Economics Help Resources
UK International Competitiveness
- The increasing importance of trade to the UK economy means that the international competitiveness of the economy is very important. If British industry was to become uncompetitive it would have the following adverse effects on the economy
- Lower Economic growth and living standards, (negative multiplier effect)
- Increased Unemployment
- Deterioration in the Balance of Payments (current account) as the UK imported more and exported less
- Devaluation of the Exchange Rate
- Higher levels of Inflation
Measuring International Competitiveness
- Relative Export Prices
If UK exports become more expensive than other countries this is a decline in competitiveness
Terms of Trade measures index of Export Prices
Index of Import Prices
Productivity and Unit Costs of Production.
If there is an increase in productivity, meaning industry can produce more with lower costs then UK will become more competitive
- Balance Of Payments.
Revision Notes and Essays on International Trade
Effects Globalisation on UK Economy
Govt policies to increase competitiveness


