Economics Observatory | Insights on the UK and global economy

Could tensions between Iran and Israel trigger a new wave of inflation?

The immediate inflationary impact of widening conflict in the Middle East is likely to be limited. But potential trade and supply chain disruptions, weakening business sentiment and elevated uncertainty could have major consequences for the global economy. Governments face tough budgetary choices.

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Nations, regions & cities

How productive is the West of England?

The West of England has a diverse economy, including rural areas, services-based jobs and advanced manufacturing hubs. Investment in infrastructure, skills and research and development (R&D) could help to boost the region’s productivity.

DATA HUB

New milestone in global energy transition

Renewables overtook coal as the world’s leading source of electricity in the first half of 2025, according to new data from Ember.

But coal – still a major driver of global warming – remained the largest single source of power in 2024, generating 10,538 TWh.

How quickly do you think coal’s role will decline? Or will it remain part of the mix for longer than expected?

Click here to read Patrycja Klusak and Matthew Agarwala on meeting climate promises while maintaining fiscal sustainability.

Public spending, taxes & debt

What future for residential property taxation in Britain?

Council tax is unpopular, unfair and overdue for reform. An alternative would be to fund statutory services through central government, introduce a modest local service charge, and absorb stamp duty and capital gains tax on housing into a single recurrent residential land and property ownership fee.

MAGAZINE

Read the latest edition of our magazine here

While the public finances in many countries are now under great pressure, this is no time to forget commitments to tackling climate change. Indeed, conditional on action being taken early, governments’ support for the transition to net zero could ultimately improve fiscal sustainability.

Energy & climate change

Frontline stories: protecting biodiversity

Ahead of COP26, the climate change summit in Glasgow in November 2021, Richard Davies talked to Dr Jane Goodall DBE, one of the world’s leading environmentalists, founder of the Jane Goodall Institute and a United Nations Messenger of Peace.

Energy & climate change

‘Backyard wildlife’: has the pandemic reconnected us with nature?

As lockdowns have changed the ways in which people spend their time and money, many have made a priority of engaging with the local natural environment. This has led to investments in nature, increases in wildlife populations – especially birds – and improvements in wellbeing.

Public spending, taxes & debt

How much revenue might be raised by a one-off wealth tax?

If the government decides to raise taxes after the pandemic, an alternative to taxes on work or spending could be a one-off wealth tax. A well-designed tax of this kind could raise significant revenue in a fair and efficient way without excessive administrative costs.

Transport & infrastructure

Visitor caps: what potential impact on the world tourism industry?

Caps on the numbers of visitors allowed at certain destinations aim to relieve pressure on hotspots of overtourism. Their introduction presents an opportunity for other places to attract more tourists and students, boost their economies and promote a more sustainable and equitable tourism industry.

Families & households

What are the effects of youth club closures in the UK?

The widespread closing of youth clubs during the 2010s, driven by government austerity measures, led to falling educational performance and increasing rates of youth offending. The long-term financial implications – through reduced lifetime earnings and higher crime-related costs – are also stark.

Public spending, taxes & debt

Might the UK really need a 1970s-style IMF bailout?

Given the precarious state of the UK’s public finances, there has been speculation about whether a loan from the International Monetary Fund will be needed, as happened in 1976. What’s really required is a reformulation of the fiscal framework to establish a credible commitment for fiscal policy.

Business, big & small

Fast fashion: what are the true costs?

The cost of living crisis has led to an explosion in the fast fashion industry. Buying cheap, low-quality clothes allows people to update their wardrobes regularly at a modest cost. But this comes at the expense of both the environment and the wellbeing of garment workers in developing countries.

Energy & climate change

How does fast fashion affect the environment?

The fast fashion industry is characterised by both overproduction and overconsumption. The sector is harmful to the environment, requiring enormous quantities of natural resources and creating substantial waste. Policy-makers could promote a more circular economy to reduce the damage.

News

Reap what you sow

Farming doesn’t just feed us: it powers economies, employing millions of people and shaping how we all live. But key challenges – including climate change and increasing barriers to cross-border trade – raise questions about how to provide a sustainable food supply for a growing world population.

Productivity & growth

Boosting agricultural productivity: what lessons from policies in Uganda?

Uganda’s smallholder farmers continue to struggle with low crop yields. The government has tried public subsidies for key inputs in order to boost productivity. But the success of these policies relies on programme design and implementation, as well as the availability of complementary services.

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