Emily Fry

🚨 Vacancies alert!

We're currently hiring for three new roles. Applications for all three will close on September 19th.

See details and how to apply here 👉 buff.ly/EjyZen5

You can find the definitive starter pack for my fantastic @resfoundation.bsky.social colleagues here👇

bsky.app/starter-pack...

Personal update: I'm joining the Bank of England for six months - stepping away from my Resolution Foundation desk. I will be tweeting a bit less while I’m heads-down on policy work, but will see you on the other side!

Thanks Adam for this and for your interesting points on firms!

Chart-heavy thread incoming. This is an attempt to survey the research to answer the question - were the forecasts predicting a lot of Brexit damage correct? 1/n.

Between some to a lot would be absorbed by higher housing costs. But i) the wage gains in early career are long lasting (even if you move to another labour market), and ii) property tax reform would mean the Government can capture those higher housing costs to spend on e.g. better public services.

The power of place • Resolution Foundation Tracking English early-career workers using the Longitudinal Education Outcomes dataset, we show one-third of regional wage gaps arise from place, not people. Identical full-time workers earn about £1...

For our full report, co-authored with Richmond Egyei, ‪@tasoskitsos.bsky.social @gthwaites.bsky.social
@dalilariba.bsky.social & Enrico Vanino with even more charts see 👇

www.resolutionfoundation.org/publications...

So what should we do about this?

A) Build houses ALL types of housing in the most productive labour markets - including social and affordable housing.

B) Reform property taxes to tax housing properly.

C) Think hard about how to move the highest paying firms and functions around.

Instead, what matters is where high-value firms & functions - like headquarters - cluster.

FTSE listed companies are most likely to headquarter in London, and much less likely to headquarter in Birmingham, for example.

So what about differences in industry mix, occupations and firm size across England? We find that these explain little of the differences in pay between places. Most of the variation in pay is within industries and within firm size (the light blue bars in the chart below).

Some large cities - such as Birmingham and Manchester - fall below the regression line. I.e. they have smaller place effects that you would expect for their size.

So, how does place drive regional pay inequality?

One explanation is agglomeration - i.e. larger labour markets pay more. But we find that doubling a labour market’s size lifts pay by only 3.9 per cent, explaining just 24 per cent of the place premium.

People effects are smaller than place, accounting for about 1/4 of the gap. So, high-skilled workers do earn more everywhere, but place matters more.

Sorting matters too. High-earning-potential workers move to high-pay areas. That clustering explains 42 per cent of the overall wage variance.

Previously, research found that just 12% of the differences in pay was due to place. But using new methods, and new data, we find that *one-third* (34%) of the pay gap between areas is place.

Move an average worker from Dudley to Harrogate and they pocket an extra £1,300 a year (~5 per cent).

Because we follow the same workers as they switch jobs and regions, we can split wage gaps into “people effects” vs “place effects.”

We use the Longitudinal Education Outcomes dataset – a rich dataset which includes almost every worker in England born after 1985 - to track how 22-36-year-olds pay changes as they move across all 155 of England's Travel-to-Work Areas.

Pay varies hugely across England: in 2024 weekly pay was just £610 in Liskeard to £1,130 in London.

Is this because high‑earning areas attract inherently higher‑earning people, or because the jobs located there pay more to any worker?

Our new @resfoundation.bsky.social report finds out.

Greg Thwaites, Research Director at the Resolution Foundation, said: “England is beset by stark and persistent geographic wage inequalities, with Londoners’ typical earning twice as much as those living in places like Liskeard or Cromer. It’s often assumed that people are driving these divides, but in fact place-based pay penalties are rife across England. A typical early career worker could lose out on £1,300 a year just because of where their job is located. “Policy makers at local, regional and national levels can address these divides by creating the conditions for high-paying firms to locate to their areas, while avoiding an arms race between regions in subsidies for firms. “Moving to higher-paying areas can hugely boost young people’s career earnings, but housing is a major barrier to making these moves. Policy makers should do more to bring these housing barriers down.”

🚨 New research published today

Our latest report by Richmond Egyei @emilyfry.bsky.social‬ ‪‪@tasoskitsos.bsky.social‬ @gthwaites.bsky.social @dalilariba.bsky.social‬ & Enrico Vanino looks at the impact of place in regional inequality.

Read more ⬇️

buff.ly/ycjN6KI

Thanks Giles!

Trade and UK Productivity: From Global Markets to Local Gains

There's a really nice @productivity.bsky.social episode here on why trade is great for productivity, with @bartvanark.bsky.social interviewing @emilyfry.bsky.social and others

Here's the Pocket Casts link

pca.st/episode/ddfe...

With more day-to-day spending on health, and capital spending on defence, it's a step closer to being a country of doctors and nurses…with a lot of jets and tanks

This is based on the latest UK data (February 2025).

But with tariffs ramping up from March and trade flows shifting, one thing’s certain: there’s more volatility ahead.

As of February, the biggest contributor to that surge is... non-ferrous metals.

Exports of non-ferrous metals to the US (aluminium, copper, and *precious metals*) are up 1,358% since Feb 2024.

This isn't a global trend: exports to the RoW fell 50% since Feb 2024.

Non-seasonally adjusted UK goods exports to the US have jumped 31% since September 2024 (vs -1% to RoW), and are up 11% since February 2024 (vs -10% to the RoW).

What are we sending? More cars? More pharma?

Not quite.

Yesterday’s US GDP release showed how businesses can quickly respond to tariff threats.

Real US GDP fell 0.3% in Q1 2025 vs Q1 2024, dragged down by a surge in imports and inventories.

The headline number is tricky to interpret, but it raises a question: is the UK part of this import surge?

Trump Tariff Turmoil • Resolution Foundation President Trump’s tariff announcements have taken a wrecking ball to the global system of international trade, pushing US tariff rates back to early 20th century levels. Following the suspension of ‘r...

Short piece out tonight on what tariffs mean for UK living standards (h/t @emilyfry.bsky.social & @gthwaites.bsky.social). Key point: tariffs hurt the economy and destroy good jobs outside London & SE, so expect a policy response. But big risk is this turns into a global recession.

There has been a lot of focus on the UK's direct export exposure to the US, but this chart is the one that worries me.

In 2019, $24bn worth of UK motor vehicle value added ended up in the US via supply chains.

That’s 22% of ALL Britain’s motor vehicle output.

More or Less: Behind the Stats - Trump tariffs: All about the deficits - BBC Sounds Explaining the maths and economics of the US ‘Liberation Day’ tariffs

I spoke to More or Less about Trump's tariff formula

www.bbc.co.uk/sounds/play/...

🚨New today - @resfoundation.bsky.social latest research on who benefits from public services - and what it means for the Spending Review.

👇

The rare good-ish news story on the British economy—why Britain is surprisingly well-insulated from a tariff crash, at least compared to most of its peers:

Part, but not all of the answer is in quite how much (un-tariffed) services dominate British exports.

Link: www.economist.com/britain/202...