Understanding the drivers of economic and social change in the UK

Transcription

1 Understanding the drivers of economic and social change in the UK Joe Staton, Experian Future Foundation William Thomson, Experian Economics Experian and the marks used herein are service marks or registered trademarks of Experian Limited. Other product and company names mentioned herein may be the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian Limited.

2 Data Assets: Future Foundation nvision 2

3 Data Assets: Experian Economics Mosaic Economics 3

4 2003: a year to remember 4

5 Little Britain (2003) 5

6 Some key themes 1. Demographics Age structures Changing life stages 2. Diversity Migration Nationality 3. Network Society Broadband Britain Networking Community Neighbourhoods 4. Has the Economy Changed Things? Boom and bust Unemployment 5. Wealth & Debt Trends Income distribution House prices Indebtedness 6. Geographical Trends Globalisation Role of London North vs South 6

7 1. Demographics 7

8 Age structure of UK population ( ) Source: Government Actuary s Department Experian Future Foundation/nVision 8

9 Future demographics Demographic projections: million 55+ Source: Government Actuary s Department Experian Future Foundation/nVision Base: UK 9

10 Post-retirement employment rate Source: Economic and Labour Market Review, National Statistics Experian Future Foundation/nVision Base: All aged 50+, UK 10

11 Changing life-stages and ages Age Age Old Age Mature & Free (post-family) Parents Young Adult (pre-family) Youth Childhood Source: Experian Future Foundation /nvision 11

12 2. Diversity 12

13 Long-term international migration Net Migration Emigration Immigration Source: International Passenger Survey (IPS)/rolling annual data to Q Experian Future Foundation/nVision 13

14 We have a lot to learn from the cultures and values of foreign lands % % Source: Experian Future Foundation /nvision Research Base: 1,200 respondents aged 15+, GB 14

15 I feel closer to people with the same national background as my own (% agree) Source: Experian Future Foundation /nvision Research Base: 1,200 respondents aged 15+, GB 15

16 There will be more harmonious relations between people from different cultural backgrounds and nationalities 45% Source: Eurobarometer Experian Future Foundation/nVision Base: UK 16

17 3. Network Society: On and Offline 17

18 Broadband Britain Source: Experian Future Foundation /nvision Research Base: 1,200 respondents aged 15+, GB 18

19 Internet I use the internet everyday 53% % 75% I use the internet at least once a week Source: Experian Future Foundation /nvision Research Base: 1,200 respondents aged 15+, GB 19

20 Created or updated a personal profile on a social networking site Source: Experian Future Foundation /nvision Research Base: 1,200 respondents aged 15+, GB 20

21 Attitudes to social networking (% agree) I have got back in touch with old 2009 friends 77% 75% Helps me keep up with my friends and family 45% Source: Experian Future Foundation /nvision Research Base: 1,200 respondents aged 15+, GB 21

22 If a friend or family member recommends a product or service to me I am much more likely to buy it (% agree) 72% Source: Experian Future Foundation /nvision Research Base: 1,200 respondents aged 15+, GB 22

23 How attached do you feel to Source: Eurobarometer Experian Future Foundation/nVision Base: UK 23

24 I need to be involved in the community or neighbourhood life (% agree) Source: Experian Future Foundation /nvision Research Base: 1,200 respondents aged 15+, GB 24

25 4. Has the economy changed things? 25

26 These are unprecedented times Many Britons seem to believe that their recession is the worst since the 1930s. The slump (in America) has been billed as the mother of all recessions. Consumers have had much to worry about : they are over-burdened with debt; house prices, their main store of wealth, are falling; and many feel their governments are mismanaging the economy. The main imbalance still requiring correction in America and Britain today is the private sector s heavy debt burden. If yesterday s big spenders become tomorrow s penny-pinchers, so the prospects of any consumer-led recovery could shrivel. Source: The Economist 16th March 1991 & 18th April

27 Boom and bust 27

28 Unemployment 28

29 It is called the business cycle GDP growth % GDP growth (lhs) m illions of unem ployed unemployment (rhs)

30 Is this recession different? Net flows onto claimant count Oct.08-Mar.09 It is a middle-class recession in the South, rather than the North, and it will be very different from others we have experienced in the past. Lord Desai, October 2008 Not True (so far) 30

31 5. Wealth and debt trends 31

32 Income distribution: The rich have got richer 32

33 Disposable income by household quintiles Dominated by top decile % Share Bottom 2nd 3rd 4th Top Deciles /7 2001/2 2006/7 33

34 House Prices 34

35 House price/income ratio needs to fall further House price to income ratio 7 6 South East 5 4 UK

36 Household indebtedness 36

37 Household Indebtedness Debt burden eases, but remains high by historic standards % of income 180 Indebtedness Mortgages Consumer credit Sources: Bank of England, Experian Reposessions (RHS) Financial strains worsen as repossessions rise number per quarter Reposessions Sources: Bank of England, Experian Household indebtedness has doubled over the decade driven largely by mortgage lending Repossessions have been drifting up since 2005 but there is a long way to go yet. 37

38 6. Geographical Trends 38

39 Globalisation Relocation of production Off shoring of service functions Focus on high value added sectors and R&D Linked to the global rather than the national or local economy Connectivity 39

40 PARIS SHANGHAI Global Cities 40 LONDON NEW YORK TOKYO

41 London s Primacy Greater London trends: Its share in UK GDP has increased and will continue to rise (currently 21%). London will continue to account for close to 15% of the labour market. The city will continue to account for an increasing share of the UK population 6.8% in 1990, 7.7% in 2008, reaching 9% by

42 City focus: Large urban areas remain key Leaders** Followers** Inner London LO Wolverhampton WM Southampton SE Coventry WM Milton Keynes SE Stoke-on-Trent WM Nottingham EM Bradford YH Birmingham WM Stockport NW Bristol SW Bolton NW Leeds YH Sunderland NE Manchester NW Middlesbrough NE Cardiff WAL Swansea WAL Glasgow SC Dundee SC 42

43 The North South divide? The South s share of UK Output 55% 50% 45% 40% 35% 30%

44 Debt penetration: North South split 44

45 What does this mean for our clients? Population Diversity Opportunities from family formers and the 55+ New ways of communicating with consumers as the old rules no longer apply Multi-cultural Britain is a healthier and richer Britain Openness to new cultures and values but strong sense of place and space still resonates Network Society New online neighbourhoods afford new targeting opportunities Economy Increased income disparities across households Household indebtedness has risen to unsustainable levels House prices return to normality This recession is no different Geography London competes with global cities, other UK cities fail to catch up Large urban economies dominate North South divide persists 45