Businesses face a fresh tipping point of staff shortages and wage hikes
For years, inflation has not been an issue. Since the late 1990s, annual inflation in the UK has averaged 2 per cent, with a peak of just over 4 per cent. In the US, there was a similar story, with even less variability. This is in stark contrast to the 1970s and 1980s, when the […]
Unemployment has stabilised but there will be economic pain ahead
There are high levels of business optimism. Survey after survey has told us this, from reports from Deloitte on large companies to evidence from the Federation of Small Businesses. Consumer savings are at an all-time high. People are itching to get out and spend the money they have been forced to accumulate. All in all, […]
London Councils – Volterra produces unemployment forecasts for the London labour market
Volterra was recently commissioned by London Councils to undertake a detailed piece of research on unemployed London residents and their future employment prospects. Essentially, the research establishes the unemployment picture across London historically, before analysing the impact that the COVID-19 pandemic has had on unemployment in London. Several forecasting scenarios have also been laid out […]
Forecasting Unemployment in London
An early end to furlough could spell trouble for London residents. According to the UK Government’s latest announcement, the end is now in sight. With restrictions expected to be fully lifted by the 21st June, the economic recovery will be in full flow. Many people, including the Bank of England, are forecasting a short, sharp […]
A tip for Dominic Cummings: Don’t hire anyone who fails to grasp the power of incentives
The job advert issued by Dominic Cummings for people to work in government has attracted a wide range of comments. One particular focus has been on the sorts of skills he is looking for. Computer science, forecasting, artificial intelligence, causality theory — all these topics excite his interest. Cummings advocates a small selection of scientific […]
The balance between wages and capital is shifting – rent seekers had better beware
The first column of a new year is the time for a prediction. By far the hardest part of forecasting is to identify tipping points. The success rate of calling a break in an established trend is very low. Accompanied by suitable health warnings, 2018 looks like the year in which the longstanding relationship between […]
There’s a difference between priceless and worthless, but economics can’t measure it
The so-called “productivity puzzle” just does not go away. The October, employment figures released by the Office for National Statistics (ONS) brings it into focus. The number of people in work rose to a new record high of 32.1m, with an increase of around one per cent compared to a year ago. Total output, measured […]
Full employment in Britain has lowered productivity instead of increasing wages
The UK jobs market is booming, as the latest ONS figures show. Unemployment is at its lowest for over 40 years. A record 32.1 million people are in employment, a rise of over 3 million since the financial crisis. Apart from in a few scattered pockets, Britain is at full employment. Usually in such circumstances, […]
Beware the dysfunctional consequences of imposing misguided incentive systems
Following the disclosure of salaries at the BBC, it has hardly seemed possible to open a newspaper or switch on the television without being bombarded by stories about pay. By pure coincidence, an academic paper entitled “Pay for Performance and Beyond” has just appeared. So what, you might ask? Except that it is one of […]
Less austerity will always mean more tax
There is a great deal of discussion, following the election, of relaxing or even abandoning austerity. There is an equal amount of confusion about this, because the same word is being used to describe two quite separate concepts. The consequences of the government changing its policy on austerity are dramatically different, depending on which one […]
