Oecd Economic Surveys United Kingdom 2017

After a good performance until 2016, growth slowed in the first half of 2017. The unemployment rate has fallen to below 4.5%, but real wages are in a downward trend. Planned Brexit has raised uncertainty and dented business investment. Negotiating the closest possible EU-UK economic relationship...

After a good performance until 2016, growth slowed in the first half of 2017. The unemployment rate has fallen to below 4.5%, but real wages are in a downward trend. Planned Brexit has raised uncertainty and dented business investment. Negotiating the closest possible EU-UK economic relationship would limit the cost of exit. The authorities should allow automatic stabilisers to work and identify in advance productivity-enhancing fiscal initiatives on investment, to be implemented rapidly were growth to weaken significantly in the run-up to Brexit, while safeguarding fiscal sustainability. Comprehensive policy packages should boost the productivity of lagging regions and cities, which requires local transport investments to foster connectivity, spending on research and development to raise innovation, housing investments to ease the matching of skills to jobs, and greater educational attainment and training tailored to business needs. Enhancing teachers’ training and other incentives, in particular in disadvantaged schools, would address teacher shortages and improve skills. Low-skilled workers participate less in lifelong learning and introducing targeted re-training programmes would boost competencies more broadly. Tax and regulatory reforms of non-standard forms of employment would offset workers’ weaker bargaining power and ensure better job quality. SPECIAL FEATURES: REGIONAL PRODUCTIVITY; PRODUCTIVITY OF LOW-SKILLED WORKERS

Like many countries, the United Kingdom has been hit severely by the COVID-19 outbreak. A strict lockdown was essential to contain the pandemic but halted activity in many key sectors. While restrictions have eased, the country now faces a prolonged period of disruption to activity and jobs, which risks exacerbating pre-existing weak productivity growth, inequalities, child poverty and regional disparities. On-going measures to prevent a second wave of infections will need to be carefully calibrated to manage the economic impact.

This OECD Economic Survey of the United Kingdom examines recent economic developments, policies and prospects. Special chapters cover improving infrastructure and ensuring sustainable bank lending.

This 2017 OECD Economic Survey of Japan examines recent economic developments, policies and prospects. The special chapters cover productivity for inclusive growth and fiscal sustainability.

The UK economy recovered from the COVID-19 shock thanks to emergency support measures protecting jobs and incomes and a rapid vaccine rollout, but is slowing amid persisting supply shortages and rising inflation. Fiscal policy has to balance gradual tightening with providing well-targeted temporary support to households who are vulnerable to rising costs of living, supporting growth and addressing significant investment needs.

New Zealand is enjoying strong economic growth, driven by booming tourism, high net immigration, solid construction activity and supportive monetary policy. The fiscal position is sound, with low public debt and a balanced budget.