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Reports

UK economy to receive £8.6 billion boost from this week’s leap year day, increasing growth by 0.3 percentage points
February 29, 2024

Cebr analysis published last week considered the effect of the leap year day on earnings. In this short follow-up note, we present our estimates of the GDP impact. Though higher frequency economic statistics are seasonally- and calendar-adjusted, meaning the impact of extra working days is largely smoothed out, there is no adjustment for leap days

Non-salaried workers to earn an extra £530 million due to next week’s leap year day
February 26, 2024

Thanks to Pope Gregory XIII’s overhaul of the shoddy Julian calendar in 1582, 2024 is a leap year. Relative to 2023, England will see three extra working days this year: one for the leap year day of February 29th, one due to the lack of a coronation, meaning fewer public holidays, and one less weekend day. This

Assessments of the labour market remain subject to uncertainty, but this should not deter the Bank of England from cutting rates
February 19, 2024

In October, the Office for National Statistics (ONS) unexpectedly pulled the plug on the publication of some of its flagship labour market statistics, covering metrics such as unemployment, employment, and economic inactivity. Citing issues with sample sizes and the broader methodology behind the Labour Force Survey (LFS), the statistics were deemed to be unreliable. The figures

UK house prices still falling, but the outlook for 2024 is changing course
February 12, 2024

The UK housing market has faced a period of significant headwinds, with elevated mortgage rates, a sluggish economy, and a cost-of-living crisis all contributing towards a gloomy picture. Indeed, the most recent official data released by the Land Registry are particularly notable, demonstrating that average UK house prices fell by 2.1% on an annual basis in

Cebr raises its forecasts for corporate insolvencies in 2024 from 28,000 to 33,000
February 5, 2024

In September last year, Cebr predicted that we would see 7,000 companies going insolvent each quarter in the UK in 2024 [1]. When the data came out for Q4 2023 about a week ago it was clear that we had reached that level already, with 6,788 insolvencies in England and Wales, 314 in Scotland and 81

With an expected recession in the rear-view mirror, the UK’s prospects for 2024 have improved
January 29, 2024

The UK economy has battled sluggish growth for years. Though shocks such as the pandemic and the cost-of-living crisis take a large share of the blame, questions remain regarding the country’s economic fundamentals. Still, signs are emerging that the economy has already hit the depths of the current economic cycle and is, therefore, now on the path

Are tax increases starting to suffer from the law of diminishing returns?
January 22, 2024

The September UK borrowing figures indicated to the OBR that borrowing was running £19.8 billion below forecast. Just two months later, the November data showed borrowing £6.3 billion above forecast. A £26 billion turnaround in two months is quite a change. At first sight the financial turnaround suggested a dramatic collapse in public finances. But

More generous childcare support would make the UK more attractive to international talent
January 12, 2024

Arguments in favour of government childcare support are often built on emotional pillars, pleading to one’s sense of righteousness – we should help parents with childcare because it is the fair thing to do, the nice thing to do. It is the fair and nice thing to do, but it is also the economically sensible

An expected recovery in disposable income might encourage a late election but is unlikely to change its result
January 8, 2024

We are predicting a recovery in disposable income which might encourage a late election but is unlikely to be sufficient to change the result. The Prime Minister has announced that it is his working assumption that the next UK General Election will be held in the second half of 2024. Given the predictions in Cebr’s

The cost of Christmas is up nearly a quarter in three years
December 11, 2023

Last year’s Christmas season was the weakest for retailers since 1998, with elevated inflation and reduced consumer spending power leading to a significant cutback in festive expenditure. This continued a trend of problematic recent festive periods for retailers. Christmas 2020 was significantly impacted by pandemic-related restriction measures, which reduced retail sales. 2021 was on the

Failing to plan for migration means many of its significant benefits are lost
December 4, 2023

At the time of Brexit, few thought it would be followed by a two- to three-fold increase in net migration INTO the UK. Yet new migration data have recently been released that seem to suggest that this is, in fact, the case. Compared to a pre-Brexit average of around 250,000 a year, net migration into

National Grid’s optimistic approach leaves our energy system vulnerable to black swan events
November 20, 2023

With the clocks going back and the nights drawing in, once again it is time to assess the likelihood of the lights going out this winter.  Each Autumn National Grid, the Electricity System Operator (ESO), publishes its annual Winter Outlook report – its own assessment of this issue. In the past few years, we have

Bank of England review into forecast failings must focus on the people, not just the models
November 13, 2023

“Central banks have come under fire for missing their inflation targets, but at least as much because their inflation forecasts have really missed outturns.” This is a quote from a recent speech by Catherine Mann, Monetary Policy Committee (MPC) member. It is a position that seems to be shared across the Bank, given the terms

Covid lockdowns cost at least £118 billion in lost GDP, but what did it save?
November 6, 2023

Our conservative estimates are that lockdowns cost £118 billion in lost GDP, and possibly more than that in additional public spending. The current Covid Inquiry under Baroness Hallett is expected to cost £200 million[1]. While it is right that it covers medical outcomes, we must also account for the economic impacts and ask – was

The new normal – interest rates are likely to settle well above zero
October 30, 2023

Over the past few years, the world economy has faced a number of shocks that can be described as anything but ‘normal’. Global GDP fell by 2.8% in 2020, then bounced back from its Covid-induced recession, growing by 6.3% in 2021 (the highest since IMF records started in 1980) as vaccines became widely available. The

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