History of UK Housing

History of UK Housing

A look at the major trends in UK housing in the past century, including the trends on housing tenure, house prices and the supply of new houses. Victorian housing The Industrial revolution saw rapid growth in inner cities as people flocked to the city for new factory jobs. This accommodation was often hurriedly built by private enterprise and was often  squalid, with large factory populations squeezed into small areas, leading to the classical slums of ‘Dickensian’ Britain.

Consequences of generation rent

Consequences of generation rent

Generation rent is a term to describe how many young people are unable to buy a house, but need to privately rent. Since 1993, house prices have risen significantly faster than incomes, making a mortgage out of reach for many people under the age of 30. Rising ratios of house price to earnings for first time buyers (FTB). The UK has one of the most expensive housing markets…

placeholder

Factors that affect foreign direct investment (FDI)

Readers Question: why some countries are more successful in attracting Foreign Direct Investment than others? Foreign direct investment (FDI) means companies purchase capital and invest in a foreign country. For example, if a US multinational, such as Nike built a factory for making trainers in Pakistan; this would count as foreign direct investment. Factors affecting foreign direct investment 1. Wage rates A major incentive for a multinational to invest abroad is to outsource labour intensive production to countries with lower wages. If average wages in the US are $15 an hour, but…

UK post-war economic boom and reduction in debt

UK post-war economic boom and reduction in debt

Readers Question: What caused the massive decrease in the debt to GDP ratio for the UK following World War II? It is a good question to ask. In the past few years, many European policy makers have felt that rising debt levels needed panic levels of austerity / spending cuts. But, that didn’t happen in the UK in the post war period. Summary UK national debt peaked in the late 1940s at over 230% of GDP. From the early 1950s to early 1990s, we…

Who does the UK owe money to?

Who does the UK owe money to?

Readers Question: Who exactly is the UK is in Debt to? please can you simplify and explain. There are two types of debt: Government debt (Public sector debt / National debt) – The money the government has borrowed External debt. Liabilities the UK owe to the rest of the world – this is both private sector and public sector Who does the government borrow from? The UK government borrows mainly from UK pension funds / insurance companies (29%) Private corporations / other financial institutions UK building societies. (e.g. building societies buy government gilts to invest…

Problems facing global economy

Problems facing global economy

The global economy faces many difficulties, both short term and long term. In the short term, the global economy risks a prolonged period of sluggish growth, which will lead to problems such as high unemployment, debt default and low investment. In the longer term, the global economy faces greater threats from the environment, demographic changes and problems of resource scarcity. Short term problems facing global economy in 2016 Deflation / low inflation Japan was the first major economy to face a prolonged period of deflation – it led to a period of…

public-sector-debt-ons

UK National Debt

The UK national debt is the total amount of money the British government owes to the private sector and other purchasers of UK gilts. In Dec 2015, Public sector net debt (ex. public sector banks) was £1,542.6 billion, equivalent to 81% of GDP Source: (page updated Jan 22nd 2016) ONS Datasets | Long run fiscal indicators PSA5A at ONS | Budget deficit – annual borrowing This is the amount the government has to borrow per year. In…

Are falling oil prices good for the economy?

Are falling oil prices good for the economy?

In recent months, we have seen a dramatic drop in oil prices. For many consumers and business this fall in the price of oil will be welcome reduction in the cost of living and a reduction in the cost of business. However, is such a steep fall in oil prices good for the economy? Benefits of falling oil prices In normal economic circumstances, a fall in the oil price can help the economy. Lower oil prices reduce cost of transport and…