Macro application Flashcards
UK growth rate (2023)
0.1%
Annual UK growth forecast for 2024
0.8%
Uk output gap
-0.1%
GDP per capita
£36,000
Total GDP
£2.53 trillion
Unemployment rate
4.2%
Employment rate
74.5%
Economic inactivity rate
22.2%
Breakdown of uk gdp
79% in services
14% in manufacturing
6% in construction
1% in agriculture
Wage growth in the UK? Why?
5.6% (positive in real terms). This is because of the inflation but also because of rising labour inactivity in the UK meaning that those in work have more bargaining power as these firms are struggling to hire workers.
Is unemployment rising or falling
Rising
Is our rate of unemployment above or below the natural rate of unemployment? What does this suggest?
It is above the natural rate of 3.5% which suggests cyclical unemployment.
Why shouldn’t we trust these unemployment rates.
It was a dodgy labour force survey (LFS) which only looked at 15,000 people. Usually should be at least 100,000 people. We need to move to a more technically advanced LFS.
Youth unemployment
11%
What is the consumer confidence like right now
Very weak
-cost of living crisis
-worry about job security
-very high inflation
Currently have very weak retail sales, move from luxury to normal (income elasticity of demand)
Why is this real wage growth a bad thing for the economy?
High wage growth will mean high underlying demand for goods and higher costs of production for firms who will then pass that onto the consumer via higher prices.
What is happening to job vacancies right now?
The number is falling, the labour market is becoming looser.
What is the target CPI rate of inflation.
2% +/- 1
What is the current rate of CPI inflation
3.2%
Is inflation going up or down currently
Going down
What did inflation peak at in October 2022?
11.1%
What is the producer price inflation (PPI)?
0.6%, very good as it is an indicator for future CPI falling. (It is the cost of a basket of goods that producers use to produce goods)
What is the current account deficit?
3.2%
What is the national minimum living wage?
£11.44 /hour
What is causing the current account deficit.
There are underlying factors which keep this deficit high, these factors are structural weaknesses or supply side drivers of very poor competitiveness in the uk economy.
Is productivity and investment good or bad at the moment.
It is very poor.
Is the exchange rate strong or weak
Weak from £1=$1.60 pre brexit to £1=$1.24 now
What is the budget deficit (2023-2024)
4.2% GDP
What is the uk national debt.
98% of GDP
What is the UK gini coefficient?
0.357 (has risen over last couple of years)
What is the BoE base rate?
5.25%
What is the average lending rate?
6.25%
Do banks have a good or bad willingness to lend?
Good
What is the savings ratio?
10.5%
How much qualitative easing has been released into the UK economy?
£895bn
