Current State of UK Economy

The most important statistics

• Inflation 3%
• Economic Growth 2.5%
• Unemployment 5.3%
• Interest Rates 5%
• Current Account deficit 4.2%
• Government borrowing 2.8%

• These statistics taken from National Statistics online. [link]
• Note many forecast a deterioration in these statistics. Some statistics take a while to get updated.

Inflation Figures

• CPI Inflation – 3%
• RPI inflation – 4.2%
• note CPI inflation is the official method it excludes housing costs and taxes.
• Inflation at National Statistics

GDP and Economic Growth

• GDP Growth in last quarter Q1 2008 – 0.4%
• Annual Rate of growth in past 12 months – 2.5%
• This is very close to the long run trend rate of growth
• GDP at National Statistics

Interest Rates

• Base Rates are currently 5%. They have been reduced from 5.5% since start of year
• Bank of England interest rate decisions link here
• Forecasts for interest rates 2008/09

Balance of Payments

• Current account deficit in last quarter of 2007 was £8.5bn or 2% of GDP, lower than Q3 where deficit was 5.5% of GDP
• Total current account deficit for last year was £57.8 bn or 4.2% of GDP
• Current account deficit for 2006 was £50.7bn or 3.8% of GDP

Government Debt

• Government deficit (the amount government spending greater than tax) was £39.4bn or 2.8% of GDP
• Total National Debt was £618.8 billion, equivalent to 43.8 per cent of GDP.

Unemployment

• Unemployment in UK has increased to 5.3% in May or 1.64 million (Labour Force Survey)
• The Claimant Count method suggests 819,300 in May 2008 were unemployed up on April, but down 58,100 on last year