Newly published and revised figures for growth in the UK economy show that output fell by 0.3% in the final three months of 2011, and that, over the year as a whole, real GDP in Britain climbed by a paltry 0.7% during the year as a whole. To put that into context, the crisis-ridden Euro Zone achieved growth of double that largely because of a strong performance from Germany.
Output in the UK remains well below the peak before recession engulfed the economy in the autumn of 2008. In the charts and links below we track some of the key economic indicators as the country stuggles to achieve a durable and resilient / robust upturn.
Comment and Analysis News Articles
Larry Elliott (Guardian): Technical recession or not, the UK economy is sick
Jeremy Warner (Telegraph): Britain struggles to kick its addiction to consumption
Context matters a lot if you want to develop strong evaluation marks in your exam answers: Here is some context on recent developments in the UK
1. Volatility: The British economy along with many others has seen a significant increase in economic volatility in recent years for example volatility in GDP growth, inflation and asset prices
2. Output: Britain suffered a deep recession in 2009 with a 4.4% contraction of real GDP and a cumulative fall of national output of over 6%
3. Recovery: Recovery since the recession ended has been slow and fragile with growth of less than 2% in 2010-11. Fears of a double-dip recession have grown with the crisis in the Euro Zone area although there are signs that the worst of the financial crisis in Europe may be over (for the moment!)
4. Prices: Consumer price inflation has been persistently above the 2% target in much of the last four years and averaged 4.5% in 2011 (more than twice the official target). UK inflation has averaged 3.5% since 2008.
5. Jobs: Unemployment continues to rise. In February 2011 it was just under 2.7 million (or 8.8% of the labour force) although many economists believe the true scale of unemployment is much higher
6. Monetary policy: Policy interest rates have remained at 0.5% March 2009 and during this time the Bank of England has introduced and expanded a policy of quantitative easing (QE)
7. External environment: The world economy has recovered quite strongly from the 2009 downturn in output and trade. But there are widening imbalances in performance, for example the striking contrast between fast-growing countries (including the BRIC and MIST countries) and slower-growing nations that appear to be in semi-permanent recession (such as the PIIGS).
BRICs: Brazil, Russia, India and China
MIST: Mexico, Indonesia, South Korea and Turkey
PIIGS: Portugal, Italy, Ireland, Greece and Spain
Growth 8 Countries – Brazil, China, India, Indonesia, Korea, Mexico, Russia and Turkey