• Our baseline forecast is for global growth of 3.5 per cent in 2012. Growth will accelerate to 4 per cent in 2013, representing a downward revision of about 1/2 percentage point in each year compared to our last forecast.

• This assumes a delayed but ultimately successful resolution of the Euro Area crisis. Nevertheless, we expect a mild recession in the Euro Area as a whole, as well as in the UK.

• We forecast growth of about 2 per cent in the US this year, while China and India, although slowing, will continue to drive world growth.

• The economy will contract very slightly (0.1 per cent) this year but grow by 2.3 per cent in 2013.

• Consumer price inflation will fall back to 2.2 per cent this year and 1.4 per cent in 2013.

• We expect the cyclically adjusted current budget to return to balance in 2016–17.

• We expect unemployment to continue to rise this year to about 9 per cent, and to remain elevated thoughout the forecast period.

The production of this forecast is supported by the Institute's Corporate Members: Bank of England, HM Treasury, Mizuho Research Institute Ltd, the Office for National Statistics, Santander (UK) plc and by the members of the NiGEM users group.

The current fiscal climate is focusing attention on the need for more efficient government. However, we have remarkably little rigorous information on which are the most cost-effective strategies for achieving common goals like delivering high quality education in deprived neighbourhoods or reducing carbon emissions. This paper argues that randomised impact evaluations can provide an effective way to generate the information needed to make government more effective. Advances in the theory and practice of running randomised evaluations mean that a wider range of questions can be answered than ever before. Elsewhere in the world, fundamental questions are being answered about how humans behave, which in turn are being used to design new policies which themselves are rigorously tested. By learning from these results, and by conducting more randomised evaluations on issues important to UK policy (both at home and abroad) it will be possible to design more effective policies and do more with less.

Educational inequalities are evident even before children start school. Those connected to disadvantage widen out as children progress through the education system and into the labour market. We document various forms of educational inequality. We then review available evidence for England about the impact of school-level policies on achievement and their potential for reducing the socio-economic gap. We discuss evaluation evidence under four main themes: school resources; market incentives; school autonomy; and pedagogical approaches.

This article explains the role of evidence in determining the recommendations made by the Low Pay Commission (LPC) for the National Minimum Wage (NMW). First, it sets out the process of recommending the minimum wage including the role of evidence. Second, it summarises the evidence available on the impact of the minimum wage before discussing how that evidence has informed the recommendations for the adult rate of the minimum wage in the LPC's reports. It concludes by assessing the extent to which the NMW might be regarded as a success and considers whether the recent financial crisis will alter the evidence-based approach so far adopted by the LPC.

This paper argues that evidence-based policy has clearly made a worldwide impact, at least at the rhetorical and institutional levels, and in terms of analytical activity. The paper then addresses whether or not evidence-based policy evaluation has had an impact on policy formation and public service delivery. The paper uses a model of research-use that suggests that evidence can be used in instrumental, conceptual and symbolic ways. Taking four examples of the use of evidence in the UK over the past decade, this paper argues that evidence can be used instrumentally, conceptually and symbolically in complementary ways at different stages of the policy cycle and under different policy and political circumstances. The fact that evidence is not always used instrumentally, in the sense of “acting on research results in specific, direct ways” (Lavis et al., 2003, p. 228), does not mean that it has little or no influence. The paper ends by considering some of the obstacles to getting research evidence into policy and practice, and how these obstacles might be overcome.

This paper reviews three UK-based welfare-to-work programmes featuring time-limited financial incentives to leave out-of-work benefits for employment. The policies considered are (i) the Employment Retention and Advancement demonstration, aimed at lone parents and the long-term unemployed; (ii) In-Work Credit, aimed at lone parents on welfare; (iii) Pathways to Work, aimed at recipients of incapacity benefits. I illustrate the difficulties in extrapolating from specific findings to general policy-relevant conclusions. Finally, I depict the challenge facing evaluators in future and point to the directions in which evaluation will need to develop if it is to contribute more fully to policy-relevant evaluation.

Conditionality has increasingly been part of benefit entitlement and its effects have been examined in a number of ways. While the focus of previous research has been on general conditions such as job search and acceptance of job offers, this paper examines conditionality specifically in relation to participation in training. Using data from a qualitative evaluation of a government programme, the Skills Conditionality pilot, the paper uses two hypotheses to critically assess the effectiveness of conditionality as a benefits policy: that it is successful in increasing participation in training; and that it is harmful by reducing time for job search.

The National Employment Savings Trust (NEST) is a new pension scheme that will be introduced for employees on modest incomes in the UK from 2012. This paper draws out the implications of the NEST, focusing upon low-paid employees and their employers using data from the Annual Survey of Hours and Earnings. The results suggest that the NEST will increase labour costs by between 0.6 and 0.8 per cent on average, and have a disproportionate effect on low pay industries and private sector firms employing fewer than 25 employees. The analysis highlights the potential role of the minimum wage to shield low pay workers from paying a share of the subsidies that the NEST will afford to its members.