Topic updates
UK Economy - Why low business investment matters
11th September 2022
A recent chart in the Financial Times showed UK business investment staying low in real terms and lagging well behind the trend growth from 2009 through to 2016.
Investment is spending on new capital goods. Examples include new machinery and buildings, hardware and software.
- Weak investment means that businesses are working with an older capital stock
- Older capital tends to depreciate more quickly and can break down / slowdown
- Low investment can then hit the growth of labour productivity / efficiency
- Low investment limits the productive capacity of UK export businesses
- The effect is slower growth both through weaker aggregate demand and the impact on long run aggregate supply
You might also like
Slowing German economy must raise investment
19th October 2014
Four facts about UK manufacturing industry
22nd October 2014
Growth and Development in the Ivory Coast
20th October 2014
Immigration and the UK Economy
19th October 2014
Twin Peaks for the UK Economy
19th October 2014
Bank of England Chief Economist on the Real Economy
19th October 2014
Growth and Development in Ethiopia
17th October 2014
Do interest rates affect business investment?
17th October 2014