{"id":9597,"date":"2020-12-18T09:52:00","date_gmt":"2020-12-18T09:52:00","guid":{"rendered":"http:\/\/www.economicsobservatory.com\/?post_type=question&#038;p=9597"},"modified":"2021-02-26T15:20:37","modified_gmt":"2021-02-26T15:20:37","slug":"news-a-local-crisis-everywhere","status":"publish","type":"question","link":"https:\/\/www.economicsobservatory.com\/test\/news-local-crisis-everywhere","title":{"rendered":"A local crisis, everywhere"},"content":{"rendered":"\n<p><strong>Newsletter from 18 December 2020<\/strong><\/p>\n\n\n\n<p>We need a new language for national crises. Take the crash of 2008. Then, the problem was pretty much the same across the country (and in other advanced economies) \u2013 banks had too little capital. The solution was also similar (bailouts, public ownership) and those hit by the crisis faced comparable difficulties: credit was tight for small businesses in Dagenham and Dundee alike.<\/p>\n\n\n\n<p>Covid-19 also spans the nation, but it is no longer \u2018national\u2019 in the same way. Case rates, rules and regulations vary hugely by region. The toll, in terms of economic hardship, varies too. Perhaps it is better to think of this as a local crisis, but everywhere. As we head towards Christmas one thing is clear: London and the South East are in the firing line (Figure 1).<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Figure 1: New Covid-19 cases (7-day average)<\/h4>\n\n\n<section class=\"blocks__chart\">\n    <div id=\"chatEmbed170252\" class=\"blocks__chart-svg\"><\/div>\n\n    <script>\n        var spec = {\"$schema\":\"https:\\\/\\\/vega.github.io\\\/schema\\\/vega-lite\\\/v4.json\",\"description\":\"Coronavirus cases\",\"data\":{\"url\":\"https:\\\/\\\/api.coronavirus.data.gov.uk\\\/v2\\\/data?areaType=region&metric=newCasesBySpecimenDate&format=csv\",\"format\":{\"type\":\"csv\"}},\"height\":133.3,\"width\":200,\"mark\":{\"type\":\"bar\"},\"encoding\":{\"x\":{\"field\":\"date\",\"type\":\"temporal\",\"title\":\"Date\"},\"y\":{\"field\":\"newCasesBySpecimenDate\",\"type\":\"quantitative\",\"title\":\"New cases\"},\"facet\":{\"field\":\"areaName\",\"type\":\"nominal\",\"columns\":3,\"title\":\"Region\"},\"tooltip\":[{\"field\":\"date\",\"type\":\"temporal\",\"title\":\"Date\"},{\"field\":\"rolling_mean\",\"type\":\"quantitative\",\"title\":\"Cases, 7-day average\",\"format\":\",.0f\"},{\"field\":\"newCasesBySpecimenDate\",\"type\":\"quantitative\",\"title\":\"Cases\",\"format\":\",.0f\"}],\"color\":{\"field\":\"areaName\",\"type\":\"nominal\",\"legend\":0,\"scale\":{\"domain\":[\"East Midlands\",\"East of England\",\"London\",\"North East\",\"North West\",\"South East\",\"South West\",\"West Midlands\",\"Yorkshire and The Humber\"],\"range\":[\"orange\",\"red\",\"red\",\"orange\",\"orange\",\"red\",\"orange\",\"orange\",\"orange\"]}}}};\n        var view = new vega.View(vega.parse(spec), {\n            responsive: true,\n            renderer: \"canvas\", \/\/ renderer (canvas or svg)\n            container: \"#chatEmbed170252\", \/\/ parent DOM container\n            hover: true \/\/ enable hover processing\n        });\n        view.run();\n\n        vegaEmbed('#chatEmbed170252', spec);\n    <\/script>\n<\/section>\n\n\n<h5 class=\"wp-block-heading\">Source:\u00a0<a href=\"https:\/\/coronavirus.data.gov.uk\/details\/download\" target=\"_blank\" rel=\"noreferrer noopener\">UK Gov<\/a>, code to embed\u00a0<a href=\"https:\/\/github.com\/RDeconomist\/RDeconomist.github.io\/blob\/main\/ECO-example.html\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a>.<\/h5>\n\n\n\n<p><\/p>\n\n\n\n<p>In light of this, Observatory users \u2013 those using our\u00a0<a href=\"https:\/\/www.coronavirusandtheeconomy.com\/ask-your-question\" target=\"_blank\" rel=\"noreferrer noopener\">\u2018ask a question\u2019 function<\/a>, our writers and our readers \u2013 want to take a closer look at this national crisis. Of course, people ask about economy-wide matters like\u00a0<a href=\"https:\/\/www.coronavirusandtheeconomy.com\/question\/after-coronavirus-deflation-or-inflation\" target=\"_blank\" rel=\"noreferrer noopener\">inflation<\/a>. But many queries are more focused: hence our recent pieces on\u00a0<a href=\"https:\/\/www.coronavirusandtheeconomy.com\/question\/will-coronavirus-cause-big-city-exodus\" target=\"_blank\" rel=\"noreferrer noopener\">cities<\/a>,\u00a0<a href=\"https:\/\/www.coronavirusandtheeconomy.com\/question\/how-uneven-recovery-consumer-spending-across-uk-regions\" target=\"_blank\" rel=\"noreferrer noopener\">regions<\/a>\u00a0and\u00a0<a href=\"https:\/\/www.coronavirusandtheeconomy.com\/question\/which-firms-and-industries-have-been-most-affected-covid-19\" target=\"_blank\" rel=\"noreferrer noopener\">hard-hit industries<\/a>. An emerging theme is how sub-national policy \u2013 whether regional or sectoral \u2013 is working. City mayors \u2013 often with relatively new devolved powers \u2013 are facing their biggest trial.<\/p>\n\n\n\n<p>A couple of months back, the charts above looked terrible for the North West, with Greater Manchester a particular concern. An Observatory piece on\u00a0<a href=\"https:\/\/www.coronavirusandtheeconomy.com\/question\/why-has-manchester-been-hit-so-hard-second-wave-coronavirus\" target=\"_blank\" rel=\"noreferrer noopener\">economics and policy in Manchester<\/a>\u00a0published this week, digs into the detail of the city-region\u2019s experience. This is not just a piece about a great industrial city, but reflects the regional theme that could drive policy debates in 2021.<\/p>\n\n\n\n<p>The analysis, by\u00a0<a href=\"https:\/\/www.metrodynamics.co.uk\/mike-emmerich\" target=\"_blank\" rel=\"noreferrer noopener\">Mike Emmerich<\/a>,\u00a0<a href=\"https:\/\/www.metrodynamics.co.uk\/daniel-timms\" target=\"_blank\" rel=\"noreferrer noopener\">Daniel Timms<\/a>\u00a0and\u00a0<a href=\"https:\/\/www.metrodynamics.co.uk\/danielle-jackson\" target=\"_blank\" rel=\"noreferrer noopener\">Danielle Jackson<\/a>\u00a0starts with some troubling numbers. The fatality rate has been almost double that predicted by population numbers. And workers have suffered: the share of potential workforce claiming benefits has more than doubled, and at 8.9% is well above the nation-wide ratio of 6.3%.<br>On its own this is troubling. It also leads the writers to a puzzle: Manchester \u2013 hub of the Northern Powerhouse \u2013 was supposed to be a shining light, an example of how devolution can improve outcomes. Only Manchester and London have mayors with powers to shape public services (for Manchester, health; for London, health and crime). Why did a city with locally-led services suffer so badly?<\/p>\n\n\n\n<p>Economically speaking, a previous strength for Manchester \u2013 that it has lots of commuters \u2013 has turned into a weakness. The authors point to evidence showing that large cities suffer when footfall drops. And compared with its peers \u2013 Liverpool, say \u2013 Manchester is especially exposed (see Figure 2). With so many people working from home, local businesses suffer.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Figure 2: Ten largest travel to work areas in England and Wales by population<\/h4>\n\n\n\n<figure class=\"wp-block-image size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"941\" height=\"499\" src=\"http:\/\/www.economicsobservatory.com\/wp-content\/uploads\/2021\/01\/NL-F2.png\" alt=\"\" class=\"wp-image-9598\" srcset=\"https:\/\/www.economicsobservatory.com\/test\/wp-content\/uploads\/2021\/01\/NL-F2.png 941w, https:\/\/www.economicsobservatory.com\/test\/wp-content\/uploads\/2021\/01\/NL-F2-300x159.png 300w, https:\/\/www.economicsobservatory.com\/test\/wp-content\/uploads\/2021\/01\/NL-F2-768x407.png 768w\" sizes=\"(max-width: 941px) 100vw, 941px\" \/><\/figure>\n\n\n\n<h5 class=\"wp-block-heading\">Source: ONS Population estimates by small area<\/h5>\n\n\n\n<p>An even bigger question relates to poor health outcomes. Part of the answer, the authors explain, is that the \u00a36 billion health and social care budget comes with lots of claims and players. In addition, the city did not \u2013 unlike the devolved nations \u2013 have the power to mandate its own \u2018tier\u2019 restrictions. Close up, regional devolution looks like a messy halfway house: a lack of full responsibility or control.<\/p>\n\n\n\n<p>Another piece this week with a distinctly regional flavour looks at consumer spending, which has\u00a0<a href=\"https:\/\/www.coronavirusandtheeconomy.com\/question\/how-uneven-recovery-consumer-spending-across-uk-regions\" target=\"_blank\" rel=\"noreferrer noopener\">recovered unevenly across UK regions<\/a>. The team (<a href=\"https:\/\/www.benedictgk.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">Benedict Guttman-Kenney<\/a>,\u00a0<a href=\"https:\/\/www.sbs.ox.ac.uk\/about-us\/people\/edika-quispe-torreblanca\" target=\"_blank\" rel=\"noreferrer noopener\">Edika Quispe-Torreblanca<\/a>,\u00a0<a href=\"https:\/\/www.wbs.ac.uk\/about\/person\/GUNZINGER\" target=\"_blank\" rel=\"noreferrer noopener\">Fabian Gunzinger<\/a>,\u00a0<a href=\"https:\/\/www.nottingham.ac.uk\/economics\/people\/john.gathergood\" target=\"_blank\" rel=\"noreferrer noopener\">John Gathergood<\/a>\u00a0and\u00a0<a href=\"https:\/\/www.wbs.ac.uk\/about\/person\/neil-stewart\" target=\"_blank\" rel=\"noreferrer noopener\">Neil Stewart<\/a>) describe a big data problem \u2013 the lag in government statistics. To get over this they use cutting edge data obtained from individual credit cards. This means that their numbers are available at a local level, and with a delay of just one day. The national level has been astonishing: the data show economy-wide spending fell by 29% in the year to April 2020, but was up 12% year-on-year by October.<\/p>\n\n\n\n<p>Again, up close, things look different. The spending recovery was fast in the South and around London, slower in the Midlands and Wales, and non-existent in the North East and Scotland (see Figure 3).<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Figure 3: October 2020 year-on-year growth in overall credit card spending by NUTS 2 area<\/h4>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"608\" height=\"822\" src=\"http:\/\/www.economicsobservatory.com\/wp-content\/uploads\/2021\/01\/NL-F3.png\" alt=\"\" class=\"wp-image-9599\" srcset=\"https:\/\/www.economicsobservatory.com\/test\/wp-content\/uploads\/2021\/01\/NL-F3.png 608w, https:\/\/www.economicsobservatory.com\/test\/wp-content\/uploads\/2021\/01\/NL-F3-222x300.png 222w\" sizes=\"(max-width: 608px) 100vw, 608px\" \/><\/figure>\n\n\n\n<p>With London and the South East set to face stronger tier 3 restrictions, one worry is that the recovery there will be snuffed out. In fact, the authors offer some hope. Their data allow them to filter between spending online and in person. Londoners seem to be doing most of their spending with the click of a mouse, suggesting that the consumer rebound can continue even if restrictions get tighter.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Economics Observatory \u2013 news and numbers<\/h3>\n\n\n\n<p>As a sign off to 2020 on behalf of the core team here at ECO, I would like to thank everyone involved in the Observatory project so far. It has been an extraordinary effort. Since launching the website at the start of June, we have published 210 articles and nearly a dozen short films, with over 370,000 page views and 70,000 users reading our work.<\/p>\n\n\n\n<p>In 2021 we will be back with a revamped website, interactive charts, new videos and, with any luck, some in-person public events around the country. We will still be publishing articles next week, including a holiday reading list from\u00a0<a href=\"https:\/\/www.bennettinstitute.cam.ac.uk\/about-us\/team\/diane-coyle\/\" target=\"_blank\" rel=\"noreferrer noopener\">Diane Coyle<\/a>, so keep an eye on the website for new content.<\/p>\n\n\n\n<p>Have a great break and best wishes for 2021.<\/p>\n\n\n\n<h5 class=\"wp-block-heading\">Richard Davies<\/h5>\n\n\n\n<p>Published on: 18th Dec 2020<\/p>\n\n\n\n<p>Last updated on: 22nd Dec 2020<\/p>\n","protected":false},"featured_media":9598,"template":"","categories":[235,492,222],"tags":[489],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>A local crisis, everywhere - Economics Observatory<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.economicsobservatory.com\/test\/news-local-crisis-everywhere\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A local crisis, everywhere - Economics Observatory\" \/>\n<meta property=\"og:description\" content=\"Newsletter from 18 December 2020 We need a new language for national crises. 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