Labour productivity stagnated in the UK in the period between the financial crisis and the emergence of Covid-19. Labour supply and employment grew strongly over the same period, driven primarily by net inward migration. While labour productivity should be independent of labour supply in the long run, this need not be the case in the medium run while capital per worker adjusts. Exploiting a range of evidence, we conclude that around 4 pp of the estimated 20% shortfall in productivity from its previous trend that had emerged by 2019 might be explained by increased labour supply, with a slowdown in TFP growth accounting for most of the shortfall.

Changing attitudes to government debt influenced a recent High Court judgement on the National Fund, a British charity set up in 1928 with donations left to accumulate until they grew sufficient to repay in full the National Debt of the United Kingdom. Based on a belief that the Fund would never become large enough, the Attorney General in 2018 applied under cy-près jurisdiction to allow the charity to repay only part of the National Debt. The argument was that changing attitudes to debt have rendered the charity’s aim impracticable, even though it was at the time it was set up.

Since early 2021, food prices in Britain have increased by 30%. Using monthly microdata, researchers have found that frictions in the UK’s new trade relationship with the European Union (EU) play an important part in this inflation. The trade relationship is evolving, with further changes expected in 2024. This article establishes a framework for identifying trade-related inflation in close to real time. Using programming techniques, we collect daily prices of over 100,000 supermarket items, covering 80% of the UK grocery market. We identify 1,200 products from 12 countries with a protected designation of origin (PDO). This allows us to link price changes to individual EU economies. Addressing the predominance of EU PDOs, we employ a large language model to discern product origins from additional web-scraped data, thus broadening our analysis to cover over 67,000 products. Since August 2023, we find that prices for EU-originating food products have increased at a rate of 50% higher than domestically sourced products. This study presents a unique methodological approach to dissecting food sector inflation, which is well-positioned to be used in a policy setting, allowing us to assess the possible impact of impending nontariff barriers at the GB-EU border in 2024.

To be effective, central bankers must project expertise and an anti-inflation commitment. However, those attributes are usually male-coded, which may undermine female central bankers. We assess gender bias using a survey experiment fielded in Japan in September 2022, when, for the first time in decades, the Bank of Japan appeared to struggle with inflation. We exposed individuals to simplified Bank of Japan communication and randomly assigned attribution to male (Mr. Adachi) or female (Ms. Nakagawa) Policy Board members. Respondents trusted the Bank of Japan less and were more sceptical of its capacity to handle inflation when Ms. Nakagawa represented it.

This paper reviews two important design choices for Central Bank Digital Currencies (CBDCs). First, how CBDC intermediaries should be compensated for their services. Second, how payments from traditional banks into CBDC wallets should be cleared. Both of these design choices have important implications for the financial stability of the banking system.

This article analyses the correlates of public confidence in the Bank of England (BoE) both at the aggregate and individual levels to answer the following two questions: What are the correlates of trust in the BoE? Is the inflation surge associated with a structural shift in attitudes towards the BoE? Data from the BoE’s Inflation Attitudes survey (2001–2023) suggest that although inflation performance and public trust seem associated at the aggregate level, at the individual level this correlation is weaker. Further analyses suggest some changes in the correlates of public confidence since the inflation surge.

In this article, we use a three-country macroeconomic model of trade, in which we allow for the presence of labour market frictions and heterogeneous firms, to analyse the effects of Brexit on UK productivity. We find that, under the Trade and Cooperation Agreement, UK GDP would have been expected to fall by approximately 7.5% in 2021, that is, as soon as the United Kingdom exited the European Union. Our model suggests that UK GDP would then recover, rising back to a long-run level around 4% below where it would have been had Brexit not happened. This fall in GDP is driven by the negative productivity effects of the implied increase in the costs of trading between the United Kingdom and European Union. Specifically, the increase in trading costs will lead to fewer, higher-productivity, UK firms exporting and reduced competition from EU firms in the UK domestic market allows more ‘low productivity’ firms to remain in the market.

We study the effects of professionals’ survey-based inflation expectations on inflation for a large number of 36 economies, using dynamic cross-country panel estimation of New-Keynesian Phillips curves. We find that inflation expectations have a significantly positive effect on inflation. We also find that the effect of inflation expectations on inflation is significantly larger when inflation is higher. This suggests that second-round effects via the effects of higher inflation expectations on inflation are more relevant in a high-inflation environment.

The United Kingdom has experienced significantly lower growth rates of business investment and labour productivity following its decision to leave the European Union, although this lacklustre performance was affected by the economic shocks caused by the COVID-19 pandemic and the Russian invasion of Ukraine in addition to Brexit. This article aims to quantify the impact of Brexit on business investment and labour productivity in the United Kingdom using the National Institute of Economic and Social Research’s Global Macroeconometric Model. We model Brexit as a decline in trade with the European Union and associated reduction in terms of trade, a decrease in productivity and a permanent increase in uncertainty. Our estimates suggest that these shocks have led to an approximately 12–13% decline in UK business investment in 2023, which gradually declines to 7–8% by 2035 as businesses adjust to the terms of trade and productivity shocks. This corresponds to a real gross domestic product (GDP) loss of 2–3% (about £850 per capita) in 2023 and 5–6% (about £2,300 per capita) by 2035. Additionally, we find that Brexit has reduced labour productivity by around 2–2.5% as of 2023, with a projected reduction of 5–6% by 2035.

The end of free movement and the introduction of the post-Brexit migration system represent the most important changes to the UK migration system in half a century. Coinciding with the aftereffects of the pandemic, the result has been very large changes both to the numbers of those coming for work and study, and to their composition, both in terms of countries of origin and in the sectors and occupations of new migrants. It has also resulted in a political backlash, resulting in significant further changes to the system announced in December 2023. I discuss the evidence to date of the impact of recent migration trends on the UK economy and labour market, distinguishing between different sectors.

That Brexit disrupted the UK economy is widely agreed. Studies refer to its impact on exports and imports and on food prices. Less work has been done with respect to the impact on the labour market. This article concentrates on the relationship between vacancies and unemployment, which serves as an indicator of labour market tightness. Post-Brexit, the number of vacancies relative to the number of people unemployed increased dramatically. Analysis is based upon difference-in-difference methods. It suggests that by mid 2022 the UK’s V/U ratio might have been some 25% higher than it would have been without Brexit.

Organizations are utilizing digital technologies to modernize their innovations in today’s competitive and rapidly changing market environment. This study’s goal is to explore the influence of open innovation on firms’ digital technology integration, aiming to enhance their innovation skills and produce competitive, adaptable digital solutions. The methods used include analysis, synthesis, and generalization. Organizations can enhance open innovation by acquiring knowledge, capabilities, ideas, technologies, and information for new products and services, with the relationship between open innovation and digital innovation accelerating their capabilities. The study emphasizes the challenges organizations face in modern IT, emphasizing open innovation, access to external knowledge, and the need for improved internal production efficiency and competitiveness. The practical value of this study is manifested in the identification of strategies for optimizing open innovation for their transformation into digital solutions.

Forecasts play a central role in decision-making under uncertainty. After a brief review of the general issues, this article considers ways of using high-dimensional data in forecasting. We consider selecting variables from a known active set, known knowns, using Lasso and One Covariate at a time Multiple Testing, and approximating unobserved latent factors, known unknowns, by various means. This combines both sparse and dense approaches to forecasting. We demonstrate the various issues involved in variable selection in a high-dimensional setting with an application to forecasting UK inflation at different horizons over the period 2020q1–2023q1. This application shows both the power of parsimonious models and the importance of allowing for global variables.

Several decades ago, Sig Prais concluded that the root cause of the UK’s poor industrial performance was the poor quality of education and training. In this lecture, I will make a related argument, focussing on the lack of opportunity in the United Kingdom for workers who have not succeeded in the formal education system and the long-lasting impacts this has on their economic, health and social wellbeing. I will highlight the importance of providing opportunities for continued training over a worker’s lifetime for appropriate skills that are valued in the workplace in order to achieve inclusive growth.

This analysis aims at providing an interim assessment of the ECB’s current policy rate tightening cycle. Our analysis suggests that the ECB’s monetary policy measures are tightening financial conditions and reducing credit volumes in the euro area reducing credit volumes. In view of the lags from financing conditions to the real economy, the impact of the policy tightening cycle on inflation can currently be observed only to a limited extent. The scale of the policy tightening required to return inflation to the two percent target over the medium term will need to be regularly reviewed, in view of the uncertainty about the transmission mechanism and in line with the incoming evidence concerning underlying inflation dynamics.

We show consumer expectations indices from the Conference Board and the University of Michigan predict unemployment upticks in the USA up to 18 months in advance, both at national and at state level. These data predict six of the last six recessions called by the NBER Business Cycle Dating Committee 6–18 months before the date of recession. The consumer expectations data for 2021 and 2022 are consistent with recession.