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Thanks Adam for this and for your interesting points on firms!

John Springford @johnspringford.bsky.social · 23/06/2025

Reposted by Emily Fry

Chart-heavy thread incoming. This is an attempt to survey the research to answer the question - were the forecasts predicting a lot of Brexit damage correct? 1/n.

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Between some to a lot would be absorbed by higher housing costs. But i) the wage gains in early career are long lasting (even if you move to another labour market), and ii) property tax reform would mean the Government can capture those higher housing costs to spend on e.g. better public services.

So what should we do about this? A) Build houses ALL types of housing in the most productive labour markets - including social and affordable housing. B) Reform property taxes to tax housing properly. C) Think hard about how to move the highest paying firms and functions around.

Instead, what matters is where high-value firms & functions - like headquarters - cluster. FTSE listed companies are most likely to headquarter in London, and much less likely to headquarter in Birmingham, for example.

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So what about differences in industry mix, occupations and firm size across England? We find that these explain little of the differences in pay between places. Most of the variation in pay is within industries and within firm size (the light blue bars in the chart below).

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Some large cities - such as Birmingham and Manchester - fall below the regression line. I.e. they have smaller place effects that you would expect for their size.

So, how does place drive regional pay inequality? One explanation is agglomeration - i.e. larger labour markets pay more. But we find that doubling a labour market’s size lifts pay by only 3.9 per cent, explaining just 24 per cent of the place premium.

People effects are smaller than place, accounting for about 1/4 of the gap. So, high-skilled workers do earn more everywhere, but place matters more. Sorting matters too. High-earning-potential workers move to high-pay areas. That clustering explains 42 per cent of the overall wage variance.

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Previously, research found that just 12% of the differences in pay was due to place. But using new methods, and new data, we find that *one-third* (34%) of the pay gap between areas is place. Move an average worker from Dudley to Harrogate and they pocket an extra £1,300 a year (~5 per cent).

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Because we follow the same workers as they switch jobs and regions, we can split wage gaps into “people effects” vs “place effects.”

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We use the Longitudinal Education Outcomes dataset – a rich dataset which includes almost every worker in England born after 1985 - to track how 22-36-year-olds pay changes as they move across all 155 of England's Travel-to-Work Areas.

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Resolution Foundation @resolutionfoundation.org · 23/06/2025

Pay varies hugely across England: in 2024 weekly pay was just £610 in Liskeard to £1,130 in London. Is this because high‑earning areas attract inherently higher‑earning people, or because the jobs located there pay more to any worker? Our new @resfoundation.bsky.social report finds out.

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Reposted by Emily Fry

🚨 New research published today Our latest report by Richmond Egyei @emilyfry.bsky.social‬ ‪‪@tasoskitsos.bsky.social‬ @gthwaites.bsky.social @dalilariba.bsky.social‬ & Enrico Vanino looks at the impact of place in regional inequality. Read more ⬇️ buff.ly/ycjN6KI

Greg Thwaites, Research Director at the Resolution Foundation, said:
“England is beset by stark and persistent geographic wage inequalities, with Londoners’ typical earning twice as much as those living in places like Liskeard or Cromer. It’s often assumed that people are driving these divides, but in fact place-based pay penalties are rife across England. A typical early career worker could lose out on £1,300 a year just because of where their job is located.
“Policy makers at local, regional and national levels can address these divides by creating the conditions for high-paying firms to locate to their areas, while avoiding an arms race between regions in subsidies for firms.
“Moving to higher-paying areas can hugely boost young people’s career earnings, but housing is a major barrier to making these moves. Policy makers should do more to bring these housing barriers down.”

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Reposted by Emily Fry

Giles Wilkes @gilesyb.bsky.social · 19/06/2025

There's a really nice @productivity.bsky.social episode here on why trade is great for productivity, with @bartvanark.bsky.social interviewing @emilyfry.bsky.social and others Here's the Pocket Casts link pca.st/episode/ddfe...

pca.st

Trade and UK Productivity: From Global Markets to Local Gains

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Emily Fry @emilyfry.bsky.social · 12/06/2025

With more day-to-day spending on health, and capital spending on defence, it's a step closer to being a country of doctors and nurses…with a lot of jets and tanks

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This is based on the latest UK data (February 2025). But with tariffs ramping up from March and trade flows shifting, one thing’s certain: there’s more volatility ahead.

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As of February, the biggest contributor to that surge is... non-ferrous metals. Exports of non-ferrous metals to the US (aluminium, copper, and *precious metals*) are up 1,358% since Feb 2024. This isn't a global trend: exports to the RoW fell 50% since Feb 2024.

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Non-seasonally adjusted UK goods exports to the US have jumped 31% since September 2024 (vs -1% to RoW), and are up 11% since February 2024 (vs -10% to the RoW). What are we sending? More cars? More pharma? Not quite.

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JamesSmithRF @jamessmithrf.bsky.social · 14/04/2025

Yesterday’s US GDP release showed how businesses can quickly respond to tariff threats. Real US GDP fell 0.3% in Q1 2025 vs Q1 2024, dragged down by a surge in imports and inventories. The headline number is tricky to interpret, but it raises a question: is the UK part of this import surge?

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Reposted by Emily Fry

Short piece out tonight on what tariffs mean for UK living standards (h/t @emilyfry.bsky.social & @gthwaites.bsky.social). Key point: tariffs hurt the economy and destroy good jobs outside London & SE, so expect a policy response. But big risk is this turns into a global recession.

resolutionfoundation.org

Trump Tariff Turmoil • Resolution Foundation

President Trump’s tariff announcements have taken a wrecking ball to the global system of international trade, pushing US tariff rates back to early 20th century levels. Following the suspension of ‘r...

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Emily Fry @emilyfry.bsky.social · 14/04/2025

There has been a lot of focus on the UK's direct export exposure to the US, but this chart is the one that worries me. In 2019, $24bn worth of UK motor vehicle value added ended up in the US via supply chains. That’s 22% of ALL Britain’s motor vehicle output.

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Emily Fry @emilyfry.bsky.social · 09/04/2025

🚨New today - @resfoundation.bsky.social latest research on who benefits from public services - and what it means for the Spending Review. 👇

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Reposted by Emily Fry

Archie Hall @archiehall.bsky.social · 08/04/2025

The rare good-ish news story on the British economy—why Britain is surprisingly well-insulated from a tariff crash, at least compared to most of its peers: Part, but not all of the answer is in quite how much (un-tariffed) services dominate British exports. Link: www.economist.com/britain/202...

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Reposted by Emily Fry

Resolution Foundation @resolutionfoundation.org · 08/04/2025

🚨Event tomorrow🚨 Public services are vital for families – providing ‘in kind’ benefits which provide a huge boost to the living standards of lower-income households. Sign-up for our event tomorrow to discuss future provision ➡️ buff.ly/OVqX64M

Advert for Making public services better for low-to-middle income families at the Resolution FOundation Office, 2 Queen Anne's Gate on Wednesday 9th April at 9.30am

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Reposted by Emily Fry

JamesSmithRF @jamessmithrf.bsky.social · 08/04/2025

We have an excellent event tomorrow morning on how the Government can turnaround its economic policy at the Spending Review with David Gauke and Sandra McNally: www.resolutionfoundation.org/events/publi.... Will feature new work on who benefits from public services by @emilyfry.bsky.social.

resolutionfoundation.org

Making public services better for low-to-middle income families • Resolution Foundation

Despite the cuts announced in the Chancellor’s Spring Statement, spending on public services is set to be on average £43 billion higher over the years of the upcoming Spending Review, compared with wh...

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Reposted by Emily Fry

Resolution Foundation @resolutionfoundation.org · 04/04/2025

With Trump's new tariffs coming into effect, how should the UK respond? In their piece from February, @emilyfry.bsky.social and @gthwaites.bsky.social suggested we should be cautious about retaliating. Read more➡️ buff.ly/9Z9LRmK

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Emily Fry @emilyfry.bsky.social · 03/04/2025

Brilliant rapid analysis of new US tariffs

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Reposted by Emily Fry

Thomas Sampson @thomsampson.bsky.social · 02/04/2025

Should the UK retaliate if Trump imposes tariffs? Economic case for retaliation is weak, but the political case is harder to judge. Hinges on whether you think retaliating creates leverage for future negotiations Overall, a tough decision and I could see it going either way

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Reposted by Emily Fry

Dan Neidle @danneidle.bsky.social · 02/04/2025

Today might be the day Donald Trump slaps tariffs on UK goods — because he thinks VAT is a tariff. Yes, he's wrong. But the reason *why* he's wrong is fun. So here's a 🧵 on the nerdy detail of VAT: via Jaffa Cakes and an economic theorem from 1936. buff.ly/6Lms19H

buff.ly

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This is unlikely to impact recent GDP data which are usually based on the output approach (as opposed to the expenditure approach which is affected by net trade).

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Key chart for Britain as we head into a tariff-ying April.

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Uncertain trade data combined with fast-moving trade policies creates a difficult environment for accurate forecasting, with risks to the downside for Britain.

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New analysis from the OBR reckons that - depending on how many countries are affected by US tariffs and if countries retaliate - the impact to the UK could peak at a 1% hit to GDP in 2026-27, and a 0.75% hit to GDP in the medium term. obr.uk/efo/economic...

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So the trade data revisions don't change the overall story of weak goods / strong services trade, but does change the picture on what appeared to be services trade slowdown for the UK in 2024. However, serious trade policy uncertainty and US-tariffs could affect Britain as soon as April.

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Pausing of Producer Prices publications - Office for National Statistics

Third, the ONS have said that they are no longer confident in their producer price series used to convert trade values into volume measures. This could lead to further revisions, particularly affecting certain goods data from 2023 and from before 2014. www.ons.gov.uk/news/stateme...

ons.gov.uk

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Goods imports have been revised upwards too, driven mainly by an increase in imports from Non-EU of 7.2% in 2023 (mainly from China and Japan rather than the US). Imports from the EU were revised upwards - by 1.4% in 2023.

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These revisions reverse the narrative that services trade growth was slowing in 2024. But we will have to wait for detailed services trade release for the details in April, and more revisions are likely at this stage.

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First, services trade has been revised upwards by 4.1% in 2023 & 6.7% in 2024, driven by stronger services exports in particular (up 5.1% in 2023 & 7.3% in 2024, in total worth £34.3 bn in 2024). Services imports were also revised upwards (up 2.7% in 2023 & 5.7% in 2024, worth £17.1 bn in 2024)

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But the bigger story today is the ONS revisions which changes our understanding of trade in 2023 and 2024.

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Btw Dec 2024 & Jan 2025, goods exports rose by 6.3%, driven by strong growth in exports to Non-EU. Monthly goods data is volatile so we shouldn't read too much into this rise. Goods imports were unchanged overall, although imports from the EU fell by 2.6%, while imports from Non-EU rose by 2.9%.

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