uk economy

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 May 2016, Public sector net debt (ex. public sector banks) was £1,606.9 billion, equivalent to 83.7% Source: (page updated June 22nd 2016) ONS Datasets | Long run fiscal indicators PSA5A at ONS | Budget deficit – annual borrowing This is the amount the government has to…

Does a devaluation help the economy?

Does a devaluation help the economy?

A devaluation (depreciation) occurs when the exchange rate falls in value. This causes exports to be cheaper and imports to be more expensive. In theory, it can help increase economic growth, though it may cause inflation. In theory, a devaluation will cause the following to happen: The price of UK exports will be lower in foreign currencies. This will increase the competitiveness of UK exports and should cause an increase in demand for UK exports. The price of imported goods into the UK will increase. This will reduce our spending…

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 Economy 2016

UK Economy 2016

The UK economy in 2016 is emerging from a long period of economic stagnation and the recession of 2008-12, and has some positive signals of growth, low inflation and falling unemployment. However, the UK chancellor has been giving mixed signals. On the one hand he has pointed out that UK has one of the strongest rates of economic growth in the developed world. On the other hand, he is also keen to lower expectations pointing to the many potential pitfalls to future economic growth.

Impact of rising population in the UK

Impact of rising population in the UK

The UK population is projected to increase by 9.7 million over the next 25 years from an estimated 64.6 million in mid-2014 to 74.3 million in mid-2039. (ONS). Approx. 50% of the population increase is expected due to net migration. This is a look at the economic and social impact of a rise in the population.   The UK is bucking the trend of many Western economies, such as Italy, France and Japan – who are seeing low birth rates, an ageing population…

Threats to UK economy

Threats to UK economy

The UK economy is showing signs of economic recovery. Positive economic growth, falling unemployment, and after a long gap – rising real wages. However, despite positive economic growth, there are many potential threats that could derail the economy and lead to a period of prolonged weak growth or even future recession. Some of the main threats to UK economy include: 1. Weak global growth The global economy is struggling to meet previous rates of economic growth. With the exception of US, many economies are…

Economic Growth UK

Economic Growth UK

Economic growth measures the change in real GDP (national income adjusted for inflation; ONS call it chained volume measure of GDP) In 2014 the UK economy grew by 2.4% –  (compared to 1.7% in 2013. GDP was 2.6% higher in Quarter 2 (Apr to June) 2015 compared with the same quarter a year ago. The peak to trough fall of the economic downturn in 2008/2009 is now estimated to be 6.0% In 2013, GDP at market prices was £1,713,302 million (£1.7 trillion) Updated September 14th, 2015 Recent UK Economic Growth

Effects of a budget surplus

Effects of a budget surplus

The chancellor George Osborne has recently announced a plan to enshrine budget surpluses in law. It is worth noting, that budget surpluses are quite rare in the past 120 years. The argument of the chancellor is that with national debt ‘unsustainably high’ – periods of economic growth should be taken as an opportunity to pay down debt and reduce the burden for future generations. What is the impact of a budget surplus? 1. Higher taxes / lower spending. To ensure a budget surplus,…