Reasons for Youth Unemployment

Reasons for Youth Unemployment

A look at the economics reasons for high youth unemployment (16-25) in the UK.During the recession, youth unemployment rose at a faster rate than the main unemployment rate.  After peaking at 20% (1 million) in early 2012, youth unemployment has recently fallen to 12 % (2017) The reasons for youth unemployment are fairly similar to other causes of unemployment. They include:Lack of qualifications. Young people without any skills are much more likely to be unemployed (structural…

UK Inflation Rate and Graphs

UK Inflation Rate and Graphs

Current UK Inflation RateCPI inflation rate:  3.0% (headline rate) CPI – D7G7 at ONS (page updated 17 October 2017)Source: Raw data General inflation tables | CPI annual % change D7G7 at ONSOther measures of inflation(CPIH) CPI including owner occupiers’ housing costs – 2.8% (CPIH – L550) Factory gate prices (Output prices) 3.3% June 2017 (output prices) ONS See: Measures of inflationCost-push inflationary factors In 2017, UK has seen a rise in cost-push…

Factors that affect the housing market

Factors that affect the housing market

The housing market is influenced by the state of the economy, interest rates, real income and changes in the size of the population. As well as these demand-side factors, house prices will be determined by available supply. With periods of rising demand and limited supply, we will see rising house prices, rising rents and increased risk of homelessness. Factors determining house pricesMain factors that affect the housing marketEconomic growth. Demand for housing is dependent upon income. With higher economic growth…

Monetary Policy vs Fiscal Policy

Monetary Policy vs Fiscal Policy

The aims of fiscal and monetary policy are similar. They could both be used to:Maintain positive economic growth (close to long-run trend rate of 2.5%) Aim for full employment Keep inflation low (inflation target of 2%)The principal aim of fiscal and monetary policy is to reduce cyclical fluctuations in the economic cycle. In recent years, governments have often relied on monetary policy to target low inflation. However, in recessions, there are strong arguments for also using fiscal policy to achieve economic recovery.Fiscal policy involves changing government spending…

What happens in a recession?

What happens in a recession?

A recession is a period of negative economic growth. In a recession, we see falling real GDP, falling average incomes and rising unemployment.This graph shows US economic growth 2001-2016. The period 2008-09 shows the deep recession, where real GDP fell sharply. Other things we are likely to see in a recession1. UnemploymentThe rise in unemployment 2008-09 mirrors the fall in real…

UK – IMF Crisis of 1976

UK – IMF Crisis of 1976

In 1976, the minority Labour UK government of James Callaghan was ‘forced’ to borrow $3.9 billion from the IMF to stabilise the value of Pound. The loan was also accompanied with conditions to cut public spending and raise interest rates. It marked a symbolic break with the post-war economic consensus and was a reflection of persistent problems in the post-war UK economy. After the bailout, economic conditions turned around with an improvement in the current account, budget deficit and appreciation in Sterling. But, fundamental weaknesses remained with high inflation…

Are Android and iPhone close substitutes?

Are Android and iPhone close substitutes?

Substitute goods are two goods which can be used for a similar purpose – they provide different alternatives to consumers. In the case of Android and the iPhone, they offer similar functionality and form, but to some consumers there is a big differential in terms of brand loyalty, meaning for certain types of consumers they are very weak substitutes.First-time consumer Suppose your grandmother has never had a smartphone, and you persuade her to buy one. To your grandmother, the two phones will…

UK unemployment-rate

UK Unemployment Stats and Graphs

A selection of graphs and statistics on UK unemployment. Also, looking at factors that explain UK unemployment and why unemployment has fallen in recent years.Raw data:  Labour market data | Source: ONS MGSX (LFS) Current UK Unemployment rateUnemployment rate of 4.3%, (Oct 2017) –  (UK Unemployment at ONS) 1.45 million unemployed people. (ONS)Employment ratesEmployment rate: 75.3% (proportion of people aged 16-64 in work) – ONS Employment:  32.136 million people in work.Participation…