UK Macroeconomy Stats 2019 Flashcards
Annual Growth Rate in 2018
Only 1.4%; lowest annual growth rate since the last recession (impact of Brexit on the economy)
Quarterly Growth Rate in Last Quarter of 2018
Only 0.2% (very close the recession territory as a result of Brexit slowing down the economy)
Long Term Growth Rate
Since the Financial Crisis, long-term growth rates are around 1.5%.
Because of this, we are now experiencing a positive output gap of an estimated rate of 0.2% of GDP (Impact of Financial Crisis)
Growth Forecast of 2019
Only 1.2% because this is the year that we are officially leaving the EU and the uncertainty of Brexit is having a considerable impact on growth
Real GDP per Capita
£29,000
Total GDP
£2 trillion
GDP Composition
79% Services
14% Manufacturing
6% Construction
1% Agriculture
Heavy dependence on legal, financial, education services which are a key component of the UK economy
Asymmetric growth and unbalanced economy which requires improvement
Unemployment Rate
Lowest unemployment rate (3.9%) since 1975
NRU
4%; below NRU means that we are in a small positive output gap, and so the labour market is very tight.
Long-term Unemployment
Very low at 1.1%
Comment on Wage Growth and Inflation
Wage growth (3.4%) is faster than inflation (1.9%), rising real wages, to be expected when labour market is very tight and unemployment is very low.
High wage bargaining
More real disposable incomes for workers
Consumer Confidence
Since January 2019, consumer confidence has been very weak due to the Brexit mess and surrounding uncertainty.
Unknown future, job prospect, or future unemployment rates
Consumers are very concerned about the impact of Brexit on them and their personal finances
CPI Inflation
1.9%; very close to 2% target
Producer Price Inflation
2.4%; price rises of good as they leave the factory
CPI inflation is likely to rise in the future.
Budget Deficit
2% of GDP: when Austerity started in 2010, budget deficit was very high and has now fallen dramatically
Budget Deficit Forecast
Fall to 0.8% by 2023
National Debt
83% of GDP; forecast to fall to 74% by 2023.
Bond Yields
1%; meaning that it is cheap for the government to borrow
Corporation Tax
19% (down from 28% in 2010); however other countries have reduced it also.
Interest Base Rate
0.75% (Very low)
Business Confidence
Very weak since Brexit vote
Most Recent QE
August 2016; £60bn to stave off a recession after the Brexit vote
Total QE
£435bn
Willingness to Lend
Very poor, banks are very concerned about risky lending, especially to small and medium enterprises.
