Blog: November 2018
As Theresa May faces a show-down in Parliament and tours the UK in a ‘charm offensive’, she is expected to turn to immigration to gain support for her deal. The Immigration White Paper may finally be published next week to assist this refocus. But the latest migration statistics indicate serious challenges are ahead.
Those of us with long memories will have seen elements of previous political and economic crises in the last week’s events. There was a whiff of the resignation of Mrs Thatcher in November 1990, the end of Sterling’s membership of the European Exchange Rate Mechanism in September 1992 and not a little of the financial crisis, which was triggered in August 2007. And yet while the former events bookended a recession and the latter led to one, so far our political crisis has not led to an extreme economic downturn. I think this is because the most likely outcome for an end game in the exit process is some form of agreement that leaves near frictionless trade in place with the EU for some years to come. Such an outcome, despite the political opinions of it, will limit the transitional costs of an exit from the EU.
UK labour productivity is significantly lower than that of many other similarly advanced economies and has been so for decades, with negative implications for UK living standards. To make matters worse, during the last ten years labour productivity growth has stalled in most industrialised countries, and particularly in the UK. This has led to a renewed policy focus on productivity growth, as evidenced by successive government productivity plans and efforts to re-invigorate industrial strategy.
Brexit is adding pressure to the already stretched health and social care workforce in the UK. One of the reasons is that the UK is seen as a less attractive place for current and prospective EU migrants. This is not just a perception. A new report by NIESR prepared for the Cavendish Coalition, shows that the Brexit Referendum has triggered an immediate reaction from EU healthcare professionals in terms of working in the UK: There are more leavers, and less joiners.
Today NIESR publishes new research for the Cavendish Coalition on the implications of Brexit for the health and social care sector. Our conclusions are stark: Brexit is likely to lead to a substantial shortfall in nurses and doctors which needs to be urgently addressed by new immigration policy.
Today, the Bank of England published minutes of the meeting of the Monetary Policy Committee that came to an end yesterday. At the meeting, the MPC decided to keep interest rates unchanged. The minutes also record the discussions that took place at the MPC about the Bank’s appropriate monetary stance. At NIESR, we have started quantifying the information content of MPC minutes and construct an index of the monetary stance.