The budget deficit is the annual amount the government has to borrow to meet the shortfall between current receipts (tax) and government spending. Net borrowing for the UK 2021/11 is £151.8bn or 14.8% of GDP [OBR – J511] National debt or public sector net debt – is the total amount the government owes – accumulated …
A budget deficit is the annual shortfall between government spending and tax revenue. The deficit is the annual amount the government need to borrow. The deficit is primarily funded by selling government bonds (gilts) to the private sector. Summary of effects of a budget deficit Rise in national debt Higher debt interest payments Increase in …
Wage growth is a key factor in determining living standards, aggregate demand and inflation. If wages increase faster than inflation, then households will be able to afford more goods and services. Real wage growth = nominal wage growth – inflation. In the post-war period, apart from short-lived recessions, real wage growth has been positive, growing …
Definition Real wages show the value of wages adjusted for inflation. Real wages are a guide to how living standards have changed. For example, if nominal (actual) wages increased 5%, but inflation was 5%. This would mean the purchasing power of your wages had stayed the same. The net effect would be the same as …
Immigration can give substantial economic benefits – a more flexible labour market, greater skills base, increased demand and a greater diversity of innovation. However, immigration is also controversial. It is argued immigration can cause issues of overcrowding, congestion, and extra pressure on public services. There is also a debate about whether immigration of unskilled workers …
The UK like Europe and the US is facing an unwelcome return of stagflation – a period of higher inflation and lower growth. In March 2022, UK GDP fell 0.1%, yet at the same time, inflation has jumped to 7% with forecasts of 10% inflation by the end of the year. The Bank of England …