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2017 OECD Economic Surveys: United Kingdom 2017

image of OECD Economic Surveys: United Kingdom 2017

After a good performance until 2016, growth slowed in the first half of 2017. The unemployment rate has fallen to below 4.5%, but real wages are in a downward trend. Planned Brexit has raised uncertainty and dented business investment. Negotiating the closest possible EU-UK economic relationship would limit the cost of exit. The authorities should allow automatic stabilisers to work and identify in advance productivity-enhancing fiscal initiatives on investment, to be implemented rapidly were growth to weaken significantly in the run-up to Brexit, while safeguarding fiscal sustainability. Comprehensive policy packages should boost the productivity of lagging regions and cities, which requires local transport investments to foster connectivity, spending on research and development to raise innovation, housing investments to ease the matching of skills to jobs, and greater educational attainment and training tailored to business needs. Enhancing teachers’ training and other incentives, in particular in disadvantaged schools, would address teacher shortages and improve skills. Low-skilled workers participate less in lifelong learning and introducing targeted re-training programmes would boost competencies more broadly. Tax and regulatory reforms of non-standard forms of employment would offset workers’ weaker bargaining power and ensure better job quality.

SPECIAL FEATURES: REGIONAL PRODUCTIVITY; PRODUCTIVITY OF LOW-SKILLED WORKERS

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Basic statistics of United Kingdom, 2016

(Numbers in parentheses refer to the OECD average)

This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member countries.The economic situation and policies of the United Kingdom were reviewed by the Committee on 21 September 2017. The draft report was then revised in the light of the discussions and given final approval as the agreed report of the whole Committee on 3 October 2017.The Secretariat’s draft report was prepared for the Committee by Rafał Kierzenkowski, Mark Baker, Peter Gal and Sanne Zwart, under the supervision of Pierre Beynet. The Survey also benefited from contributions from Jagoda Egeland. Research assistance was provided by Gabor Fulop. Elisabetta Pilati formatted and produced the layout of the document.The previous Survey of the United Kingdom was issued in February 2015.

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