UK Devaluation of Sterling 1967

UK Devaluation of Sterling 1967

In 1967, the UK government of Harold Wilson devalued the Pound from $2.80 to $2.40 (a devaluation of 14%). It was a major political event because the government had tried hard to avoid a devaluation, but felt forced into the decision because of a trade deficit, a weak domestic economy and external pressures from creditors. Background to devaluation of 1967 The government pursued an exchange rate peg of £1 to $2.80. A strong Pound was seen as important for maintaining living standards and providing an incentive for manufacturers to increase productivity…

UK Economic History

UK Economic History

A look at different aspects of UK economic history, concentrating on the different decades of the Twenty and Twenty-First Century. Includes histories of particular sectors, such as housing and the coal industry. The economy of the 1920s – a legacy of war debt, deflation and life under the gold standard The economy of the 1930s – the economics of mass unemployment, but also economic recovery and growth of surburbia. Post War Economy 1940s and 1950s – Austerity, rationing, war debt, but full employment, new welfare state and…

Growth in self-employed contractors

Growth in self-employed contractors

In recent years, the UK has seen a more flexible labour market. One phenomena is the growth in self-employed contractors. This category of workers have different rights to employees. Self-employment can be attractive to workers seeking greater flexibility. But, there is also concern firms are using the categorisation of  self-employment as a bogus method to pay their workers lower wages, reduce rights to sick pay and avoid the need to employ for fixed numbers of hours per week. Levels of self-employment in UK

Will economic recovery lead to inflation?

Will economic recovery lead to inflation?

Readers question: Will a sustained recovery in the UK lead to inflation? A sustained economic recovery could lead to inflation. If economic growth is above the long run trend rate for a prolonged period, if demand grows faster than productivity, then in that scenario we are likely to see rising inflation (rise in cost of living). However, if the economic recovery is sustainable, if demand grows at a similar rate to productivity, then inflation will remain low. Previous experiences of economic recovery and inflation

UK Housing Market Stats and Graphs

UK Housing Market Stats and Graphs

A look at the main UK housing market data. House prices Affordability of housing Interest rates Supply of housing House price inflation Nationwide data Annual house price inflation running at 5.3% in Q1 2016 London showed strongest housing market with prices rising more than other areas.. Price of a typical home is £198,564 (Q1 2016) UK House prices in past few decades In 1969, average house prices were: £4,312 In 1975, average house prices were: £10,388. In 1980, average house prices were: £22,676 In 2016, average…

Historical Unemployment Rates

Historical Unemployment Rates

  UK unemployment rates since 1881.   This shows the fluctuations in unemployment over the past 100 years in the UK. Measuring unemployment is not a precise science. This data mostly relies on administrative statistics on the number claiming some kind of unemployment insurance. The government is changing how unemployment is measures. You can view the pdf for more detail on changing methodology of unemployment. Explaining the change in unemployment Cyclical…

Buy British campaigns

Buy British campaigns

At different times there have been campaigns to ‘Buy British’ – patriotic efforts to support the economy. The campaigns seem quite popular, but usually fade out, having made little difference to major macro-economic variables. It is a form of economic nationalism and similar campaigns can be seen in many different countries. Buy British campaigns can make more difference when they are targeted at particular industries, such as farming, steel.   Examples of Buy British Campaigns 1930s  A ‘Buy British’ campaign  was launched…

UK Balance of Payments

UK Balance of Payments

The balance of payments is the record of a country’s transactions / trade with the rest of the world. The balance of payments consists of: Current Account (trade in goods, services + investment incomes + transfers) Capital Account / Financial Account (capital and financial flows, net investment, portfolio investment) Errors and omissions. It is hard to collect all data so some is missed out. In theory there should be a balancing between capital and current / financial account. If there is a current account deficit, there should be a surplus on the capital /…