Quizzes & Activities

UK Economy Macro Context (June 2018)

A Level, IB
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Last updated 6 Jun 2018

Here are thirty pieces of applied evidence on the UK economy and a Quizlet activity if you want to test yourself in flashcard format and other quizzes! Great for Paper 2 preparation.

UK Macro Context (June 2018)

Unemployment Rate
4.2% of the labour force (lowest unemployment for 45 years)

CPI inflation rate
2.4% - disinflation occurring as the impact of a weaker pound now falls out of calculation

Government Debt to GDP
85.3% of GDP - debt ratio now stabilising as fiscal deficit comes down

Monetary policy interest rate
0.5% - BoE expected to raise rates but only very gradually later on in 2018

Part-time employment
8.6 million - rising due to flexible labour market + high under-employment

Youth unemployment
12.1% of young people aged 16-24. Falling from 20% five years ago

UK-EU Trade Flows
EU accounted for 44% of UK exports of and 53% of imports in 2017.

Household debt
133% of household income in 2017, peaked at 145% in 2008

Gini coefficient
Gini coefficient measured at 0.35 in 2016

Oil prices
$145/barrel in 2008 but just $30/barrel in 2014. Reached $80/barrel in May 2018 for first time since late 2014.

House prices
Prices rose 4% in 2017 - market now slowing - prospect of mortgages rates increasing + affordability issues

Regional house prices
Average price highest in London at £472,000. Lowest prices are in North East £124,000 respectively.

Trade in goods and services
Deficit of £136 billion on trade in goods and a surplus of £107 billion on trade in services in 2017. Overall trade deficit was £29 billion in 2017

Current account balance
Current account deficit was at a record high of 5.6% in GDP in 2016 but then dropped to 4.1% in 2017.

Zero hours contracts
901,000 people were on zero-hours contracts in their main job in 2017, this is 2.8% of all people in employment.

Government borrowing (fiscal deficit)
Fiscal deficit in 2017-18 was £40 billion r 2% of GDP, down from peak of 9.9% of GDP (£153bn) in 2009-10 during the recession

Productivity gap
In 2016, ranked on GDP per hour worked, the UK came fifth out of G7 countries, with Germany top and Japan bottom

Economic growth
UK GDP estimated to have grown by 1.8% in 2017, following growth of 1.9% in 2016.

Estimated NAIRU for UK (according to BoE) is now 4.5% of labour force (down from 5.5% previous estimate)

Maths Rankings for UK students
UK ranked 22nd out of 36 advanced countries

Long term unemployment rate
1.1% of labour force - steep fall suggesting a reduction in structural unemployment levels

Productivity slowdown
UK labour productivity in 2017 was only 1.8% above what it was 10 years earlier in 2007 (pre-recession peak level).

Quantitative easing (QE)
QE totals £445 billion of assets, £435 billion of which are government bonds and £10 billion of commercial debt.

Mortgage interest rates
These remain low. - average Standard Variable Rate is 4.2%, average 2-year fixed rate was 1.5%

Competitiveness ranking
8th in 2018 out of 137 countries, ranked 11th for infrastructure and 13th for innovation

Human Development Index ranking
16th in 2017, GNI per capita of $37,931 (PPP)

Household savings ratio
5.3% of disposable income - very low due to negative real returns for savers and rising household fuel/food bills

Corporation Tax Rate
19 per cent corporation tax due to fall to 18 per cent in April 2020

Research and development spending
£33billion in 2016 which is 1.7% of GDP. Government has target to raise to 2% of GDP.

UK GDP by sector (value added by each sector)
Agriculture: 0.6%
Industry: 19.2%
Services: 80.2%

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