On 14 October 2020, the Organisation for Economic Co-operation and Development (OECD) published results from its latest periodic survey of the UK economy. The main findings from the survey include:
- The UK economy contracted sharply during the COVID-19 crisis and while some activities have now picked up, demand is expected to recover only gradually.
- There are major downside risks related to COVID-19 and a disorderly exit from the EU Single Market.
- Monetary policy has eased. The Government rapidly put in place a range of substantial economic support measures to firms and workers but since July 2020 these policies have been adjusted or phased out and new measures introduced.
- Services account for a large share of our trade with the EU, but negotiations have focussed mainly on goods.
The OECD’s key recommendations include:
- Ensure support is available and adapted as needed based on epidemiological and economic developments, while not hindering the reallocation of resources towards firms and sectors with better growth prospects. Consider introducing more targeted measures.
- Further increase active labour market spending to assist displaced and low-skilled workers.
- Prioritise digital infrastructure, particularly in deprived regions, in the allocation of the planned increase in public investment. Ensure sound governance of infrastructure investments.
- Keep monetary policy accommodative until there are clean signals of price pressures.
- Keep low barriers to trade and investment with the European Union and others, particularly market access for the service sectors including financial services.
- Enhance communication on a no-deal exit.
- Prepare targeted support to firms and workers that may suffer the most.
- Put in place trade facilitation measures to smooth disruptions at the border.
The OECD survey findings can be accessed here.
Commenting on the survey, TIGA CEO, Dr Richard Wilson OBE said:
“It is notable that the OECD’s key recommendations to achieve a sustainable recovery include prioritising investment in digital infrastructure, innovation and skills. The Government should heed this advice. As a high-skilled, digital industry that supports economy growth across the UK, the video games industry is one of the sectors that the Government should promote over the coming months and years. To support the growth of our sector, the Government should increase the rate of Video Games Tax Relief, introduce a Video Games Investment Fund, renew the Skills Investment Fund and enable games businesses to recruit highly skilled people from overseas.”