service recounts the transformation in the early 2010s of over 2,500 fragmented public websites into a ‘boring’ but efficient and award-winning site.

Pensions, savings & investment

Is gold a safe haven for investors?

The price of gold has risen in recent years, highlighting the role of this precious metal as a stable investment. While the value of gold is resilient and protected from inflation, its stability is not guaranteed in times of crisis.

Science, technology & innovation

Who trusts AI?

AI tools like ChatGPT and Google Gemini have exploded in popularity over the last couple years. But while their adoption has undoubtably grown at a staggering speed, less is known about public attitudes towards the trustworthiness of these systems.

Crime, policing & justice

Trust and technology: what went wrong with the Post Office?

The Post Office scandal brought into sharp focus the risks associated with placing blind faith in technology. To learn from this troubling episode and start rebuilding public trust, policy-makers must challenge the idea of the infallibility of machines within the legal system.

Transport & infrastructure

UK land and property: what’s happening with freehold and leasehold reform?

For decades, landowners have fought to maintain the legal structure governing ownership and occupancy of multi-tenanted residential blocks. But growing awareness of the legal jeopardy of being a long-term flat occupier – plus the economic constraints of land law – have prompted demands for reform.

Crime, policing & justice

Will digital failures undermine trust in the justice system?

Multiple reports of digital systems failures in the justice system have emerged in recent months. These incidents highlight a central tension in justice reform: while digital tools may improve efficiency and accessibility, they also introduce risks that can erode public trust in legal institutions.

All Answers