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Real-time updates on the UK economy: trends, expectations and implications from business survey data

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  • Josh De Lyon
  • Swati Dhingra

Abstract

Covid-19 has caused substantial shocks to the UK economy, highlighting a need for real-time data to analyse trends. We use monthly business survey data from the Confederation of British Industry (CBI) to document recent trends and future expectations on multiple measures of firms' activity. The majority of firms have increased their volume of business every month since April 2021 but this growth is weakening. The decline is mirrored in expectations which have also become less optimistic. There is a narrowing gap between wage growth and price growth, pointing to a period of lower real wage growth. Labour shortages are affecting firms in all sectors, with at least half of all businesses in each sector experiencing a shortage of workers. Approximately half of firms report difficulty recruiting new workers while around one in five firms report issues retaining existing staff. One in ten firms report that the UK's point-based immigration regime is causing labour shortages.

Suggested Citation

  • Josh De Lyon & Swati Dhingra, 2021. "Real-time updates on the UK economy: trends, expectations and implications from business survey data," CEP Covid-19 Analyses cepcovid-19-026, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepcvd:cepcovid-19-026
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    File URL: https://cep.lse.ac.uk/pubs/download/cepcovid-19-026.pdf
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    References listed on IDEAS

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    1. Lee Elliot Major & Stephen Machin, 2020. "Covid-19 and social mobility," CentrePiece - The magazine for economic performance 583, Centre for Economic Performance, LSE.
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    3. Machin, Stephen & Costa, Rui & Dhingra, Swati, 2019. "Trade and Worker Deskilling," CEPR Discussion Papers 13768, C.E.P.R. Discussion Papers.
    4. Jiaqi Li & Anna Valero & Guglielmo Ventura, 2020. "Trends in job-related training and policies for building future skills into the recovery," CVER Research Papers 033, Centre for Vocational Education Research.
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    Cited by:

    1. Swati Dhingra & Thomas Sampson, 2022. "Expecting Brexit," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 495-519, August.

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    More about this item

    Keywords

    Covid-19; Brexit; UK economy; business performance; employment; wages; labour shortages;
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