EconPlusDaddy Macro A* notes Flashcards
Is the UK Stagnating?
Yes
What is the UK’s GDP
2.5tn
What is the UK’s composition in terms of what they make
79% Services, 14% manuefacturing, 6% construction
Unemployment rate?
4.2%
Economic inactivity rate?
22.2% which is a result of many 50s and 60s retiring early
Wage growth has been driven up by what?
Economic inactivity that has lead to the labour market tightening, giving more wage power as they gain greater bargaining power.
Consumer confidence levels?
Horrible, high IR, high tax, low house prices rise, low FDi
Core inflation rate is what? and what is the level and why is it higher than inflation
Core inflation removes volatile goods from the CPI index which leads to an assessment of true inflation rate which is 4.2% compared to 3.2% as of now - showing inflation is still fairly high
Why has a depreciated exchange rate not influenced the UK to become more competitive?
The UK service sector is very inelastic and overall lacks the response in global demand when it gets cheaper so therefore makes no difference and only imports get more expensive
What is demand like for UK goods?
In America it is alright, the Europe is having stagnation too and they are not buying Uk goods
Budget deficit?
4.2% of GDP which is government borrowing and due to covid, this is very high
Income tax rates?
They are frozen until 2029, which means as wage growth continues to rise it is very likely that there will be huge amounts of fiscal drag in the economy.
National insurance levels?
Cut to 8%
Interest rates?
5.25% with speculation it will go further down, but high savings ratio of 10.5% since high IR. High interest rates show a lack of confidence.
QE is at £895bn pumped into the system.
