The UK is headed for five years of lost economic growth as the government fails in its goal to “level-up” the country’s regions and reduce inequality, an influential think tank says.
Gross domestic output is unlikely to return to its pre-pandemic level before 2024, according to forecasts from the London-based National Institute of Economic and Social Research.
While output across the country will be lackluster, NIESR said, some regions will feel a sharper pinch. In London, it expects real wages will grow by up to 7% in the five years from the end of 2019 — but in the West Midlands, home to Britain’s third-largest city Birmingham, NIESR is projecting a 5% drop in inflation-adjusted pay.
The forecasts echo the Bank of England’s gloom, which said last week that GDP would remain below pre-pandemic levels “in the medium term.” Both projections will are a worrying omen for the ruling Conservative Party as it prepares for a potential general election in 2024. At the time of the last vote in 2019, then Prime Minister Boris Johnson made “leveling-up” to spread prosperity beyond London one of the key promises.
“The triple supply shocks of Brexit, Covid and the Russian invasion of Ukraine, together with the monetary tightening that has been necessary to bring inflation down, have badly affected the UK economy,” said Stephen Millard, NIESR’s deputy director for macroeconomic modeling and forecasting.
NIESR’s report chimes with Bloomberg’s own “Leveling Up Scorecard,” which shows the bulk of the UK has fallen further behind the country’s richest region of London and the South-East since 2019. It also fits with data from Reed Recruitment suggesting job openings are drying up, increasing the chances that the economy sputters to a halt or even falls into recession this year.
Addressing the UK’s growth issue “remains the key challenge facing policy makers as we approach the next election,” he added.
Growth is being constrained by the fact that the government is now continually spending more than its income, said NIESR’s director Jagjit Chadha. He said that reduces the scope for Sunak to offer tax cuts or other sweeteners to voters ahead of the election.
“The triple supply shocks of Brexit, Covid and the Russian invasion of Ukraine, together with the monetary tightening that has been necessary to bring inflation down, have badly affected the UK economy,” said Stephen Millard, NIESR’s deputy director for macroeconomic modeling and forecasting.
NIESR’s report chimes with Bloomberg’s own “Leveling Up Scorecard,” which shows the bulk of the UK has fallen further behind the country’s richest region of London and the South-East since 2019. It also fits with data from Reed Recruitment suggesting job openings are drying up, increasing the chances that the economy sputters to a halt or even falls into recession this year.
Addressing the UK’s growth issue “remains the key challenge facing policy makers as we approach the next election,” he added.
Growth is being constrained by the fact that the government is now continually spending more than its income, said NIESR’s director Jagjit Chadha. He said that reduces the scope for Sunak to offer tax cuts or other sweeteners to voters ahead of the election.
“The triple supply shocks of Brexit, Covid and the Russian invasion of Ukraine, together with the monetary tightening that has been necessary to bring inflation down, have badly affected the UK economy,” said Stephen Millard, NIESR’s deputy director for macroeconomic modeling and forecasting.
NIESR’s report chimes with Bloomberg’s own “Leveling Up Scorecard,” which shows the bulk of the UK has fallen further behind the country’s richest region of London and the South-East since 2019. It also fits with data from Reed Recruitment suggesting job openings are drying up, increasing the chances that the economy sputters to a halt or even falls into recession this year.
Addressing the UK’s growth issue “remains the key challenge facing policy makers as we approach the next election,” he added.
Growth is being constrained by the fact that the government is now continually spending more than its income, said NIESR’s director Jagjit Chadha. He said that reduces the scope for Sunak to offer tax cuts or other sweeteners to voters ahead of the election.
“The triple supply shocks of Brexit, Covid and the Russian invasion of Ukraine, together with the monetary tightening that has been necessary to bring inflation down, have badly affected the UK economy,” said Stephen Millard, NIESR’s deputy director for macroeconomic modeling and forecasting.
NIESR’s report chimes with Bloomberg’s own “Leveling Up Scorecard,” which shows the bulk of the UK has fallen further behind the country’s richest region of London and the South-East since 2019. It also fits with data from Reed Recruitment suggesting job openings are drying up, increasing the chances that the economy sputters to a halt or even falls into recession this year.
Addressing the UK’s growth issue “remains the key challenge facing policy makers as we approach the next election,” he added.
Growth is being constrained by the fact that the government is now continually spending more than its income, said NIESR’s director Jagjit Chadha. He said that reduces the scope for Sunak to offer tax cuts or other sweeteners to voters ahead of the election.
Source from: Bloomberg