Macroeconomics: UK economy, IB Economics

Richard Partington with his take on 14 years of Conservative government. Unsurprisingly, it's not terribly complimentary. 

Faisal Islam has written about the implications of curbing migration for the UK economy and concludes, rather as Zhou En-lai did about the French Revolution, that it's "too early to tell".

However, despite the government wanting to limit migration two things strike me: an explicit acceptance of the fact that certain sectors of the economy are dependent upon foreign workers; the lack of any sense that British workers can be trained to fill the gaps in the labour force that do exist.

And this, I think is where there's a major sticking point. 

The Observer carried an article looking at whether Brexit is working? Remarkably, there's a relative lack of sneering: in general, it seems that the economic effects of Brexit have been negative - who would have guessed? - but that there's been increasingly open migration. I'll bet the Leavers didn't think they were voting for that.

Potential supply-side issues ahead: the latest research, not least by the Office for Budgetary Responsibility, has revised down the size of the UK population, and this could potentially have a significant effect on Britain's supply-side.

This is of a particular concern for a variety of sectors - notably hospitality, social care, construction and manufacturing. If we are going to experience a skills shortage, this will only impede growth and our recovery is going to be all the slower. 

A really interesting article about net migration. We've still got net immigration but the composition of it has changed: the number of EU migrants has fallen to the lowest level in 10 years, but the number of non-EU migrants is at its highest for 15 years. Either way the size of the working population is rising, and this is good for potential growth.

But it also poses a bit of a conundrum. Did the people who voted for Brexit want to see this? There's been no reduction in net inward migration and non-EU migration has risen. I'm not convinced that they did - then again, this sort of migration is not a story that plays well as headline news. 

"Will the last one out, please turn off the light..."

It seems that many companies have made plans to leave the UK in the event of a no-deal Brexit, according to the British Chambers of Commerce. 

Wot larks, Pip!

The announcement of visa restrictions, and the prospect of lower inward migration isn't universally popular, and here the hospitality and health sectors voice their concerns. They argue that they are already experiencing labour shortages, and that these measure will only make things worse. 

And as for the notion of nominative determinism? I'm afraid I don't see it applies to the current Home Secretary. 

An interesting clash of views, with the Prime Minister arguing that legal migration is too high, and the former Chief Economist of the Bank of England, Andy Haldane, saying it should be "more lenient".

You might characterise the dispute as Politics versus Economics, and it illustrates the nature of policymaking. However, think about what more migration would mean in terms of the nation's labour markets, and productive capacity more generally, and you might think that there's certainly an economic case for it. 

Polly Toynbee on Brexit five years on. She's not a fan. 

This article is an interesting read: the headline suggests that the 2016 Brexit vote has spurred the migration of skilled UK workers to the EU.

However, when looked at more closely, it seems to be the case that this is only true in the case of a movement of people from the UK to Germany, and you might ask whether or not you can extrapolate from this to conclude that it is true for the EU as a whole. 

An influential manufacturing group, Make UK, has criticised the government's proposals to control migration post-Brexit. They argue that the notion of a £30,000 minimum salary threshold is nonsensical and will restrict the ability of British firms to recruit essential workers and have detrimental effects for both actual and potential growth. 

Interesting migration story yesterday, with the news that net migration has increased, although the balance between EU and non-EU migrants has shifted in favour of the latter.

Apart from the consequences for UK labour supply, it's amusing to think that those who voted Leave in the referendum have once again been duped. Apparently, this is what 'taking back control' looks like.

From my perspective, the economic consequences of this rise in migration are largely positive.