Macroeconomics: UK economy, IB Economics
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Macroeconomics: UK economy, IB Economics
Economy
A brief overview of relevant articles for IB and A-Level all relating to the UK economy
Curated by Graham Watson
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Pay rebound for workers hit by the pandemic

Pay rebound for workers hit by the pandemic | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - October 27, 2021 4:10 AM
Young employees saw the biggest dip and rebound in wages but the gender pay gap has widened.
Graham Watson's insight:

It seems as though labour markets have rebounded as far as pay is concerned, with workers seeing their pay packets increase since the pandemic. 

 

However, the gender pay gap has widened, and it will be interesting to see what the "end of the public sector pay freeze" actually means. If the public sector are to get below inflation pay increases, it will seem as though the pay freeze has been extended. 

more...
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Rishi Sunak: I have to make tough choices on public pay

Rishi Sunak: I have to make tough choices on public pay | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - November 26, 2020 10:07 AM
The chancellor said that he could not justify a wage rise for all public sector workers.
Graham Watson's insight:

Rishi doesn't like being unpopular, but this isn't stopping him from making tough decisions regarding public sector pay. There's some interesting analysis of this issue elsewhere - but it's a difficult sell when the defence budget has been increased. I'd wager even the Defence Minister has been surprised. 

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Spending Review: Key points from Rishi Sunak's statement

Spending Review: Key points from Rishi Sunak's statement | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - November 25, 2020 10:35 AM
Chancellor Rishi Sunak has set out what the government will spend next year. Here are the headlines.
Graham Watson's insight:

Spending Review at a glance...

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Rishi Sunak faces state pension conundrum

Rishi Sunak faces state pension conundrum | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - November 27, 2020 3:24 AM
Official forecasts suggest the state pension will rise by 4.1% in April 2022 when unemployment is high.
Graham Watson's insight:

This is the sort of dilemma that will, I suspect, really vex the Chancellor. Under the current pensions triple lock, UK pensioners can expect a 2.5% increase in their state pension this year - because this is the lowest it can be - given that the figure is determined by the highest value from CPI, average wage increases or 2.5%.

 

However, next year, the Office for Budgetary Responsibility (OBR) predict that faster wage growth may see pensions go up by 4.1%. Wow! At a time when the government has frozen public sector pay, pensioners seem to be reaping remarkable rewards. 

 

I'm not sure that this is sustainable. 

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Sunak's spending spree: How will the UK pay for Covid 'economic emergency' | Analysis

From www.youtube.com - November 25, 2020 1:57 PM

The "economic emergency" caused by coronavirus has only just begun and there will be "lasting damage" to the UK, chancellor Rishi Sunak warned as he set out his Spending Review this afternoon.

The Telegraph's economics editor Russell Lynch looks at which avenues Rishi Sunak could take in order to repay the money that's being spent on the economic recovery.

Graham Watson's insight:

How does the Chancellor plug the largest fall in output for 300 years; the Telegraph looks at how the government is currently relying on borrowing to fill the gap.

 

The hard decisions come later - perhaps involving tax rises and spending cuts - so-called austerity. Possible tax rises involve the introduction of pension taxes, or rises in corporation tax or capital gains tax. Alternatively, he might abolish the triple lock on pensions - and not before time, given that public sector workers are expected to endure a pay freeze. 

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Rishi Sunak says Spending Review will not spell austerity

Rishi Sunak says Spending Review will not spell austerity | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - November 23, 2020 2:40 AM
The chancellor says he will uphold pre-Covid funding pledges on police, nurses and schools.
Graham Watson's insight:

Wednesday sees the Spending Review - expect lots of coverage of this, and few concrete policy measures until then. The big talking point is currently the possibility of a public sector pay freeze, but the Chancellor assures us that it won't usher in another era of austerity.  

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