Time to leave?

Despite the housing market apparently reaching a tipping point where the word ‘collapse’ is not regarded as over-dramatic anymore, Britain is doing what it does best when times are tough - it is heading to the shops. According to the BBC, online sales have grown 75% over the past year to £4.5bn for the month of January - the equivalent of £74 per person in the UK.

David Smith looks at the wider picture:-

Retail sales volume jumped 0.8% last month and was 5.6% up on a year earlier. Sales of household goods rose nearly 10% in the latest three months, their best for six years.

In industry, the CBI said manufacturers were enjoying their longest run of sustained demand for 12 years, measured by the orders balances in its monthly surveys.

Some of this growth in demand is due to price cuts in clothes and electrical goods, according to the BBC. What does this tell us about price elasticity and income elasticity of demand for these goods?

In addition, the government announced record tax receipts in January, boosted by higher corporation tax receipts.

So is the picture really as gloomy as many economists think? David Smith ends his piece this week by considering the impact of migration on the UK economy - but not just in the direction we usually stress. The UK, after all, sees emigrants as well as immigrants, and he ends by writing:

Immigration is fascinating, and a new report from the Organisation for Economic Cooperation and Development, A Profile of Immigrant Populations in the 21st Century, has some juicy nuggets. We forget that Britons are often other countries’ immigrants. Three million of us live in other OECD nations.

Of these, worryingly, 1.1m are highly skilled people exports, educated to degree or diploma level. Some 340,000 of our highly skilled emigrants are in America, the world’s main people magnet.

Does Britain lose out from this brain drain? We produce doctors, nurses, business people and engineers for the rest of the world. But we are also a big importer of such people.

The figures show a curious recycling exercise. Some 1% more highly skilled foreigners work in Britain than highly skilled Britons work abroad, a surplus of 11,000.

Britain is a net exporter of the highly skilled to advanced economies; 14.9% of ours work in other OECD countries while only 6.5% of the highly skilled here are from there. We import skilled people from less advanced countries – they are nearly 10% of the highly skilled in Britain. To compensate for our brain drain, we drain developing nations. Not good.