What determines International Competitiveness.

factors affecting the international competitiveness and government policies to enhance the UK relative position. and how successive uk gov measures have been

Factors effecting International Competitiveness

1. Inflation

UK inflation has been close to governments target since government made MPC independent in 1997. Therefore, this low inflation has helped increase UK competitivness.
HOwever, low inflation is due to other factors as well as Government
2. Increased Productivity

Government has used supply side policies to increase productivity. E.g. education and training.
However, there is a limit to what the government can do to increase productivity. Increased productivity can be due to other factors.

3. Value of Exchange Rate

A devaluation improves competitiveness. HOwever, in recent years the £ has been strong. This suggests it is other factors which have increased competitiveness rather than the exchange rate.

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Perma Link | By: T Pettinger | Sunday, June 17, 2007
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