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Reality check
Newsletter from 14 May 2021 This week, the prime minister confirmed that the next easing of lockdown restrictions in England will go ahead on Monday. With the number of vaccine doses administered climbing steadily and case rates as low as they were last summer, there is some optimism in the air – at least here […]
Science, technology & innovation
Should patents on Covid-19 vaccines be waived?
There is a global debate right now about whether vaccine patents should be waived to allow low-income countries to produce doses for themselves. This discussion has come to the fore particularly in the light of the growing crisis in India and across South Asia. As case numbers in the region surge, vaccination rates remain low. […]
Health, physical & mental
How does the market for vaccines work?
The Covid-19 pandemic is still raging across the world, with some countries such as India experiencing unprecedented infection numbers with significant effects on both population health, and social and economic wellbeing. In other parts of the world, much progress has been made in managing the disease, most notably in Israel, where almost 60% of the […]
Transport & infrastructure
What is the future of commuting to work?
There is a great deal of speculation about the permanence of recent changes to our lives brought about by Covid-19. Will we adopt our new patterns of consumption, using the internet for shopping and entertainment, and our new patterns of work, which to a large degree involve working from home? One commentary on the Economics […]
Jobs, work, pay & benefits
How might increases in the UK minimum wage affect jobs, work and pay?
On 1 April 2021, the rates of the UK’s minimum wage increased. For workers aged 22 and under, this involved changes to the National Minimum Wage. For those aged 23 or over, this was through a rise in the National Living Wage (NLW). New minimum wage rates are proposed each year by the Low Pay […]
Pensions, savings & investment
Does the stock market reflect the economy?
Fluctuations in the prices of financial assets in the stock market can sometimes seem to be inconsistent with what is happening in the rest of the economy – what’s sometimes referred to as the ‘real economy’. For example, in 2020, US GDP fell by 3.5% – the largest contraction since the end of the Second […]
News
Arms race
Newsletter from 7 May 2021 Well over a billion doses of coronavirus vaccines have now been administered around the world. But with a total global population of nearly eight billion and wide cross-country variation in the percentages of people vaccinated, a huge number of arms are still awaiting injections. And as the World Health Organization […]
Recession & recovery
Is higher productivity at odds with improved wellbeing in post-pandemic Wales?
The economic impact of Covid-19 has been severe across the UK, with Wales no exception. Restrictions on business activity have meant furloughing thousands of employees, and this has had a negative effect on how much workers are able to produce – their ‘labour productivity’. In Wales, this may have compounded an already sizeable and widening […]
Business, big & small
Update: Which firms and industries have been most affected by Covid-19?
The pandemic has affected all industries, but it has had a bigger impact on some firms and sectors than on others. The risks of infection from different activities, the ability of businesses to operate remotely and the policies to contain the spread of the virus have each played a role. These have all affected current […]
Aid & international development
Vaccine nationalism: why do some countries cooperate and others go it alone?
The UK’s rollout of vaccines is proceeding at a fast pace. Over 46 million doses have been administered and, at its peak, the rate briefly surpassed 800,000 injections into arms in one day. The vaccination effort has become a key focus of government policy, as it is the tool through which we hope to exit regulated […]
Lessons from history
What is the economic legacy of Northern Ireland’s Troubles?
The recent rioting in Northern Ireland (NI) contrasts with the 23rd anniversary of the signing of the Belfast (Good Friday) Agreement on 10 April. Looking at these events in juxtaposition provides a sharp reminder that while significant economic and social improvements have been made since 1998, much progress is still needed. For example, so-called ‘peace […]
News
Northern Ireland at 100
Newsletter from 30 April 2021 I was born in 1971, the year Northern Ireland turned 50. On 3 May, it will become a centenarian. For all of my childhood and the first decade of my adult life, Northern Ireland was a country marked by destructive terrorist violence. Bomb scares, army checkpoints, riots, sectarianism and brutal […]
Lessons from history
Ireland’s economy since independence: what lessons from the past 100 years?
A hundred years after achieving independence from the UK, Ireland is a prosperous and open European democracy. In terms of GDP per capita, Ireland is the richest country in the European Union (EU) with the exception of Luxembourg (Eurostat, 2021). But for many years, economists have recognised that using GDP per capita to assess living […]
Nations, regions & cities
What explains Northern Ireland’s long-standing problem of low productivity?
This year marks the centenary of Northern Ireland’s creation. During that time, its economy has persistently underperformed and it has remained one of the UK’s poorest regions. Central to this poor economic performance is low productivity. Northern Ireland produces less output per hour worked than most other regions in the UK. In turn, the UK […]
Lessons from history
What were the economic consequences of Irish independence?
This year marks the 100th anniversary of partition of the island of Ireland. On 3 May 1921, the 1920 Government of Ireland Act came into force, creating two devolved parliaments: one for the six counties of Northern Ireland; and one for the 26 southern counties that would become the Republic of Ireland. This division, and […]
Lessons from history
The Great Irish Famine: what are the lessons for policy-makers today?
With one million people dead and another million forced to emigrate, the Great Irish Famine of 1845-52 can be characterised as a ‘catastrophic risk’ – a low probability but high impact event (McLaughlin and Beck, 2020). When deaths are considered relative to the overall population, this famine overshadows practically all others in history: 12% of […]
News
Unequal effects
Newsletter from 23 April 2021 The lockdowns and social restrictions that have been necessary to control the spread of Covid-19 have affected some businesses and their staff far more than others. These unequal effects, felt throughout the pandemic, have been the central theme in several Economics Observatory articles this week. The stay-at-home economy? Whether or […]
Data stories
What’s been happening to employment of young people in the UK?
This week’s UK labour market data provide an update on increases in youth unemployment in 2020 across different parts of the country. Unlike data for the UK as a whole, youth unemployment data for the nations and regions are released on a rolling annual basis, rather than quarterly, in order to produce a more robust […]
Transport & infrastructure
How is Covid-19 affecting international travel and tourism?
Prior to Covid-19, travel and tourism accounted for 10% of global GDP and over 320 million jobs worldwide, making it one of the most important sectors of the world economy. The pandemic – the first on this scale in the era of globalisation – has put millions of jobs in the industry at risk (United […]
Business, big & small
How is Covid-19 affecting entrepreneurs and small firms in Northern Ireland?
The pandemic has had a negative impact on businesses of all sizes. But small firms and new firms have been particularly affected, as they are over-represented in those sectors that have faced most restrictions. These firms have typically faced a longer lockdown, which has had knock-on effects on their income and cash flows. Businesses have […]
Data stories
Data update: Labour market
This morning the Office for National Statistics (ONS) released the latest data on the UK labour market. How are employment, unemployment, wages and job vacancies responding to the pandemic? The charts below provide some answers. Figure 1 Source: Office for National Statistics The job market has been fairly stable in recent months, with the UK’s […]
Jobs, work, pay & benefits
What is the future of working from home?
Working from home has grabbed newspaper headlines since Covid-19 struck, with talk of a ‘revolution’ in working practices. This coverage can give the impression that the days of working in an office are behind us. But working experiences during the pandemic have not been universal. There is a risk that the drastic change to working […]
Public spending, taxes & debt
How should governments source public services during a crisis?
The decision of whether or not to outsource particular public services is complex. The optimal policy for delivering resources – defined as the choice of service delivery and contracting strategy – varies according to a number of factors, including service characteristics, situational considerations and a number of financial, ideological and efficiency-related objectives. The success or […]
News
Regaining balance
Newsletter from 16 April 2021 As of Monday, people in England were once again able to get a haircut, visit ‘non-essential’ shops and enjoy a pint or two at their local. While going to the pub required wrapping up warm against the chilly April air, the partial relaxation of Covid-19 restrictions will have come as […]
Recession & recovery
How has coronavirus affected social capital in the UK?
The strength of a country’s network of social relationships – what can be described as its stock of ‘social capital’ – has a significant influence on a broad range of socio-economic indicators, including measures of health, inequality, productivity and economic growth. Data for the UK as a whole and for Scotland indicate that, going into […]
Data stories
A year in the UK labour market: what’s happened over the coronavirus pandemic?
Recessions usually happen when people or firms stop demanding things. The Covid-19 recession is not very different in this regard, even if the cause of the demand fall – the restrictions on mobility imposed to try to stop the spread of the virus – was very unusual. Faced with a big economic shock like this, […]
Jobs, work, pay & benefits
How might Uber drivers’ new status as workers affect the gig economy?
On 19 February 2021, the UK’s Supreme Court ruled that Uber drivers must be treated as workers rather than as being self-employed. This was the latest move in what has been a five-year legal battle between the ride-hailing app and its workforce. Uber drivers were previously a part of the so-called ‘gig economy’, within which […]
Business, big & small
Should companies be allowed to buy back their own shares?
In the last three decades, stock repurchases have become a popular way of returning money to shareholders in the UK, the United States and continental Europe. Yet prior to 1981 in the UK and 1982 in the United States, it was illegal for companies to buy back their own shares. And during the Covid-19 crisis, […]
News
Economic evolution: fast and slow
Newsletter from 9 April 2021 Economics is often seen as stuck in its ways, a discipline that clings to old ideas – perfect markets, for example – and the old models that embed these unrealistic assumptions. But economics and economies change, in the past 18 months perhaps more than ever. This week a key theme […]
Prices & interest rates
How are economic models adapting to rising inequality and the pandemic?
The world is unequal both in its downs and its ups: the costs of recessions hit some harder than others, the benefits of economic growth lift some and leave others behind. Economy-wide events therefore affect inequality between the economy’s inhabitants. In turn, how the overall economy recovers after recessions and grows in the long-run depends […]
Nations, regions & cities
Update: What has been the impact of Covid-19 on Northern Ireland’s economy?
Unfortunately, very timely and reliable data on the overall state of Northern Ireland’s economy are limited. The likelihood is that it is broadly tracking UK-wide trends: a severe output decline during the first lockdown (23 March to late June 2020) reaching the bottom of the trough in April and early May, followed by a recovery […]
Jobs, work, pay & benefits
Ethnic minorities and the UK labour market: are things getting better?
Part of the report of the Commission on Race and Ethnic Disparities (known as the Sewell Report, 2021) is about how ethnic minorities fare in the UK labour market compared to white people and how disparities in pay, employment and unemployment have changed over time. The report gives the impression that disparities are falling over […]
Crime & policing
How are crime trends in England and Wales changing during the pandemic?
The Covid-19 pandemic has changed both the composition and level of crimes in England and Wales. With more people staying at home, and many becoming unemployed or having to shut their businesses, the incentives to commit crimes have changed. So too has the probability of being caught by the police, as empty streets have made […]
News
Jabs and jobs
Newsletter from 1 April 2021 The seed of an idea that grew into the Economics Observatory was first planted and nurtured in a series of conversations exactly a year ago. In the wake of the pandemic, lockdown and what already looked likely to be the deepest recession in living memory, there was a growing sense […]
Prices & interest rates
What will be the impact of changes in the US monetary policy framework?
The US Federal Reserve (known as ‘the Fed’) is in the process of changing the way it conducts monetary policy. Following an extensive public review of its policy framework, the Federal Open Market Committee (FOMC) released a revised Statement on Longer-run Goals and Monetary Policy Strategy in August 2020. This included two significant revisions that […]
Health, physical & mental
Who should be vaccinated first?
Since the first announcement that a vaccine effective against Covid-19 had been developed, it has offered hope as a way out of the pandemic. New vaccines have been approved since then, but still there are not currently enough vaccines to go round. When considering how to allocate limited numbers of doses, there are questions of […]
Jobs, work, pay & benefits
Update: How is coronavirus affecting the self-employed?
Becoming self-employed allows workers to enjoy the flexibility of being ‘their own boss’. But striking out on your own also means that you no longer have an employer to protect you from economic shocks when they come around. Covid-19 – by some measures the UK’s greatest economic shock for over a hundred years – has […]
News
Trading blows
Newsletter from 26 March 2021 This week’s headlines remind us just how connected the world is – and the importance of cooperation across countries to tackle global challenges. Even as UK coronavirus cases fall and vaccination numbers rise, a ‘third wave’ of the pandemic sweeping through Europe threatens the return of international travel. And despite […]
Trade & supply chains
How is the Brexit trade agreement affecting the Welsh economy?
New trading arrangements between the UK and the European Union (EU) are now in place as part of the trade and co-operation agreement signed in December 2020. They are already having a profound impact on the Welsh economy, with the effects being felt economy-wide as well as individually within key sectors. The EU is the […]
Data stories
Did sickness absence among UK workers rise or fall in 2020?
On 3 March 2021, the Office for National Statistics (ONS) released data on ‘Sickness absence in the UK labour market: 2020'. The report reveals whether sickness absence among UK workers has risen or fallen in 2020. It may have risen due to direct effects of the pandemic. Equally, it may have fallen if other illnesses […]
Trade & supply chains
How are Covid-19 and Brexit affecting the products that UK firms trade?
Firm-level decisions in response to shocks like coronavirus play a key role in determining the overall impact on the aggregate growth of trade and output. Firms choose what goods or services to export, how much to export and to which foreign markets they sell – and these decisions can have big overall effects. Firms’ reactions […]
Aid & international development
Are there differences in Africa’s responses to Ebola and Covid-19?
Fewer cases of Covid-19 have been reported in Africa compared with the United States and Europe (see Figure 1). It has been suggested that this is a result of the lessons learned from the fight against Ebola during the 2014-16 outbreak (predominantly in West Africa). For example, the two viruses have different causes and consequences, […]
News
A year in lockdown
Newsletter from 19 March 2021 Exactly one year ago, the Prime Minister announced that the UK could ‘turn the tide’ on the coronavirus crisis within 12 weeks. Those weeks have now turned to months – and while we may have grown strangely accustomed to life at home, few could have imagined that a year on […]
Aid & international development
How is Covid-19 affecting gender inequality in low-income countries?
Covid-19 has exacerbated the existing inequalities between men and women in terms of economic, health and educational outcomes. Examples of the disproportionately negative effects of the crisis on women are seen around the world (Alon et al, 2020; Adams-Prassl et al, 2020). But women in low and middle-income countries have faced specific additional challenges. For […]
Inequality & poverty
What are the implications of Covid-19 for wealth inequality?
Between the outbreak of the coronavirus pandemic in the UK in March 2020 and the end of the year, two of the richest people in the world both saw their net worth skyrocket. Jeff Bezos, founder of Amazon, became $72 billion richer between 18 March and 31 December 2020. The wealth of Elon Musk, who […]
Data stories
What do new UK trade data reveal about the impact of lockdown and Brexit?
The January 2021 trade data offer a first glimpse of how the Trade and Cooperation Agreement (TCA) governing economic relations between the UK and the European Union (EU) will affect UK trade. The headline numbers are startling. Compared with the previous January, UK goods exports to the EU in January 2021 fell by 38% from […]
Health, physical & mental
How have school closures affected children’s mental health?
Within the past year, most children in England missed up to 13 weeks of school in the first lockdown and another eight weeks in the most recent one. As the UK emerges from the latest mass school closure, evidence on the negative impact of the pandemic on the mental health of children and young people […]
News
Women and the pandemic
Newsletter from 12 March 2021 This week started with International Women’s Day, an opportunity to think about how we can forge a gender equal world. The Economics Observatory contributed to this conversation with a week of reflections on the damaging effect of the pandemic on gender equality in the UK – the impact on women […]
Families & households
Update: How is the response to coronavirus affecting gender equality?
Since the start of the pandemic, almost one year ago, many people’s jobs have been affected, either through redundancy, furlough or reduced hours. The sectors in which men or women are more likely to work have affected how hard individuals have been hit. For example, the service sector, in which women are more likely to […]
Prices & interest rates
Will scrapping the tampon tax help to reduce period poverty?
The start of January 2021 saw the abolition of the 5% ‘tampon tax’ in the UK – that is, the reduced rate of value-added tax (VAT) on many period products. Tampons, pads and alternatives, including the mooncup, are now tax-free, although other reusable products such as period pants remain taxed at 17.5%. The move was […]
