• The UK economy is facing an unusual level of uncertainty because of Brexit. This uncertainty primarily stems from the yet to be defined relationship between the UK and the EU but also from the economy's response to the new framework once it emerges. The UK government's White Paper, which set out its preferences for that new relationship, has failed to unite the government or Parliament, leaving open an entire spectrum of possible outcomes.

• Our central forecast under a ‘soft Brexit’ scenario is that the economy will grow at a pace that is consistent with its potential. This translates to annual GDP growth of 1.4 per cent this year and 1.7 per cent next year, which is broadly unchanged from our previous forecast. The risks to our GDP growth forecast are wider than before and tilted to the downside.

• As before, we condition our forecast on a gentle path of monetary policy normalisation with the next 25 basis point rate increase this month. On the fiscal side, we recommend that the government maintains its current level of spending (as a share of GDP) and raises the quality of public services.

• Last year the global economy expanded at its fastest pace since 2011. We expect global growth to continue at a similar rate in 2018 and 2019.

• We expect the pace of global economic expansion to slow to around 3.5 per cent a year in the medium term unless productivity growth picks up substantially.

• Although some advanced economies appear to be operating at close to full capacity and oil prices have increased, our expectation is that any rise in inflation will be muted. Central banks will only raise policy interest rates gradually.

• Recent announcements on tariff increases by the US and retaliations to these have added to the uncertainty about the global economic outlook. Ongoing trade talks create the potential for a rapidly changing situation which could create surprises to the global forecast outlook.

This article summarises the long-run decline in housing affordability in England and suggests this is substantially attributable to shortfalls in housing supply. Public attitudes to housing have become increasingly pro-development in recent years and the current policy framework – summarised in the article – seeks to provide a comprehensive and rounded response to the challenges facing the housing market.

This paper summarises the evidence from recent research relating to the British Planning system's impact on the supply of development. Planning serves important economic and social purposes but it is essential to distinguish between restricting development relative to demand in particular places to provide public goods and mitigate market failure in other ways, including ensuring the future ability of cities to expand and maintain a supply of public goods and infrastructure; and an absolute restriction on supply, raising prices of housing and other urban development generally. Evidence is presented that there are at least four separate mechanisms, inbuilt into the British system, which result in a systematic undersupply of land and space for both residential and commercial purposes and that these have had important effects on both our housing market and the wider economy and on welfare more widely defined.

In housing affordability levels and volatility, there could hardly be a greater contrast than between the UK and Germany. Differences in history, institutions and policies are explored in this paper. Residential housing supply has been far more expansionary in Germany and mortgage credit more tightly regulated. A sensibly regulated rental market and stable German house prices have combined to leave the rental sector with over half of tenures. Policy failures in the UK have resulted in widening intergenerational inequality, increased social exclusion, adversely affected productivity and growth and raised the risk of financial instability. Policy lessons are drawn for the UK, which go far beyond the remit of the immediately responsible Ministry of Housing, Communities and Local Government.

The paper discusses the many reasons why housing policy can appear to be both incoherent and ineffective - with too many Departments involved each with different objectives and a plethora of policies pulling in different directions. Drawing on earlier research findings the paper discusses three examples which have impacted on tenure mix – the growth in the private rented sector where policy initiatives – except for unintended side effects – have been limited and market and macroeconomic pressures have dominated; a range of tax anomalies which provide inconsistent incentives and generate considerable costs to the economy; and the impact of specific policies which concentrate on supporting owner-occupation through new build initiatives. The paper concludes by asking whether housing policy is inherently unable to withstand the pressures placed on it by both politics and macroeconomic realities.

In this note, we argue that a considerable part of the explanation for the benign wage growth in the advanced world is the rise in underemployment. In the years after 2008 the unemployment rate understates labour market slack. Underemployment is more important than unemployment in explaining the weakness of wage growth in the UK. The Phillips curve in the UK has now to be rewritten into wage underemployment space. Underemployment now enters wage equations while the unemployment rate does not. There is every reason to believe that the NAIRU has fallen sharply since the Great Recession. In our view the NAIRU in the UK may well be nearer to 3 per cent, and even below it, than around 5 per cent, which other commentators including the MPC and the OBR believe.