The UK launched its Industrial Strategy yesterday, seeking to tackle the UK’s pervasive slow productivity growth. Developing technical skills is one of the key recommendations, through increasing teaching of STEM subjects, enhanced Computer Science education and “T levels,” the establishment of a National Centre for Computing Education and an Institute for Coding. Coincidentally, last week BT and Accenture launched their study “Tech know-how: The new way to get ahead for the next generation.” Though they both seem on the same page in promoting tackling technology skills shortages, there are important differences in emphasis.
Lost amid Europe’s political drama and recurrent euro doomsday scenarios is the fact that the Eurozone economy has a business cycle that is alive and well.
Our analysis suggests there is plenty of room left in the current expansionary cycle, which could see the single currency area enjoy a golden decade of economic growth.
More than four years into the current upturn, most indicators signal the Eurozone economy is still somewhere around mid-cycle, suggesting that – absent an unexpected shock – we should see several more years of sustained expansion.
One reason is that the amount of economic slack in the Eurozone countries – the size of the “output gap” before an economy hits a ‘speed limit’ above which growth comes with inflation – may be larger than commonly accepted.
Economy would be 2% smaller than otherwise expected by end of 2020 - equivalent to a £16bn hit to GDP
With Theresa May’s UK Government struggling to make progress in ‘Brexit’ negotiations with the EU and strike a deal for Britain to leave the bloc, Oxford Economics analysed the potential impact of the talks collapsing with no agreement.
Businesses remain fearful over risks of major economic upsets that could trigger a global slowdown - despite the present upswing in world growth, according to our latest quarterly survey of global corporate risk perceptions. Business fears over tensions between the US and North Korean and over potential US policy errors emanating from the Trump Administration have persisted since the summer, even as world growth has strengthened.
Equity earnings cycles to power ahead – especially in underperforming Europe and EM markets
The world economy is evidently in the midst of what many are calling a synchronised upswing in growth. A strong rebound in manufacturing, led by Europe, appears to be at the heart of the resurgence. And the pace of expansion has accelerated in recent months. This environment is fundamentally conducive to outperformance by assets leveraged to global growth.
Investors have now been uneasy for many months that in some key global equity markets, shares are becoming overvalued, with share prices relative to corporate earnings – P/E ratios ¬– stretched, especially in the United States.
But our analysis concludes that equity earnings cycles, especially in underperforming markets in Europe and emerging markets (EM), should continue to power ahead for some time.
Ten years on from the global financial crisis, and eyes are peeled for triggers for a new world economic upheaval. And chief among the prime suspects is debt, and especially household debt.
Last month, the International Monetary Fund highlighted the danger from big increases in both the level of household debt and the pace at which it is rising in many key economies. “Higher household debt is associated with a greater probability of a banking crisis, especially when debt is already high, and with greater risk of declines in bank equity prices,” the Fund warned in its influential Global Financial Stability Report.
Building on the IMF’s analysis, Oxford Economics has put the debt bogeyman under the spotlight.
We investigated just how great the risks really are, and just where they may lie, country by country, creating a global risk map to identify the debt danger zones to the world economy. This goes beyond the Fund’s study which while looking at 80 economies and across 25 years of data stopped short of naming the countries where the risks loom largest.
How closely linked is your disposable income to your overall wellness? Does sleep impact your quality of life? What about spending time outdoors or chatting with your neighbours? Our daily experiences and interactions impact our lives and wellness. But it’s not always so clear how to define and measure them.
In our latest research, we explore those questions and more, partnering with Sainsbury’s as we quantify, analyse, and track what it means to live well.
We asked more than 8,000 people to tell us how they’re living – from their relationships with partners, family and friends, to whether they own their own home, how secure they feel in their finances and jobs and much more. In the coming years, we will track how these factors change and impact our lives, creating the Sainsbury’s Living Well Index.
What will the highways of the world look like in five or 10 years’ time and what will this mean for the future of the automotive industry, not to mention the thousands of businesses in multiple industry sectors that supply them? For many, the hubbub in the media and among industry observers over electric vehicles drives an image in our imaginations of a world humming quietly to the sound of electric cars whizzing us happily to our destinations. It is a vision of more efficient journeys, clean air and a quieter environment.
A well-functioning, modern infrastructure is central to economic development and to quality of life. From the roads and railways needed to transport people and goods, to the power plants and communications networks that underpin economic and household activity, to the basic human need for clean water and sanitation, infrastructure matters to people and businesses everywhere.However, there have been relatively few attempts to track and monitor infrastructure investment across countries and sectors. This has made it difficult to predict how, where and when investment is most needed.
The economic impact of the US elections
With the US presidential elections less than two months away, our economists have taken a close look the economic policy put forward by the Hillary Clinton and Donald Trump campaigns and their macroeconomic impact over the coming years.
In this research briefing we describe how four key factors explain diverging economic trajectories under a Trump and Clinton presidency:
- Immigration policy
The analysis was created using our internationally renowned Global Economic Model, which provides a rigorous and consistent structure for forecasting and scenario analysis.
As an independent economic advisory firm, Oxford Economics has no political affiliation.
Recent years have seen startling growth in the reach of mobile technology. Such growth has been truly ‘global’ with vast investment in mobile infrastructure, supporting increased network coverage across emerging markets in all six continents. The impact of this extends far beyond convenience and consumer choice. Mobile internet technologies are transforming product and labour markets the world over. They are helping to propel ideas, connect businesses and customers and match workers to opportunities.
We are pleased to announce our new Exchange Rate Service. The Exchange Rate Service provides access to five-year forecasts of annual exchange rates for 150 economies against the United States dollar, and quarterly forecasts for the world’s largest 33 currencies against the dollar, the euro, the Japanese yen, and the British pound.
Clients receive a written report each quarter describing main drivers of change and the outlook under our baseline forecast and each of our five-year scenarios. In addition, we supply an Excel file that shows both the quarterly and annual results, updated once a month.
The Law Society asked Oxford Economics to refresh its 2014 study to produce forecasts of criminal Legal Aid expenditure under alternative scenarios. A number of factors could affect Legal Aid expenditure over the next five years, including the volume of Legal Aid claims, the impact of policy changes, and the composition of the caseload. We produce a baseline forecast which assumes that crime and prosecution rates remain unchanged in future years, and compare this to alternative forecasts which allow crime and prosecution rates to evolve in line with recent trends. Under both alternative scenarios, expenditure falls—by almost £20 million under the first scenario and by £111 million in the second. We have also investigated what could happen to criminal Legal Aid expenditure if recent government reforms prove effective in reducing the time taken (and therefore costs) per case. Assuming a related cost saving of 2.5-5 percent, this could further reduce criminal Legal Aid expenditure in 2021/22 by between £15 million and £34 million, under the various scenarios.
The IBM Institute for Business Value engaged Oxford Economics to reach out to nearly 1,300 Indian executives as part of a global survey of 2,151 business leaders focussing on the emergence of global ecosystems.