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This week, the ONS published new data on consumer prices, revealing changes in the prices of breakfast staples.Since 1996, the average prices of sliced white bread and eggs have increased by over 150%. Following closely, tomato prices rose by 133% and pork sausages by 124%. In the same period, the average price of bacon has increased by 50% – recent years have been particularly volatile with an 11% rise since 2022. Mushroom prices have remained relatively stable over the last 20 years, falling by 3.1%.Across all items required for a basic Full English breakfast, a general upward trend in prices is evident, consistent with inflationary pressures over time. Periods of particularly notable food inflation were observed during the 2008 Financial Crisis and in 2023. Fortunately for Full English fans, prices have stabilised this year.
Yesterday, the ONS published new data on business demography in the UK, revealing that the construction industry saw the most growth in 2023 with 4,560 new active enterprises.Close behind, the health industry experienced notable expansion, with business births outpacing closures by 4,335.Despite 44,050 new wholesale trade and retail enterprises, the industry as a whole contracted with a net decrease of 3,515. The most significant decline was observed in the transport and storage sector, with a net total of 10,720 firms no longer active.
Donald Trump has won the U.S. presidential election resoundingly, carrying five swing states, with additional gains in Nevada and Arizona unconfirmed but likely. Trump also became the first Republican nominee to win the popular vote since George W. Bush in 2004.In the coming weeks, the Economics Observatory team will provide analysis on the election results and their implications for the U.S. and world economy.For insights into how Trump’s election may influence the stock market, read Clive Walker’s analysis from earlier this year
Daron Acemoglu, Simon Johnson and James Robinson have been awarded the 2024 Nobel Memorial Prize in Economic Sciences “for studies of how institutions are formed and affect prosperity.”Today’s #ChartOfTheDay recreates and extends a chart from their seminal 2005 paper, showing the divergent economic paths of North and South Korea. The laureates present the case of the two Koreas as a natural experiment between two halves organised in radically different ways - a system of Soviet socialism and a system of private property with government.In 1960, South Korea was one of the world’s poorest countries, with a GDP per capita comparable to that of Liberia or Guatemala. Today, it is a global economic powerhouse, with a per capita income more than 30 times greater than its northern neighbour.
In 2023, the United States' largest trade deficit for all goods was with China, amounting to $279.1 billion.Following China, the next largest trade deficit was with Mexico, where the net negative balance reached $152.5 billion.On the surplus side, the Netherlands was the USA's top trading partner, totalling $42.8 billion. Notably, this surplus is smaller than any of the USA's top 10 trade deficits. In 2023, the 10th largest trade deficit was with Italy, amounting to $44 billion, outsizing the surplus with the Netherlands.
Between 2021 and 2023, extreme weather and climate-related events cost EU member states over €162 billion.Recent floods in Central and Eastern Europe have led to a significant loss of life and incurred substantial economic damages. A 30-year moving average across data since 1980 reveals that climate-related financial losses have increased in recent years. With the IPCC predicting that extreme weather events will become increasingly frequent and severe, how will European countries fare with the growing cost?The COP29 Climate Conference is underway in Baku, with climate adaptation and resilience at the forefront of discussions. Listen to a panel of experts discuss 'How can we build a sustainable planet?' from our recent Festival of Economics on our page.
Last year, UK productivity was 24% lower than if it had continued climbing at its pre-2008 trend. Before the crisis, productivity grew at about 2% per year. Since the crisis, it has grown at just 0.5% per year. Slow productivity growth is hurting families, costing the average UK household £11,500 per year.What can be done to address the challenges facing the UK? Join us today at the Festival of Economics to find out how we can boost Britain’s low productivity. Our expert panel will debate the causes of the UK’s productivity stagnation and consider potential policy solutions. Join us to explore the extent of the challenge and to discover how boosting investment, improving education and training, exploiting technological innovation, and changes in regulation could help address the UK’s productivity puzzle.
In the last two decades, China has come to dominate the world’s steel supply. At the turn of the millennium, 16% of the world’s raw steel came from China. Today, it is a majority.European steel production has been squeezed hardest, making up just 7% today. In the UK, the industry is now on its last legs. With the forthcoming closure of the Port Talbot steelworks, the UK will become the only G7 country unable to make ‘virgin’ steel.Listen to Richard Davies, the director of the Economics Observatory, explore the decline of the industry in the new Radio 4 documentary Steel Dragons.
The US Democratic Party is the latest in a series of incumbent parties to lose vote share in 2024. Backlash against inflation may be driving these sweeping changes.This chart shows eight national elections held in high-income OECD countries. In every case, the incumbent party experienced a decline in vote share compared to the previous election.
Over the past four years, the ratio of public debt to GDP has remained close to 100%, the highest since the 1960s, and it has become increasingly unsustainable. The Office for Budget Responsibility (OBR) has issued a stark warning: unless policy reforms are made, the national debt could triple over the next 50 years. This expected increase is due to a combination of factors, including pressures from the ageing population, the climate crisis and rising geopolitical tensions. Each of these will put pressure on the public purse.These factors suggest that the UK is likely to continue to experience fiscal deficits averaging around 6% of GDP. Managing this fiscal imbalance will require the government to implement policies that not only stabilise debt levels but also foster longer-term economic growth.
More than 200 countries and territories are taking part in the Paris Olympics. At the opening ceremony, some countries needed full double-decker boats for their athletes, while others waved their flags from small Murano boats.China (388 athletes) and the USA (594) have large athlete delegations, while France (572), Slovenia (74), New Zealand (212), and Australia (460) have some of the highest athlete-to-population ratios.Despite their large populations, Pakistan (7), Bangladesh (5), and Myanmar (2) have few athletes at the Olympics.Somalia, with over 18 million people, has just one athlete. The Netherlands, with a population almost the same size, has 276 athletes competing.To find out more about the 2024 games, read this Economics Observatory article about home advantage.
Amid pressure to remove the two-child cap on benefits, the government has launched a new Child Poverty Unit. The cap, introduced by the Conservative government in 2017, means that families do not receive additional child tax credit or universal credit for third or fourth children born after April 2017.Over the last two decades, relative child poverty - the proportion of children in households with equivalised incomes below 60% of the median - has fallen slightly, though there has been a mild upward trend since 2013. Increases in the poverty rate for households with three or more children have been offset by a reduction for those with one or two children.To find out more about child poverty in the UK, read this Economics Observatory article detailing its history over the last 30 years.
