Morning Round Up

The fertility rate in England and Wales has fallen to its lowest level on record, according to the ONS.

With a little over 590,000 babies being born last year, the total fertility rate in England and Wales dropped to 1.44.

Meanwhile, in Scotland, fertility rates fell to 1.3, with 45,935 births last year – also registering as a record low.

Writing on the matter, Bloomberg’s Tom Rees said that “the figures will set off alarm bells over a worsening demographic crisis that is set to ramp up the pressure on the workforce and the public finances.”

According to most demographers, the fertility rate needs to be at around 2.1 children per woman to for the population to remain stable (not accounting for net migration).

(When considering immigration and emigration statistics, according to the World Population Review the UK has a net increase of 1 person every 1.22 minutes, with 1,872 births a day, 1,836 deaths per day and net migration of 1,142 per day).

According to the OBR’s latest Fiscal Risks and Sustainability Report, demographic changes – specifically an aging population – will put increasing pressure on the UK economy (not least on health and pension spending). For example, the report maintained that “the population of the UK is projected to increase by 13 million people by 2070, with two-thirds of this change among those aged 65 or older (the age at which health costs per person begin to rise sharply).” Here, the OBR noted that health spending was projected to rise from 7.6% of GDP today to around 14.5% of GDP in fifty years’ time. Spending on state pensions is also projected to rise from 5.2% of GDP to 7.9% GDP within the same period.

In the interest of international context, the average fertility rate across the globe is 2.3 with Niger, Chad, the DRC and Somalia having the highest rates at 6. Hong Kong, South Korea and Singapore have the lowest levels at 0.8, 0.9 and 1.1 respectively.

The British Retail Consortium’s shop price index published this morning has indicated that prices in the UK have fallen for the third consecutive month. Following July and September’s print, this marks only the third time deflationary print in almost three years.

This comes as prices fell at -0.8% on annualised basis for the month of October, missing expectations given that the general market consensus was pointing to a -0.5% print.

Following the print, the CEO of the BRC said that “Households will welcome the continued easing of price inflation […] But this downward trajectory is vulnerable to ongoing geopolitical tensions, the impact of climate change on food supplies, and costs from planned and trailed government regulation.”