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How deep is the UK's economic crisis? Six charts to help students understand what is really going on

Graham Watson

11th July 2022

This is macroeconomic gold dust for students and teachers! The Guardian provides a helpful series of charts highlighting six key problems facing the UK economy.

Click on this link for the Guardian article

It's quite a roll call: inflation, GDP, tax burden, trade, labour supply and low research and development are all issues that need addressing. So nothing serious then - just a catalogue of significant supply-side problems that have been with us for many, many years.

The tax burden is one of the most pressing issues of the age.

In the recent past, the tax burden has increased by 3% of GDP to fund a 2% of GDP increase in public spending.

Factor in an ageing population - who are politically influential - and a shrinking workforce, and a declining tax base and rising number of dependents means that perhaps it might be time we confronted what I've always thought the biggest structural challenge of my lifetime is.

In a related article here, Phillip Inman suggests that the lack of business investment means that it's "Back to The Future" with the prospect of a re-run of the 1970s likely as a result of the lack of investment. And unlike the 1970s, the changes in industrial structure and weakening of the trade unions, are likely to mean that the distributional impact of this is likely to fall more heavily on workers than previously.

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Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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