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Budget 2023 Reflections - Focus on the Supply-Side

Geoff Riley

16th March 2023

We are bringing together reflections on the UK's 2023 Spring Budget in this blog. It was essentially a budget focusing on trying to reinvigorate economic growth on the supply side. Faster sustainable growth is usually the best way to bring down debt as a share of GDP and lift real per capita incomes. But there are many supply-side constraints holding the UK back. Our monthly video update on the UK economy will be published soon.

This blog will be updated later on Thursday

Larry Elliott's summary of the Budget - effectively, not much to see here, officer - as he reflects on the various give aways, and the sense that things are perhaps marginally better than they might have been, but far from stellar, and the Budget is effectively priming the pump for the 2024 General Election.

Please read: Hunt’s budget shows Britain is doing less badly – that’s not the same as doing well (Larry Elliott)

Builders added to UK skills shortage list

Evidence of ongoing labour shortages in the construction sector, with a number of profession now deemed to be shortage occupations - bricklayers, roofers, carpenters, plasterers and so on.

Compared to pre-pandemic levels of activity in the sector, the number of vacancies in the sector is up by 65% compared to the period between January and March 2020, although its even higher in the hospitality sector.

Please read this article

Larry Elliott reflects on the confusing nature of current labour markets, with the Chancellor set to try and encourage people back into active labour market participation at a time when most of the data suggests that the labour market is doing well - with low unemployment and high, but falling, vacancies and the suggestion that real pay is also just starting to moderate.

And this indicates a fundamental problem with policymaking - like good comedy - timing is key and at the moment it could be the case that the lag between the changing economic environment and policy being implemented might result in inappropriate policies being adopted.

Please read: Hunt’s budget aims to push people back to work just as the jobs market weakens

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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