48,838 people
That's how many more 16-64 year olds the ONS estimates are in work in the orth East compared to a year ago
Some good news to start this week.
Latest ONS figures, released yesterday, show unemployment has fallen by 0.2pp on the quarter and 0.7pp on the year, down to 4.2%.
The North East is now just 0.3% above the UK average, the closest it has been, I think ever, certainly in the 30 years I could be bothered to chart.
Importantly though, in the last quarter there’s been a big swing out of economic inactivity (-2.8) and into employment (+2.7).
You all know I’ve been banging on about that, so it’s really pleasing to see - hopefully it shores up, rather than just being a blip. As it stands, the North East’s inactivity rate is still the highest in England (22.9%), but it’s in the same ballpark as the North West (22.6%) and Yorks and Humber (22.2%). Not so long ago we were at 25%, so it’s a substantial improvement.
We don’t know the full breakdown behind that change (regional figures are slow to release), but nationally the fall in inactivity has been driven by those aged 16-24, while long term sickness is now at record highs. I’d expect that will be reflected in the region too. So, lots of challenges ahead still, despite the positives.
Economy Flat like Flat Eric
There was some less good news from the ONS in the past week too - GDP continues to splutter, with just 0.1% growth in the first quarter of 2023. Productivity is worse and has fallen 0.6% on a year ago.
With the economy basically flat, it gives me the excuse to feature Flat Eric, who I remembered existed a week or so ago while trying to think of music videos which would entertain our four year old.
So, enjoy that while head-banging (preferably not against a wall).
Leamside Line campaign gains momentum
I joined a Transport North East event, hosted by law firm Womble Bond Dickinson last week, to hear about progress on what’s emerged as the most significant transport infrastructure project in the region.
The Leamside Line is a stretch of track which runs parallel to the East Coast Mainline through Co. Durham. It’s not been used since the 90s, and hasn’t seen regular passenger services since the 60s.
Reopening it would allow freight services to move off the Mainline, freeing up capacity, as well as provide the opportunity to connect some communities currently not served by rail.
It could also unlock that Holy Grail of North East transport, Metro expansion.
There’s a bit more info about it all here - but ultimately, when people talk about the Leamside Line, they are talking about a series of projects, an early one of which is the loop of Metro through Washington.
I was impressed by some of the stats - each Metro journey creates £11.80 of economic benefit for the region, so an extra 8 million journeys a year on this new loop would create £90m of benefit annually. 87,000 tonnes of carbon reduction. 1.7m fewer car journeys.
An outline business case has gone to the Department for Transport for all this, and while they await response, Transport North East have already begun work on the next, more detailed business case.
Devolution will unlock some of this - there’ll be more money to explore options, and to leverage in locally for investment, but it will require Westminster to put its hand in its pocket. We’re talking serious money - hundreds of millions.
This is one of those projects where volume and repetition are going to be important - if everyone who has the chance speaks loudly and frequently to policymakers about this, it helps move the dial.
There were business groups, people from industry, housing providers, all sorts, present at the event last week - so, that momentum seems to be building.
1 in 4 families in Boro have an adult child in the home
The Census 2021 continues to give us fascinating insight into the state of modern Britain - the latest snapshot is on adults living with their parents.
The part of the North East with the highest proportion is Middlesbrough with 25.3%, but Sunderland (24.8%) and South Tyneside (24.3%) aren’t far behind.
This number goes up significantly for lone-parent families - in the North East it’s 41% of those which have an adult child in the home.
There are lots of reasons why there might be more adult children living at home - house prices and availability, the cost of living, the pandemic, they are more likely to be students or be unemployed. They are also three times more likely to be doing unpaid care.
Interest rates go up
I sounded off about interest rates and the Bank of England on LinkedIn at the end of last week. An explainer which followed the decision to raise interest rates again to 4.5% got on my nerves - there's a link to that from my post.
It felt like it saying the quiet bit loud, in that it openly said that the purpose of raising interest rates was to make mortgages more expensive - whether yours or your landlord’s - and that although the causes of inflation were external (notably geopolitics and energy prices) individual people were going to have to carry the cost of it.
Now, I get the theory behind interest rates rises and inflation - rates go up, it costs more to borrow, and your savings earn more (if you have them), so you spend less.
But, given the situation, it seems like a cruel an unusual punishment to deliberately make the cost of borrowing more expensive, squeezing households even more, when they aren’t exactly spending frivolously.
As I’ve written before, retail sales volume is down 3.1% on a year ago, retail sales value is up 4.5%. We are spending more and getting less. Energy and food are driving inflation. The Bank’s own figures say households borrowed an extra £1.6bn in credit in March, and withdrew £4.8bn from banks and building societies. People are spending down savings or taking on borrowing to cover extra costs.
The Bank of England has a narrow remit, a target of 2.0% inflation. And it only really has one proper tool, interest rates. In normal times, with normal inflation and normal economic growth, then that’s fine - but, now, it feels like they are having to wilfully ignore the broader economic damage their actions will have in order to be seen to remain competent and in control.
It's a case of them using the one lever they have, targeting the one thing they can influence - but we clearly need the Government to take more constructive, fiscal action. Especially as constrained consumer spending will damage economic growth even more.
What I’ve been reading this week
The FT’s Jen Williams on Teesside Goings-On. Here’s a Twitter thread where she summarises the article, for those who cannot get around the paywall. (The Yorkshire Post’s new man on the ground Leigh Jones started the role this week too, you can follow him here.)
This great bit of writing from Jonathan Liew on Chelsea player Sam Kerr and the Women’s FA Cup Final
The joyful news that Greggs has agreed a detente with Westminster City Council, and the Leicester Square branch, which the Met Police had claimed would increase crime, will now be allowed to open until 2am. It’s not quite 24 hours, but it’s progress.
What to look out for in the next week or so
Regional GDP figures for Q3 2022 are out tomorrow (they were delayed from the start of the month)
North East Peer and Energy Efficiency Minister Lord Callanan is one of those in front of Parliament’s Environmental Audit Committee tomorrow morning
Data on housing characteristics and tenure at a subnational level is out on Friday
Inflation data is due on the 24th - there’s a fall predicted, down to 8-9%, but we’ll see
Working with me
I’m available for freelance policy-related commissions, with time to take on new things from mid-July.
I do things like:
translate your big research or academic paper into a useful policy briefing
help you take your big pile of data and tell stories with it
interview people and turn it into really nice written content
You can find out more about me on my website.
You can email me on worroom@substack.com or arlen@arlenpettitt.co.uk
I’m @arlenpettitt on Twitter, and you’ll find me on LinkedIn.