Case Study - UK Developed Country 2023 - Theme 4 Economics

Question 1

UK Annual Growth

Answer 1

7.6% 2021 vs 4.1% 2022

Question 2

UK Current Quarterly Growth

Answer 2

0.1% (Q4 2022)

Question 3

Annual Growth Forecast

Answer 3

-0.2% (2023) due to high cost of living, driven by high oil prices and other supply-side shocks; partnered with contractionary demand-side policies and low consumer confidence.

Question 4

Output Gap

Answer 4

-1.6% (Q3 2023 OBR)

Question 5

GDP per capita

Answer 5

£33,000

Question 6

Total GDP

Answer 6

$2.4 trillion - Services 79%, Manufacturing 14%, Construction 6% and Agriculture 1%

Question 7

Unemployment Rate

Answer 7

3.8%

Question 8

Employment Rate

Answer 8

75.8%

Question 9

Economic Inactivity Rate

Answer 9

21.4% - mainly driven by old people not willing to return to work after COVID.

Question 10

Youth Unemployment

Answer 10

10.8%

Question 11

Long Term Unemployment

Answer 11

1%

Question 12

Wage Growth

Answer 12

6.6% - healthy, H/E still below the current rate of inflation

Question 13

Consumer Confidence

Answer 13

Very low

Question 14

Job Vacancies

Answer 14

Record high but falling

Question 15

Inflation rate (CPI)

Answer 15

10.1% - driven by strong wage growth and weak pound, high fuel and food prices

Question 16

Core Inflation

Answer 16

6.2% - CPI but taking out food and energy from the basket

Question 17

Producer Price Inflation

Answer 17

8.7% - Change in price of a basket of goods as they have been manufactured, wholesale price inflation, one stage before retail price inflation. Indicator for future CPI Inflation Rate

Question 18

Inflation Expectations

Answer 18

5.4%

Question 19

Wage Growth

Answer 19

6.6%

Question 20

Food price inflation

Answer 20

19.1%

Question 21

Current Account Deficit

Answer 21

3.3% GDP

Question 22

Productivity and Investment

Answer 22

Very POOR

Question 23

Exchange Rate

Answer 23

WEAK £ - £1 - $1.24 and £1 - EUR1.12

Question 24

Minimum Wage

Answer 24

£10.42/hour

Question 25

US and Eurozone

Answer 25

Slow Growth

Question 26

Budget Deficit

Answer 26

6.1% GDP 2022-23

It was 14.5% GDP in 2020-21, which was the highest budget deficit since WW2. Prior to COVID, it was around 2%.

Question 27

National Debt

Answer 27

100% GDP

Question 28

Bond Yields (cost of borrowing)

Answer 28

3.46% - more expensive for the government to service their debt

Question 29

Income Tax Bands

Answer 29

0% up to £12,570, 20%, 40%, 45% (Frozen to 2028)

Question 30

Corporation Tax

Answer 30

25% (up from 19%)

Question 31

VAT

Answer 31

20%

Question 32

Gini Coefficient

Answer 32

0.343

Question 33

BoE Base Rate

Answer 33

4.25%

Question 34

Average Lending Rate

Answer 34

5.25%

Question 35

Bank Willingness to Lend

Answer 35

GOOD

Question 36

Consumer and Business Confidence

Answer 36

VERY LOW

Question 37

Savings Ratio

Answer 37

9.3%

Question 38

QE

Answer 38

Total £895bn (£450bn 2020)