Case Study - UK Developed Country 2023 - Theme 4 Economics Flashcards
UK Annual Growth
7.6% 2021 vs 4.1% 2022
UK Current Quarterly Growth
0.1% (Q4 2022)
Annual Growth Forecast
-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.
Output Gap
-1.6% (Q3 2023 OBR)
GDP per capita
£33,000
Total GDP
$2.4 trillion - Services 79%, Manufacturing 14%, Construction 6% and Agriculture 1%
Unemployment Rate
3.8%
Employment Rate
75.8%
Economic Inactivity Rate
21.4% - mainly driven by old people not willing to return to work after COVID.
Youth Unemployment
10.8%
Long Term Unemployment
1%
Wage Growth
6.6% - healthy, H/E still below the current rate of inflation
Consumer Confidence
Very low
Job Vacancies
Record high but falling
Inflation rate (CPI)
10.1% - driven by strong wage growth and weak pound, high fuel and food prices
Core Inflation
6.2% - CPI but taking out food and energy from the basket
Producer Price Inflation
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
Inflation Expectations
5.4%
Wage Growth
6.6%
Food price inflation
19.1%
Current Account Deficit
3.3% GDP
Productivity and Investment
Very POOR
Exchange Rate
WEAK £ - £1 - $1.24 and £1 - EUR1.12
Minimum Wage
£10.42/hour
US and Eurozone
Slow Growth
Budget Deficit
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%.
National Debt
100% GDP
Bond Yields (cost of borrowing)
3.46% - more expensive for the government to service their debt
Income Tax Bands
0% up to £12,570, 20%, 40%, 45% (Frozen to 2028)
Corporation Tax
25% (up from 19%)
VAT
20%
Gini Coefficient
0.343
BoE Base Rate
4.25%
Average Lending Rate
5.25%
Bank Willingness to Lend
GOOD
Consumer and Business Confidence
VERY LOW
Savings Ratio
9.3%
QE
Total £895bn (£450bn 2020)