Residential loan servicers and asset managers are facing a sharp rise in defaulted properties across the Sun Belt, as new data from Attom shows foreclosure filings jumping over 10% year-over-year in July. The distress is heavily concentrated in Texas and Florida, which led the nation in both new foreclosure starts and completed bank repossessions, creating an immediate need for lenders to expand regional default servicing capabilities and deploy targeted loss mitigation strategies to manage mounting credit risk.
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Foreclosures overall jumped higher in July, maintaining their consistent upward trend this year, although current activity points to a return to historical norms overall, according to Attom.
Foreclosure notices, comprising new starts, scheduled auctions and completed bank repossessions, jumped 10.4% from a year ago, the real estate data platform said in its latest report. Compared to June numbers, foreclosures increased by approximately 1%.
“The increase in foreclosure starts and completed foreclosures compared to last year shows that financial pressures remain a factor for some homeowners,” said Attom CEO Rob Barber in a press release.
The latest total represents 39,906 properties or one in every 3,603 housing units in the U.S. A year ago, foreclosures totaled 36,128, equal to one in 3,939 homes. The rate also worsened from one in 3,656 in June.
New lender foreclosure notices appeared on 26,648 homes in July, up 9.6% year over year from 24,302. The number also rose 1.6% from one month earlier, with the uptick reversing a drop in June when starts declined to 26,217.
Meanwhile, completed real estate-owned foreclosures came in at 4,764 units, near level with June’s 4,773. Completions were up 23.2% from a year ago when they landed at 3,866.
Although foreclosure activity may raise some red flags for the lending community, it remains relatively stable when compared to historical benchmarks, Barber said.
“While annual increases have become more common, current volumes indicate that the market remains relatively resilient overall.”
Recent month-to-month foreclosure numbers could be a promising sign of improved homeowner finances when taken into account with newly published delinquency data. Both Intercontinental Exchange and the Mortgage Bankers Association this month found easing of early-stage delinquencies over the spring and summer, but like Attom, they reported still-elevated stress when compared to a year ago.
Where the trouble spots are
Nevada performed the worst among U.S. states with a foreclosure rate of one in every 1,703 units last month. Two Southeastern states followed, with South Carolina posting notices on one in every 2,085 properties and Florida at one in 2,232.
New foreclosure notices popped up most frequently in Texas, with the Lone Star State reporting 3,306 July starts. Just behind was Florida at 3,277 filings. The nation’s most populous state, California, had the third-highest number with 2,540.
Texas also led the nation in completed REO repossessions last month, as banks took over ownership of 1,265 foreclosed residential properties. California was a distant second at 616 units, with North Carolina reporting 299.
The Texas cities of Houston and Dallas recorded the most foreclosure completions of large metropolitan areas with 405 and 223, respectively.
A recent hot-mic incident left passengers listening to crew criticism before landing. It’s not the first time such an incident has occurred on a commercial carrier.
India Rimmer, Hannah Copeland and Boromeus Wanengkirtyo
Global extreme weather events may feel far away, but they leave behind a trail of higher prices in our shopping baskets. As outlined in past Monetary Policy Reports, droughts, flooding and heatwaves occurring overseas often impact UK food inflation, which averaged 4.2% in 2025. But how much of the rise in food inflation last year can we blame on the weather? By constructing a new proxy for global weather shocks, we find that they increase UK food prices with a peak impact after one year. In the latest period, our model suggests that weather shocks contributed 0.8 percentage points to food inflation at peak in May 2025. Weather continues to matter for inflation amidst the current El Niño phenomenon.
Food prices have been blown off course
As set out in the August 2025 Monetary Policy Report, last year UK food and non-alcoholic beverage (hereafter ‘food’) inflation rose above its pre-Covid average of around 1.5%, peaking at 5.1% in August. This was partly due to higher labour costs and new packaging regulations, which increased costs for UK food producers.
But global weather shocks also contributed by reducing crop yields and raising food production costs (August 2025 Monetary Policy Report). Droughts in Brazil increased coffee prices while heavy rainfall and plant disease in West Africa raised the price of cocoa. Closer to home, beef and dairy prices rose after dry weather in the UK and elsewhere increased livestock feed costs. This is not a new problem, nor one that will go away. Climate change is increasing the frequency of extreme weather events across the globe, with consequences for the economy and monetary policy (Talbot (2026) and NGFS (2026)).
In particular, higher food commodity prices and with some delay UK consumer food prices seem to follow El Niño-Southern Oscillation (ENSO) phases, as suggested by Chart 1. ENSO is a weather phenomenon that affects temperature and precipitation across the world and can therefore have a large impact on global weather conditions. It has two opposite phases, El Niño (warmer-than-average) and La Niña (cooler-than-average).
Chart 1: Food commodity prices and UK food inflation
Notes: International Monetary Fund (IMF) food and beverage commodity price inflation and UK food and non-alcoholic beverage inflation alongside moderate-to-strong ENSO phases. Data to March 2026.
Sources: IMF Primary Commodity Prices, National Oceanic and Atmospheric Administration (NOAA) and Office for National Statistics (ONS).
A model to chart the storm
We calculate a new high-frequency proxy to estimate the economic impact of global weather shocks. This is a time series of unanticipated weather events, accounting for seasonality and the importance of each country for global agricultural exports. Proxies provide information about shocks that are otherwise difficult to measure.
To build our proxy we use European Commission warnings about crop conditions as outlined in Rembold (2018). This data set provides ten-daily warnings of climate anomalies for crop areas using data on rainfall and vegetation anomalies. To create a monthly series incorporating both positive and negative weather shocks, we calculate the deviation in the number of anomalies from the sample mean for each month and country. We calculate the mean over the entire sample period. As a result, we don’t capture climate trends, though this may be reasonable as our sample period is relatively short. Finally, we weight countries together by their share of global agricultural exports.
Chart 2 shows the resulting global weather shock series alongside moderate-to-strong ENSO phases. In constructing the series we find that localised weather shocks in countries with high weights, for example the US, Brazil, the Netherlands and China, have a large impact. However, as one can see in the chart, there is not such a clear-cut relationship with ENSO phases.
Chart 2: Global weather shock series
Notes: High-frequency global weather shock series alongside moderate-to-strong ENSO phases. Data to February 2026.
Sources: FAOSTAT, NOAA, Rembold (2018) and authors’ calculations.
To quantify the impact of global extreme weather events on UK food inflation, we estimate a proxy vector autoregression model using Bayesian methods (BVAR), partially identified by our new weather shocks series. The model builds on the methodology described in Arias et al (2021) and Copeland et al (2025), using a combination of proxies with zero and sign restrictions to identify the structural shocks.
We also use two other proxies, oil supply shocks from Känzig (2021) and gas supply shocks from Alessandri and Gazzani (2025). These help the model to differentiate between weather and energy supply shocks, which have often occurred independently but simultaneously, for example in 2022–23 when global adverse weather conditions coincided with a significant European energy shock.
In the spirit of De Winne and Peersman (2021), the target variable for the weather shock series, used to identify the structural shocks and determine instrument relevance, is a trade-weighted average of the IMF’s commodity price indices for four staple food commodities: wheat, rice, corn and soybeans. These groups make up a significant share of global food production as measured by caloric content and they are strongly affected by weather conditions (De Winne and Peersman (2021)). We also use real oil and gas prices, the sterling effective exchange rate index, a Covid-adjusted measure of UK real GDP, and UK food, energy and headline CPI inflation. The model is estimated on monthly data in log-levels, over a sample period of January 2006 to February 2026.
Results suggest we can blame (some of) it on the weather
Chart 3 shows the modelled impulse responses of UK food and headline CPI inflation to a weather-driven 1% rise in global food commodity prices. Food inflation rises by around 0.15 percentage points at peak after 12 months, while headline inflation increases by 0.09 percentage points, reflecting higher food, energy and core inflation. The rise in food inflation comes through with a lag, but is quite persistent, lasting for around 2½ years.
Chart 3: Impulse response functions of UK food and headline CPI inflation to global weather shocks scaled to increase grain commodity prices by 1% on impact
Notes: Impulse responses to the identified global weather shocks, normalised to increase grain commodity prices by 1% on impact. Estimation sample: January 2006 to February 2026. The solid line represents the median draw. The shaded areas are the 80% credible intervals.
Source: Authors’ calculations.
While our estimates are subject to uncertainty and represent only one approach to quantifying the impact of global weather shocks on consumer prices, the results are broadly consistent with expectations. Global weather shocks impact UK inflation moderately and with a lag, unsurprising given the length of harvest cycles. They also appear to have broad-based inflation impacts (NGFS (2026)) and seem to transmit to food and headline inflation indirectly, including via increased energy demand and prices. Higher energy prices may reflect weather shocks increasing demand for oil and gas via disruptions to biofuel production, for example. Similar studies also find moderate rises in energy prices in response to harvest shocks (Peersman (2022)). The impact to UK energy inflation in our model is non-trivial, 0.4 percentage points at peak.
Chart 4presents the estimated historical contribution of global weather shocks to UK food inflation alongside moderate-to-strong ENSO phases. In the latest period, the model suggests that global weather shocks made a peak contribution of 0.8 percentage points in May 2025, when food inflation was 4.4%. This faded by September and more recently has been pushing down on food inflation in the UK. Although our proxy does not perfectly capture ENSO events, periods of moderate-to-strong ENSO generally coincide with higher UK food inflation, with varying lags and magnitudes. For example, the model estimates that weather shocks contributed 1.7 percentage points to UK food inflation at their peak in 2017, following the strong 2015–16 El Niño.
Chart 4: Historical decomposition of past contribution of global weather shocks to UK food inflation
Notes: Historical contribution of global weather shocks to UK food and non-alcoholic beverage inflation, alongside moderate-to-strong ENSO phases. Data to February 2026.
Sources: Bank of England Monetary Policy Reports, NOAA, ONS and authors’ calculations.
Conclusion
By constructing a new high-frequency series of weather shocks, we have estimated that extreme global weather events have played a non-trivial role in UK food and headline inflation over the past two decades. Our results suggest that global weather disruption can have a significant, lagged, and persistent impact on UK consumer food prices.
As our proxy is constructed using data available in near real-time and weather shocks feed through to UK consumer prices with a lag, with further refinement this model has the potential to estimate the impact of current global weather shocks over the monetary policy-relevant horizon.
India Rimmer works in the Bank’s International Surveillance Division, and Hannah Copeland and Boromeus Wanengkirtyo work in the Bank’s Structural Economics Division.
If you want to get in touch, please email us at bankunderground@bankofengland.co.uk or leave a comment below.
Comments will only appear once approved by a moderator, and are only published where a full name is supplied. Bank Underground is a blog for Bank of England staff to share views that challenge – or support – prevailing policy orthodoxies. The views expressed here are those of the authors, and are not necessarily those of the Bank of England, or its policy committees.
Share the post “Has UK food inflation been under the weather?”
Coinbase (NASDAQ:COIN) CEO Brian Armstrong addressed the proposed confiscation tax in California, calling it “deeply un-American” and saying he is considering leaving the state. The comments were made during the Katie Miller Podcast, where Armstrong addressed a litany of issues surrounding crypto and the policies that impact the emerging Fintech sector.
The confiscation tax is set to be on the ballot in California this November. Officially called the“2026 Billionaire Tax Act,” the measure would confiscate 5% of any billionaire’s holdings, including unrealized gains in public and private securities. Theoretically, a targeted individual could see their control of a firm undermined or be forced to sell securities or borrow to cover the cost. And some bureaucrat would be enlisted to determine how much everything is actually valued – a terrifying concept. This would apply to affluent individuals and married couples who are residents as of January 1, 2026. It also opens the door to future taxes on individuals who are not considered billionaires. The proposal has already caused an estimated $2 trillion in net wealth to flee the state, with Texas and Florida as the biggest beneficiaries.
This past March, the Hoover Institution based at Stanford University shared that nearly 30% of the tax’s targets had already left the state. The report anticipates that the tax could raise up to $40 billion over 5 years, nowhere near the $100 billion goal. Because wealth has already left California, the net result could be lower state tax revenues, and that loss would be permanent. Over time, the confiscation tax could have the exact opposite effect of its described goal of raising more money for the state of California.
Additionally, California has been plagued by profound fraud and failed projects, depicting a state government that is a poor fiduciary of taxpayers’ funds. Tens of billions of dollars have been lost to health care fraud, and the proposed high-speed train project has spent billions of dollars, has not laid high-speed track on the main line, and has no operating trains. Groundbreaking for the train took place in 2015, over ten years ago.
It is difficult to understand how more money for the state of California will solve current problems and will most likely exacerbate them.
Armstrong believes seizing assets is probably unconstitutional. He views the confiscation tax as like a “third-world country” and a dangerous path to pursue.
“I think it is bad for the state and bad for America,” said Armstrong, who added they are considering any and all options in terms of relocation.
If Armstrong and Coinbase leave California, the state will lose a growing, innovative firm that employs around 1,000 individuals. But if Coinbase departs California, they will join a growing list of firms that have made the same decision, which also includes looking out for their shareholders
Interesting things are happening in the bond market, and “interesting” does not mean good news for bond investors. The yield on the 30-year Treasury bond recently rose to its highest level since 2007. As of this writing, the 30-year Treasury yield is about 5.172%, up about 65 basis points from its 52-week low.
Some bond investors are worried that U.S. government borrowing has become unsustainable, and are demanding higher yields on long-term government debt.
How nervous should you be about higher yields on the 30-year Treasury bond? At the moment: not very. Let’s look at what’s happening in the bond market and see what it might mean for your investments.
Many bond ETFs have delivered negative returns in recent years due to rising interest rates. Image source: Getty Images.
What’s driving higher bond yields?
Just because the 30-year Treasury bond yield is over 5% doesn’t mean there’s going to be a government debt crisis or a recession or a stock market crash. There are a few other causes of higher bond yields that are not necessarily bad news for Treasury bond investors.
One reason for higher yields on Treasury bonds is higher inflation and strong economic growth. If bond investors believe that higher inflation (and higher interest rates) are here to stay, they will demand higher yields on long-term debt. This is a natural consequence of strong economic growth and inflation remaining stubbornly above the Fed’s 2% target. It doesn’t mean a debt crisis is coming; it might just mean that the bond market is repricing the risk of long-term debt.
Another cause of higher long-term Treasury bond yields is the recent increase in borrowing by major tech companies that are issuing hundreds of billions of dollars in corporate bonds to pay for artificial intelligence (AI) data centers. These corporate bonds from AI hyperscalers are adding supply to the bond market, driving down prices for long-duration U.S. government bonds.
Bond yields and bond prices go up and down
Bond yields are an interesting data point to follow in financial markets because they represent the price of money. U.S. Treasury bonds are defined as offering a “risk-free” rate of return, so when the yield on long-term U.S. Treasuries goes up, it can make some investors nervous. It’s often seen as a sign that “bond vigilantes” are coming to punish the U.S. government for borrowing too much money, or that investors are losing confidence in the federal government’s ability to pay its debts.
Unless you’re a professional bond trader who’s managing money for a large institutional investor, you probably shouldn’t worry too much about short-term moves in the bond market. Bond yields and bond prices fluctuate for all kinds of complex reasons, just like stocks. Short-term volatility is normal, and it’s better to stay the course than to make any knee-jerk moves out of fear.
How to invest in bonds now
Deciding which bond ETFs to buy for your portfolio depends on your risk tolerance and what you believe about the future. Long-dated bonds, like 30-year Treasuries, tend to be more sensitive to the risk of rising interest rates.
If you believe that the national debt is too high and interest rates are likely to go higher, you probably shouldn’t buy long-term Treasury bonds like the ones held by the iShares 20+ Year Treasury Bond ETF(TLT -0.20%). This bond ETF has suffered from the past few years of rising interest rates. Its average annual total return has been negative (-8.18%) for the past five years.
iShares Trust – iShares 20+ Year Treasury Bond ETF
Today’s Change
(-0.20%) $-0.17
Current Price
$83.30
Key Data Points
AUM
$47B
Dividend Yield
4.69%
Expense Ratio
0.15%
A short-term bond ETF might be a better choice for many investors who are worried about rising interest rates. The Vanguard Ultra-Short Bond ETF(VUSB +0.00%) is much less vulnerable to interest rate risk than long-term Treasuries. This Vanguard bond fund has delivered average annual returns (by net asset value) of 3.54% over the past five years and 5.25% over the past three years.
Vanguard Bond Index Funds – Vanguard Ultra-Short Bond ETF
Today’s Change
(0.00%) $0.00
Current Price
$49.76
Key Data Points
AUM
$9.3B
Dividend Yield
4.31%
Expense Ratio
0.10%
Top Holdings
ALCPB.PA
0.20%
The bond ETF I own: Vanguard Total Bond Market ETF (BND)
Personally, I don’t believe in buying lots of long-term bonds. I don’t think 30-year Treasuries are the best choice for my portfolio. Instead, I buy the Vanguard Total Bond Market ETF(BND -0.12%).
This bond fund owns 11,451 bonds of all types, including Treasuries and corporate bonds, with a diverse range of bond durations. Like other bond ETFs, its performance has struggled in recent years, with an average annual return of -0.42% over the past five years.
Vanguard Total Bond Market ETF
Today’s Change
(-0.12%) $-0.09
Current Price
$72.58
Key Data Points
AUM
$397B
Dividend Yield
4.02%
Expense Ratio
0.03%
But over the past 19 years, since the fund’s inception in April 2007, BND has delivered average annual returns of 3.00%. Interest rates fluctuate, and some bond prices will go up or down, but over the long run, I believe the Vanguard Total Bond Market ETF is one of the best low-cost ways to include bonds in my portfolio.
A lot has been written about UK productivity and how weak it’s been in recent years. This post assesses UK productivity trends in a historical and cross-country perspective. Productivity growth has been weak across G7 economies over the past two decades, reflecting the end of the information and communications technology (ICT) revolution and the flattening gains from globalisation. The slowdown was particularly large in the UK, mainly because it experienced a larger decline in the share of manufacturing than peers and then because of the impact of Brexit. In recent years, US productivity growth has been accelerating thanks to tech, offering some optimism for the future of UK productivity.
Productivity growth is of key interest to policymakers including the Monetary Policy Committee as it determines the ‘speed limit’ of the economy in the short/medium run and is the primary driver of living standards in the long run. Since the global financial crisis (GFC), the annual growth rate of UK labour productivity (output per hour) has been lower than in the previous century (Chart 1). Productivity growth has been weak across advanced economies, but the UK has been below the US and EA19 average, averaging 0.5% for the market sector over 2008 to 2025 (Table A). The US has averaged 1.7%, well above peers, partly driven by strong productivity growth since Covid.
Table A: Labour productivity (output per hour) annual growth rate for the market sector, annual average
UK
US
FR
DE
EA19
1998–2007
2.5%
2.9%
2.4%
2.2%
1.9%
2008–19
0.3%
1.5%
0.7%
1.0%
1.0%
2020–25 Q3
0.7%
2.2%
-0.3%
0.5%
0.6%
Note: ‘Business sector’ is the business sector in the US, the market sector in the UK and the total economy excluding mostly public sectors and real estate in Europe.
Sources: Authors’ calculations using BLS, Eurostat and Office for National Statistics (ONS).
Chart 1: Output per hour for the total economy, annual growth rate
Source: Authors’ calculations using the Long-Term Productivity Database, 2026 edition.
The ICT revolution and the high productivity growth of the 1990s/2000s
The manufacturing and tech services sectors experienced an exceptional transformation in the 1990s and early 2000s with unprecedented productivity gains (Chart 2 panel A). This transformation reflects the adoption of new general-purpose technologies following the ICT revolution (diffusion of computers, internet, and enterprise software). In addition, strong global competition forced the exit of less productive manufacturing firms in the UK and other advanced economies, and incentivised surviving firms to offshore their low-productive activities (this reduced the manufacturing sector’s share of employment in all G7 economies – Chart 2 panel B). Overall, the result was very high growth of labour productivity in both manufacturing and tech services, which lifted aggregate productivity growth.
Chart 2: The exceptional performance of the manufacturing sector in the decade before the GFC
Panel A: UK annual labour productivity growth (five-year moving average), 1970–2024
Panel B: Share of manufacturing in total employment, per cent
Note: Labour productivity is output per hour.
Sources: Authors’ calculations using ONS MFP 2025 release (panel A) and STAN 2025 release (panel B).
The decline in productivity growth from the mid-2000s
There are discussions as to when the productivity decline started, the latest evidence suggesting it started as early as the mid-2000s, before the GFC. This decline is common across all G7 economies, reflecting weak total factor productivity (TFP) more than weak capital deepening. The literature suggests it marks the end of the ICT revolution but also reflects the flattening of the gains from globalisation.
While a weakening of productivity growth could be expected after firms upgraded their production processes and productivity reached much higher levels, researchers have found the scale of this slowing puzzling given the continuing high investment in R&D in these sectors after the GFC (for example Lashkari and Pearce (2024) or Goldin et al (2024)). Some of the explanations proposed for the productivity slowdown in the US point to IT innovation leading to a decline in business dynamism, in particular in the manufacturing sector, and an increase in sales concentration among a few large firms; this high level of concentration discourages innovation and results in a slowdown in productivity growth over the long run. However, while the evidence on the decline in business dynamism is stark in the US, the evidence is more mixed across the Atlantic and in the UK in particular (for example Gutierrez and Piton (2020)), where productivity slowed down the most.
Even if productivity growth in manufacturing declined materially (‘within effect’), it was still above the average of the other sectors (Chart 2 panel A). However, the share of the manufacturing sector in GDP also declined substantially (‘between effect’). These two effects meant that the contribution of manufacturing to total economy productivity declined significantly. As a result, in accounting terms, manufacturing is the largest contributor to the productivity slowdown across most G7 economies (Chart 3 panel A).
Chart 3: The role of manufacturing in the UK productivity slowdown
Panel A: Total productivity slowdown (2010–19 versus 1998–07, per cent) and manufacturing sector contribution (within + between effects, percentage points)
Panel B: UK annual average productivity growth (market sector, per cent) and sector contributions (percentage points)
Sources: Authors’ calculations using STAN 2025 release (panel A) and ONS MFP 2025 release (panel B).
* US productivity data by industry in STAN starts in 1999. Panel A shows the contribution of manufacturing, both its ‘within’ and ‘between’ effects, to total economy productivity growth. Panel B shows within-industry contributions using the Tang-Wang methodology for market sector only. Productivity is output per hour.
Measured UK market-sector productivity growth was 0.3% per year on average over 2008–19, very weak both in absolute terms and relative to other G7 economies (Chart 1 and Table A). There is a large academic literature on the reasons for poor UK performance and still no consensus. We highlight two key drivers.
First, the role of manufacturing. Even though in the 1970s the UK had the largest manufacturing share among G7 countries, the size of the sector declined by more than peers and by the time of the GFC the manufacturing share was the lowest in the G7 group (Chart 2 panel B). A lower manufacturing share helps to explain the UK’s lower aggregate productivity growth, given that productivity is higher in manufacturing than in most other sectors.
Second, the UK has been affected by measurement issues that have depressed its measured productivity relative to peer countries. The publication of the ONS Bluebook 2021, which introduced important revisions to historical data, and most importantly ‘double deflation’, significantly reduced the measured UK productivity slowdown since the GFC, so the UK is within the G7 range now. And a revision to the measurement of hours worked, as the ONS moves from a ‘direct’ method to a ‘component’ method to minimise the bias from the secular decline in Labour Force Survey response rates, is likely to lead to further upward revisions to UK productivity growth when implemented – initial estimates suggest a +0.4 percentage points increase in the average annual growth rate over 2008–19.
Productivity developments since the Covid pandemic
Since the pandemic (2020–25), UK market-sector labour productivity has grown at an average of 0.7% per year, significantly lower than 2.2% in the US but slightly higher than the European average of 0.6% (Table A).
The recent supply shocks and data measurement issues challenge the interpretation of UK productivity trends as well as international comparisons in recent years. The pandemic drove large compositional effects, reflecting the fact that the sectors most hit by lockdowns were those with the lowest labour productivity. When focusing on ‘within-industry’ productivity growth, and so abstracting from these compositional effects, we can see that UK labour productivity growth was resilient through Covid and then started to decline in 2023 as the economy slowed down. The timing differs depending on the data source for the measure of hours, but all measures give similar average growth rates for UK productivity over the 2020–25 period.
Brexit has been a key headwind to UK productivity. The Bank of England’s central estimate is that Brexit will leave the level of potential productivity in the UK 3¼% lower than otherwise by the end of 2028, with the effect weighting on productivity growth in the transition to this lower level. There is however still a lot of uncertainty on the magnitude and timing of the Brexit impact. New research suggests larger impacts on trade in services than assumed so far. In any case, it’s likely that in the absence of Brexit UK productivity growth would have been materially higher than in euro area countries over the past six years.
What about the UK productivity level?
Comparing levels of labour productivity is a challenging task and relies on comparable measures of output, hours worked and price levels (comparisons are made in purchasing power parity, or ‘PPP’, terms to account for differences in the cost of living). The ONS publishes a range of estimates using different methods to compute hours worked to compare G7 economies, which suggests that in 2019 UK labour productivity was c.20% lower than US productivity.
Allas and Zenghelis (2025) link the low level of UK productivity relative to its leading peers to the cumulative effect of weak investment rates over several decades. Chart 6 panel A, shows that the UK business investment-to-GDP ratio has been lower than in other G7 economies since the turn of the century. The decline of the manufacturing share of the UK economy is a key reason for this – the UK investment-to-GDP ratio excluding manufacturing has been close to the US and G7 average (Chart 6 panel B). Some of the relative weakness in UK investment rates in other sectors could also be due to measurement issues, as the UK specialises in industries where intangible investment matters the most and these assets are harder to capture.
Chart 6: The role of manufacturing in the UK investment-to-GDP ratio
Panel A: Market sector investment share in GDP, 1995–2021
Sources: Authors’ calculations using EU KLEMS 2025 release.
Tech, the US exception and prospects for UK productivity growth
There’s an active debate on ‘Eurosclerosis’, pointing to the persistent gap in productivity growth between US and European countries in recent decades (Table A). It’s however unclear whether this has translated into a relative improvement in living standards for the US over this period.
The Draghi report on EU competitiveness (2024) highlighted this divergence in productivity growth pointing to the important role of the US tech sector. Indeed, Chart 7 shows that the contribution of IT and other information services (including AI companies) to total US productivity growth is larger than in European economies and the gap has been increasing. In the US, this sector is less than 4% of total output but has contributed 12% to total productivity growth in the last three years. While some of this could reflect early gains from AI, it also reflects strong automation/digitalisation investment following the pandemic. This dynamism in tech is also reflected in strong business creation in the US tech sector not seen in UK data.
Chart 7: Contribution of IT and other information services to total economy annual labour productivity (output per hour) growth, three-year moving averages, percentage points
Sources: Authors’ calculations using STAN 2025 release and ONS February 2026 productivity by division release for the UK.
* EU3 include France, Germany and Italy. IT and other information services correspond to sector J62_63.
Yet, the UK also has a strong tech sector. The contribution of IT and other information services to total economy annual labour productivity growth is larger in the UK than in other European economies (Chart 7), and the main contributor to UK productivity growth in the recent period (Chart 3 panel B). Cross-country evidence suggests that the UK is just behind the US in terms of AI adoption. There are reasons to think AI adoption may materially and persistently lift UK productivity growth, although the timing and magnitude of AI impacts are highly uncertain.
To conclude, while the slowdown in productivity growth in the past two decades was in large part driven by the end of the general-purpose ICT revolution, there is hope that recent developments in AI may mark the start of a new general-purpose revolution. This offers some optimism for the future of UK productivity, although there is still a lot of uncertainty on the nature and timing of the change that AI is going to bring.
Sophie Piton and Fabrizio Cadamagnani work in the Bank’s Structural Economics Division.
If you want to get in touch, please email us at bankunderground@bankofengland.co.uk or leave a comment below.
Comments will only appear once approved by a moderator, and are only published where a full name is supplied. Bank Underground is a blog for Bank of England staff to share views that challenge – or support – prevailing policy orthodoxies. The views expressed here are those of the authors, and are not necessarily those of the Bank of England, or its policy committees.
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When live events went virtual almost overnight, everyone had a hard deadline forcing the change. John Jantsch sits down with Blue Melnick, co-founder of Sage Event Management, to talk about a shift he thinks is bigger and quieter: AI moving into the coaching, consulting, and course world. Melnick’s take: the opportunity is using AI to get your clients better results, faster, versus just getting more done yourself.
The conversation digs into what Melnick calls the “moment of need.” That’s the 2 a.m. moment when a client’s brain is racing and the only person available is ChatGPT or Claude, not their coach. Melnick and John talk through why specialized knowledge still beats general AI. They dig into why the gap between teaching something and a client applying it is where most coaching programs lose people. They also talk about why courses built the old way (record a video, hope someone finishes it) are giving way to something better.
This one’s for coaches, consultants, agency owners, and course creators ready to put AI to work for their clients and open up a strong opportunity for their business.
Guest Bio
Blue Melnick runs Sage Event Management with his wife and business partner, Barry Baumgartner. Together they’ve produced live events for clients including Tony Robbins and ClickFunnels. Melnick and Baumgartner also run a coaching program built around launching high-ticket offers through virtual live events, and they’ve spent the past 2 years building Obi, an AI co-producer designed to guide clients through implementation instead of leaving them to figure it out on their own. Obi is set to launch publicly in September 2026.
Key Takeaways
AI’s shift for coaches and consultants isn’t a temporary disruption like the pandemic’s push to virtual events. AI isn’t going away, so plan for it as permanent.
The real leverage isn’t personal productivity: Most people ask what AI can do for them, the bigger opportunity is asking what you can do with AI for your clients.
People pay for specialized knowledge, not general information. AI chatbots offer general intelligence, but your years of specific expertise are still what clients are buying.
The gap between teaching a client something and that client implementing it is where most coaching programs and courses lose people. Use AI to walk clients across that gap instead of handing them information and hoping.
Build programs around the outcome, not around content volume.
Great Moments
[02:09] – Melnick traces the AI shift back to ChatGPT 3.5 and the early hype around “prompt cookbooks,” before people realized AI slop was a real problem.
[05:23] – Melnick tells the story of a former client bragging about vibe-coding a replacement for their CRM, and why he wants nothing to do with running that infrastructure himself.
[09:18] – Melnick riffs on AGI and the “Skynet” fear everyone jokes about, then points to the real opportunity: pairing specialized knowledge with AI.
[21:59] – Melnick shares research showing spending on education, free information online, and device access have all climbed together over the past 30 years.
[23:30] – Melnick announces Obi’s September 2026 launch and points listeners to changecourse.ai for Barry Baumgartner’s free training.
Memorable Quotes
“Just because you have a genius in your pocket doesn’t mean you know what to ask it.” —Blue Melnick
“The key to AI making a huge difference is seeing what I can do with AI for my clients, not what AI can do for me.” —Blue Melnick
“The desire for knowledge, the desire for people to take you through a specific journey never changes. What changes is the delivery mechanism.” —Blue Melnick
“When people get a result, they don’t ask for a refund.” —Blue Melnick
Resources
AI, artificial intelligence, client results, Coaching, coaching industry, consulting, course creators, Marketing, online courses, Small Business
Foster parents take on work the state would otherwise have to pay for, and a lot of them are doing it while still carrying student debt. So the question comes up constantly: is there a student loan forgiveness program for foster parents?
The honest answer is no. There is no federal program that forgives student loans because you are a licensed foster parent. There never has been. Federal Student Aid’s full list of forgiveness and discharge options has no foster care category, and the state programs that use the words “foster care” are almost always aimed at people who were in foster care as children — not the adults raising them.
What does exist is a set of programs you can qualify for through your job, your tax return, and the repayment plan you choose. Several of those changed in a big way on July 1, 2026, so anything you read about this before then is out of date.
Here is what actually applies.
Table of Contents
Public Service Forgiveness Program
Federal Perkins Loan Cancellation
Direct Loan and FFEL Program Loan Forgiveness
Repayment Programs Based On Your Income
Closing Thoughts
Public Service Forgiveness Program
PSLF is the biggest one, and it is employment-based, not fostering-based. If you work for a state or county child welfare agency, a 501(c)(3) foster care or family services agency, a school district, or any other government or qualifying nonprofit employer, you can have your remaining Direct Loans forgiven after 120 qualifying payments.
Other qualifications for becoming eligible for the PSLF are :
Full-time employment with a qualifying employer
PSLF only applies to Direct Loans but not lona programs like the Perkins Loan unless you consolidate them into a Direct Consolidation Loan
On-time payments made on or no later than 15 days after the payment due date each month
The 120 qualifying payments do not have to be consecutive – an example would be if you were at one point working for an organization that was not considered a qualifying employer. You however need to reach 120 qualifying payments with a qualifying employer to be eligible.
If you think this is a program that would benefit you, you should fill out this form to determine your eligibility
Federal Perkins Loan Cancellation
If you don’t qualify for the PSLF, another program you can take advantage of is the Federal Perkins Loan Cancellation.
This program was designed to ease the burden of student loan repayments on public servants. If you work in any of the following public service positions, you could qualify for the Federal Perkins Loan Cancellation program.
Firefighter
Faculty member in a tribal college or university
Librarian with a master’s degree in library science at a school that qualifies for Title 1 funding or a public library
Teacher – special education teachers, math/science teachers, bilingual teachers or teachers in fields where there is a shortage and teachers who teach disabled children in a public schools
Speech Pathologists with a master’s degree working in a Title 1-eligible school
Medical Technician
Full-time emoyee of eligible public or private nonprofit child or family service agency which directly provides services to high-risk children (people under the age of 21 who have suffered emotional or physical abuse/neglect or children with severe mental or behavioral disturbances) from low-income families or communities
Full-time staff member in a pre-kindergarten or child-care program, or in the educational part of a preschool program carried out under the Head Start Act
Police/Corrections Officer
Member of the Peace Corps/Americorps/VISTA programs
United States Armed Forces
Under the Federal Perkins Loan Cancellation program, as long as you qualify, up to 100% of your loan can be cancelled over a period of 5 years.
The catch to this program is that the college you attended is the entity that deems you eligible to receive the benefit.
To find out more information about how to get the process started with this program in particular, we highly recommend you call or visit your school’s bursar’s office or the financial aid office.
Loan repayment programs for child welfare and behavioral health work
A lot of foster parents also work in social services. If that is you, state and federal loan repayment programs are usually worth more per year than anything else on this list.
The National Health Service Corps covers behavioral health clinicians — LCSWs, licensed professional counselors, psychologists, and marriage and family therapists. Full-time behavioral health awards run up to $50,000 for a two-year commitment at an approved site. The Substance Use Disorder Workforce program pays up to $75,000 for three years, and the Rural Community version pays up to $100,000. The 2026 cycles have closed, but the programs are active — watch for the next application window.
State programs vary widely:
Program
Award
New York Child Welfare Worker Loan Forgiveness
Up to $10,000/yr, $50,000 max over 5 years (currently closed)
Maryland Janet L. Hoffman LARP
$1,500–$10,000/yr by debt level (open through March 1, 2027)
Texas Mental Health Professionals LRP
Up to $80,000–$100,000 over 3 years for LCSWs, LPCs, LMFTs
Illinois Community Behavioral Health Professional LRP
$4,000–$40,000/yr by credential
Check your own state’s programs — most states run something, and many are funded through HRSA’s State Loan Repayment Program match.
If you are still in school for social work, roughly 35 states run Title IV-E child welfare education stipend programs that pay tuition up front in exchange for a year of public child welfare employment per year of support. That beats borrowing and forgiving later.
Repayment Programs Based On Your Income
Now let’s take a look at loan repayment programs that work with your income. While these are not forgiveness programs, they can provide you some financial relief.
Two things work in your favor here.
First, foster care maintenance payments are generally excluded from gross income under IRC §131. They do not show up in your AGI, which means they do not raise your income-driven payment. The stipend supports the child without inflating what you owe on your loans.
Second, RAP reduces your payment by $50 per month for each dependent you claim on your federal return. A foster child placed with you by an agency or court order can meet the qualifying child relationship test under IRS Publication 501 if the age, residency, and support tests are also met.
Family size for IBR is messier. The rule counts other individuals living with you who receive more than half their support from you — and because the state stipend is designed to cover that support, whether a foster child clears the threshold depends on your actual numbers. Keep records of what you spend beyond the stipend.
Repayment Assistance Plans
Payments are 1-10% of your adjusted gross income
Payments are adjusted based on income changes
You can receive this benefit for up to 30 years
Principal reduction subsidy and unpaid interest waiver
Pay As You Earn (PAYE) – Ending 2028
Payments are 10% of your monthly discretionary income
Payments are adjusted based on income changes
You can receive this benefit for up to 20 years
Applies to Direct loans, Direct PLUS loans made to students and Direct Consolidation loans that do not include Direct or FFEL loans made to parents
Income-based Repayment (IBR)
Payments are 15% of your monthly discretionary income
Payments are adjusted based on income changes
You can receive this benefit for up to 25 years
Applies to Direct loans, Federal Stafford loans, all PLUS loans made to students and Direct Consolidation loans that do not include Direct or FFEL loans made to parents
Income-contingent Repayment (ICR) – Ending 2028
Payments are 20% of your monthly discretionary income
Payments are adjusted based on income changes
You can receive this benefit for up to 25 years
Applies to Direct loans, Direct PLUS loans made to students and Direct Consolisation loans (Direct Consolidation loans given to parents may be eligible under this program)
Standard Repayment Plan
Payments are fixed at $50 per month
You can receive this benefit for up to 10 years
The great advantage of this program is that you will pay less interest over time as compared to the other programs described above
Applies to Direct loans, Federal Stafford loans, all PLUS loans and Consolidated loans (Direct and FFEL)
Two More Places To Find Money
Ask your employer. The $5,250 annual tax-free employer student loan benefit became permanent under OBBBA and starts adjusting for inflation after 2026. Plenty of child welfare agencies, hospitals, and school districts already have a Section 127 plan and never mention it. The loan has to be yours, not a Parent PLUS loan you took for a child.
If you adopt from foster care, the adoption tax credit is worth $17,670 per child in 2026, with up to $5,120 of it refundable — new under OBBBA, so it pays out even if you owe no tax. Most children adopted from U.S. foster care carry a special needs determination, which means you claim the full credit whether or not you had any adoption expenses. Details are on the IRS adoption credit page.
FAQs
Is there student loan forgiveness for foster parents?
No. No federal program forgives student loans based on being a foster parent. You qualify through your employer, your repayment plan, or the tax code.
Do foster care payments count as income for student loan payments?
Generally no. Payments made under a state foster care program are excluded from gross income under IRC §131, so they do not appear in your AGI or raise your income-driven payment.
Can I count a foster child as a dependent for repayment purposes?
Under RAP, dependents claimed on your federal return each reduce your payment by $50 per month. Under IBR, the test is whether the child receives more than half their support from you, which is fact-specific when a state stipend is involved.
What if I work for a foster care agency?
Then you likely qualify for PSLF, and possibly Perkins cancellation if you still hold a Perkins Loan. Submit an employer certification form and confirm your payment count.
What happened to the SAVE plan?
It ended. Borrowers are being moved off in batches with at least 90 days’ notice. If you do not choose a plan, you get placed in a Standard plan that may not count toward PSLF.
Bottom Line
There is no shortcut for foster parents, and pretending otherwise wastes your time. The money is in three places: the job you hold, the repayment plan you pick, and the tax return you file. Foster care stipends staying out of your AGI is a real advantage. So is the $50-per-dependent reduction under RAP, and the refundable adoption credit if you adopt.
If you work in child welfare in any capacity, start with PSLF and your state’s loan repayment program. That combination is worth more than everything else on this page.
Are you a foster parent ? How have you tackled your student loans? I would love to hear about your experiences in the comments.
Editor: Clint Proctor
Reviewed by: Claire Tak
The post Student Loan Forgiveness For Foster Parents appeared first on The College Investor.
GalaxyOne has launched a very generous limited-time signup offer that effectively gives new customers a 10% bonus on a $10,000 deposit.
New customers who open a qualifying GalaxyOne personal account between August 17 and August 31, 2026 can earn a $1,000 cash bonus after depositing at least $10,000 in new money. Both cash and crypto deposits can qualify.
How to Earn the $1,000 Bonus
To qualify:
Open a new GalaxyOne account by August 31, 2026
Enter promo code AUGUST1000 when signing up
Deposit at least $10,000 in cash or crypto within 30 days
Maintain at least $10,000 in qualifying net deposits for 120 consecutive days
Keep the account open and in good standing through the bonus payout
The $1,000 bonus will be deposited into your GalaxyOne Cash account within 30 days after completing the 120-day maintenance period.
Are You Eligible?
The promotion is for new GalaxyOne customers who are U.S. residents and at least 18 years old. It’s limited to one promotional credit per person and applies to personal accounts, not business accounts.
GalaxyOne combines several financial products in one platform, including a cash account currently paying 3.50% APY, brokerage accounts with commission-free U.S. stock and ETF trading, and crypto trading. Cash deposits are held at Cross River Bank and are FDIC insured up to applicable limits.
Guru’s Wrap-up
This is a pretty good bonus, although not as good as the $3,000 bonus they briefly offered for the same requirements as reported by DoC. You’re getting $1,000 for tying up $10,000 for roughly four months, plus whatever interest you earn during that time.
