Economics Observatory | Questions and answers about coronavirus and the UK economy

Ahead of the autumn 2024 budget, what’s the state of the UK economy?

The UK economy faces numerous problems, including low productivity, high public debt and wide regional disparities. The new government’s first budget is an opportunity not only to respond to immediate pressures, but also to present a blueprint for a more balanced, inclusive and resilient economy.

1-3 October 2024 Bristol

Schools, universities & training

UK higher education finance: what’s the problem and what can be done?

The tripling of tuition fees in 2012 put universities in a strong financial position. But since then, fees – and the maintenance loans that support students – haven’t kept up with inflation. Now, students face real hardship and some universities seem to be in deep financial difficulties.

DATA HUB

UK debt and deficit

Over the past four years, the ratio of public debt to GDP has remained close to 100%, the highest since the 1960s, and it has become increasingly unsustainable. The Office for Budget Responsibility (OBR) has issued a stark warning: unless policy reforms are made, the national debt could triple over the next 50 years. This expected increase is due to a combination of factors, including pressures from the ageing population, the climate crisis and rising geopolitical tensions. Each of these will put pressure on the public purse.

These factors suggest that the UK is likely to continue to experience fiscal deficits averaging around 6% of GDP. Managing this fiscal imbalance will require the government to implement policies that not only stabilise debt levels but also foster longer-term economic growth.

Energy & climate change

How are plastics harming marine ecosystems?

The oceans have become a waste-sink for plastics—just like the atmosphere is for greenhouse gas emissions. A higher carbon price may help tackle both problems.

MAGAZINE

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Over the last two decades, the proportion of national income going to employees and the self-employed – the labour share – has declined in many advanced economies. This has not happened in the UK, which might seem like good news for workers, but it conceals slow wage growth and rising inequality.

Trade & supply chains

How might a wider Middle East conflict affect the global economy?

The world economy is underperforming as a result of tight monetary policies, weaker global trade, a slowing Chinese economy and uncertainty around the US election. An escalation of conflict in the Middle East could increase uncertainties, harming inflation reduction efforts and hurting growth.

Attitudes, media & governance

What are the economic impacts of institutions and technology?

Institutions that have been in place for centuries and cutting-edge new technologies both have big effects on society. Daron Acemoglu, co-recipient of the 2024 Nobel Prize in Economic Sciences, talks to Graeme Roy about how we can harness institutions and technologies for the common good.

Public spending, taxes & debt

Fiscal rules: what value if they change whenever politically convenient?

The UK has had seven different sets of fiscal rules since 2010, suggesting that they are simply not fit for purpose. Sound fiscal policy urgently needs the Chancellor to accept accountability and transparency, including an annual ‘state of the economy’ address outlining progress – and failure.

Attitudes, media & governance

#economicsfest: How can the UK’s new government kickstart the economy?

Restoring economic growth after a long period of stagnation is a key part of the solution for the UK’s many social challenges, including struggling schools, poor health and rising child poverty. The government’s coming choices on taxes, public spending and investment will be crucial.

Lessons from history

#economicsfest: How can lessons from the past help to improve our economy?

The UK faces major economic, social and environmental challenges, which include fixing ailing productivity, boosting social mobility and meeting climate targets. Each will require learning lessons from the country’s past and implementing clear and focused policy.

Jobs, work, pay & benefits

Is work in the UK becoming more insecure?

The increase in zero-hour contracts and the emergence of the gig economy over the past decade have raised concerns that working life is becoming less secure. Evidence suggests that while the share of workers experiencing insecure work has not gone up, some groups are more at risk.

Public spending, taxes & debt

What’s the economic inheritance of the new UK government?

The Labour government will present its first budget in late October. The new chancellor has inherited an economy with at least four big problems: low productivity growth; stagnant living standards; persistent regional inequality; and a fiscal framework that is stifling much-needed public investment.

Health, physical & mental

How can we reduce obesity and improve diets?

Rising rates of obesity and other diet-related diseases are costly to people’s health and the NHS. Recommendations from the National Food Strategy set out a path to healthier – and less environmentally damaging – choices.

Business, big & small

Which policies can best support private sector growth in the UK?

Successive UK governments have struggled to promote economic growth in the aftermath of the global financial crisis of 2007-09. In an interview conducted in late 2023, former business secretary Vince Cable talks to John Turner about some of the persistent challenges for policy-makers.

Science, technology & innovation

How can public investment in research improve UK economic performance?

Public investment in scientific endeavour is essential for the success of UK business and industry – and, more broadly, for a productive economy, a healthy society and a sustainable world. A report written early in the 2010s laid out the evidence on the central role of research for our future.

All Answers