Economics Observatory | Insights on the UK and global economy

What was the economic significance of the 1956 Suez crisis?

The Suez crisis was not the cause of Britain’s relative economic decline, but it exposed deep-seated weaknesses: the vulnerability of sterling; the constraints imposed by the balance of payments; and the difficulty of sustaining an international reserve currency with inadequate economic strength.

Productivity & growth

Have better data solved the UK’s productivity puzzle?

Past productivity trends shape forecasts of future productivity, which drive the fiscal forecasts at the centre of UK policy debate. Unfortunately, the recent revision to measurement of hours worked has barely changed the growth of the measure that matters most for fiscal space: output per worker.

Energy & climate change

How have economists thought about climate change?

Some economists have been at the forefront of debates about policies to combat global warming. Research over the past three decades has explored issues around the likely effects of climate change; when to take action; and how to achieve efficient reductions in greenhouse gas emissions.

DATA HUB

New budget, new numbers

The OBR’s October forecasts for the UK are less favourable than March’s: higher borrowing, lower growth in 2027, higher inflation and lower household incomes. Use the drop-down to switch between measures.

Click the chart to see where UK public debt was ahead of the 2026 autumn budget.

Public spending, taxes & debt

Is the Eurozone heading towards a new sovereign debt crisis?

High yields on government bond in many advanced economies are leading some to speculate about a looming debt crisis. Lessons from the Eurozone’s experience with Greece in 2010 suggest that while a full-blown drama is yet to unfold, the European Central Bank must stand ready to intervene if needed.

MAGAZINE

Read the latest edition of our magazine here

In 2023, ECO magazine marked the 300th anniversary of the birth of Adam Smith. Now, it is 250 years since the publication of his pioneering book, The Wealth of Nations.

Nations, regions & cities

Fiscal devolution in England: what lessons from Scotland’s experience?

The UK government aspires to boost regional growth by letting local leaders retain a share of tax revenues such as income tax and business rates. Scotland’s experience suggests that any benefits of such fiscal devolution will depend on the design of its core financial and institutional arrangements.

Lessons from history

The Wealth of Nations at 250: how did Adam Smith think about the world?

To understand the core ideas in what is widely regarded as the founding text of economics, it is useful to revisit other works by its author, as well as the philosophies that informed his thinking, not least how successive generations of scholars had made sense of an apparently disorderly universe.

Energy & climate change

Should the UK government allow more North Sea drilling for oil and gas?

In considering a return to North Sea exploration, five arguments relate to climate and clean energy: one’s bad; two provide a genuine case for limited additional production; and two strengthen the case against it. On balance, they suggest that an open-ended programme of new drilling would be unwise.

Banks & financial markets

Can higher inflation expectations ever stimulate the economy?

Managing inflation expectations is only part of today’s challenge for monetary policy-makers. In times of geopolitical tensions and repeated economic shocks, they must also ensure that their communications with households and financial markets keep uncertainty about future inflation under control.

News

Nice work

Paid work fills up to a third of the waking hours of people with jobs. Hence the growing focus on what influences the quality of that time – what makes a ‘good job’ – as well as how the world of work is changing in the face of AI, net-zero goals and shifting demographics.

Health, physical & mental

Is our economy making us sick – and what can we do about it?

Rates of chronic illness are rising in the UK, taking a toll on the NHS, the public finances and the wider economy. But illness is not produced in the health service alone. Understanding where it comes from has profound ramifications for our vision of progress.

News

An apple a day

Across the world, people are living longer, healthier lives than ever before. Yet in some rich countries, including the UK, progress has stalled or reversed. Policy responses must ensure that jobs, local economies and food systems support good health – and that healthy choices are easier to make.

Health, physical & mental

How are weight-loss drugs changing our food shopping?

American households with at least one user of GLP-1 weight-loss medications reduce their spending on groceries by 5.3% in the first six months of starting the treatment, with the biggest declines in snacks and sweets. But buying habits largely return to normal once consumers stop taking the drugs.

Productivity & growth

How do health inequalities shape regional economic performance in the UK?

The UK has some of the widest disparities in regional economic performance among advanced countries. Evidence suggests that health inequalities between different parts of the country are an important part of the explanation for the geographical variations in employment, inactivity and productivity.

All Answers