CFM Survey

From Peace to Preparedness: Analysing Europe's Expanding Defense Expenditures

The July 2024 CfM survey asked the members of its UK panel to outline the three most important economic policy challenges facing the incoming UK government. Generative AI was used to summarise and analyse their responses. Almost every panellist cites the UK’s poor economic growth, productivity and infrastructure as the most important challenge facing the incoming government. The poor state of public services; Brexit, immigration and trade-related issues; fiscal policy and public finances; and housing reform also mentioned as key challenges.

From Manifestos to Mandates: The UK Election in Focus

The June 2024 CfM survey asked the members of its UK panel to outline the three most important economic policy challenges facing the incoming UK government. Generative AI was used to summarise and analyse their responses. Almost every panellist cites the UK’s poor economic growth, productivity and infrastructure as the most important challenge facing the incoming government. The poor state of public services; Brexit, immigration and trade-related issues; fiscal policy and public finances; and housing reform also mentioned as key challenges.

From pledge to practice: Assessing the UK's net zero commitments

The May 2024 CfM survey asked the members of its UK panel to assess the impact of measures taken by the UK to meet its net zero commitment on its long-term economic growth. The panel was also asked to choose the most effective policy to reduce CO2 emissions in the UK. Most panellists believe that green policies have not had any impact on the UK’s long-term growth prospects. The majority of the panel advocate a carbon tax as the most effective way to curb CO2 emissions in the UK.

Evaluating the spring budget and the UK's fiscal rules

The March 2024 CfM survey asked the members of its UK panel to assess whether the newly announced cut in national insurance contributions would substantially stimulate GDP within a year. The panel was also asked to predict if the next UK government would have to raise taxes to make public debt sustainable. The survey concluded by asking the panel to assess the effectiveness of the UK’s fiscal rules in limiting the accumulation of public debt, relative to a no-rules scenario. Most panellists believe the national insurance contribution cut will not stimulate the UK economy and the subsequent government would need to raise taxes to ensure the sustainability of public debt. The majority of the panel believes the current fiscal rules are either ineffective or counterproductive in limiting public debt build-up, with a small fraction suggesting the rules are somewhat effective in their task.

Building Back Better? Assessing the impact of NextGenerationEU

The February 2024 CfM survey asked the members of its EU panel to assess the short-term impact of NextGenerationEU on recipient EU member states. The panel was also asked to forecast the programme’s effects on the growth prospects of recipient countries over the upcoming decade. Most panelists think the programme has supported the post-pandemic recovery of member states, but only to a limited extent. The majority of the panel believes that the programme will have a similar small, yet positive impact on long-term growth in recipient countries over the upcoming decade.

Unravelling the Chaos: Evaluating the UK Tax Regime

The September 2023 CfM survey asked the members of its UK panel to assess the effect of tax reform on the UK’s growth over a 5-year horizon. The panel was also asked to identify which tax was in the greatest need for reform. Most panellists think tax reform will positively impact growth in the UK in the near future, with only a small fraction believing that it is unlikely to affect growth significantly. Almost all of the panel believes that all taxes are in dire need of reform, with some panel members highlighting the need to reform personal income taxes in particular.

Balancing Act: Disinflation and Recession

The July-August 2023 CfM survey asked the members of its UK panel to predict whether the Bank of England could bring inflation down to its 2% target by the end of 2024 without inducing a recession. The panel was also asked whether a recession was a price worth paying to bring inflation down to its target. Most panelists think that the UK is headed for a recession in the next 18 months as the Bank of England tightens monetary policy further. The majority of the panel also expresses its support for the Bank of England to do “what it must” to bring inflation under control. A small fraction of the panel remains opposed to further interest rate hikes due to already-high interest rates and the detrimental impact that further increases could have on households. 

Artificial Intelligence and the Economy

The May 2023 CfM-CEPR survey asked the members of its European panel to predict the impact of Artificial Intelligence (AI) on global economic growth and unemployment rates in high-income countries over the upcoming decade. Most panellists think that AI is likely to boost global growth to 4-6% per annum (relative to an average of 4% over the past few decades). A small fraction believes that AI is unlikely to affect growth rates. Most of the panel also believes that AI is unlikely to affect employment rates in high-income countries. The remainder is split between predicting an increase and a decrease in unemployment rates. Notably, most panellists indicate a great degree of uncertainty regarding their predictions, because AI is still in its infancy.

Causes for Weak Long-Run UK Growth

The March 2023 CfM-CEPR survey asked the members of its UK panel to identify the most important constraint on UK potential output in 2023. Most panellists think that Brexit remains the primary drag on the UK’s potential output this year. A small fraction cites poor labour force participation as a major constraint. Several panellists suggest public investments and R&D subsidies as a solution to boost UK GDP in the medium term. Most panellists believe a combination of policies would be the most effective way to achieve this objective.