Spring Statement 2018

Today’s Spring Statement was expressly not a ‘budget’; it contained no new spending or tax policy announcements. Instead, it was an opportunity for the Chancellor to update parliament on the latest UK economic and fiscal forecasts.

It is only three and a half months since the Autumn Statement in November. The big statements then were about the major downward revisions to the forecasts for UK economic growth.

Today there was a smidgeon of relatively better news on the economy. GDP growth in 2017 turned out to be slightly higher than the OBR had expected, and it has also revised up its forecasts for 2018. But these upward revisions in the early years of the forecast are mirrored by slight declines in later years (the OBR has effectively reassessed its view of where we are in the ‘economic cycle’).

Moreover, the upward revisions are nowhere near sufficient to offset the downward adjustments in November (see Chart). UK growth of 1.5% in 2018 is still forecast to lag EU and US growth (forecast at 2.3 and 2.9% respectively by the OECD). Continue reading “Spring Statement 2018”

How do consumer prices differ across the UK?

Last week the ONS released new data on differences in consumer prices across the UK.

While we get regular (monthly) updates on changes in consumer prices for the UK as a whole, there has long been an understanding that these UK average prices are likely to differ to at least some extent across parts of the UK (as anyone who has ever bought a pint of beer in London can attest!).

In this short blog, we will take a look at these data and see what they show about price differences across the UK. Differences in the price level across the UK (which is what these data show) is different from changes in the price level (which we do not have data on, except for the UK as a whole).

For a variety of reasons, not least arguments about differences in the purchasing power of households and household poverty more generally, differences in the price level can have big implications for our understanding of relative prosperity of households across regions.

Continue reading “How do consumer prices differ across the UK?”

March economy nowcasts!

Grant Allan & Stuart McIntyre
Fraser of Allander Institute, University of Strathclyde

With official estimates of economic growth in Scotland due out next month, we have produced updated estimates of economic growth in Scotland using our nowcasting model for Q4 2017 and Q1 2018.

These estimate that:

  • GVA growth in 2017 Q4 is 0.36% which, at an annual rate, is 1.47%
  • GVA growth in 2018 Q1 is 0.34% which, at an annual rate, is 1.38%

Relative to our estimates from last month, these suggest a slight improvement in our estimate for Q4 (up from 1.25%), and very little change in our estimate for Q1 2018 (which was 1.4%).

Continue reading “March economy nowcasts!”

The economic impact of bad weather on the Scottish economy

In recent days, you’ll have no doubt seen various headlines predicting hundreds of millions of pounds being wiped off our economy as a result of the bad weather.  Other estimates predict that UK growth could fall to 0.2% this quarter, down from trend growth of 0.4%.

But how accurate can these estimates expect to be? And what might it mean for this quarter’s growth figures?

Continue reading “The economic impact of bad weather on the Scottish economy”