Macro current statistics Flashcards
(7 cards)
1
Q
growth
A
- low in the UK economy at the moment due to high interest rates, still quite high food/raw materials prices, low consumer confidence - Trumps tariffs
- annual growth rate in 2024 1.1%
- annual growth forecast only **0.75% (BoE)
- negative output gap
- 79% of GDP services - not diverse (hold us back)
2
Q
unemployment
A
- lower employment rate than prior pandemic - due to rising economic inactivity (mental health issues, older people not come back post COVID)
- resulted in high wage growth in UK due to strong bargaining power
- very weak consumer confidence - Inflation crisis, Trumps crisis
3
Q
Inflation
A
- peaked at 11.1% in October 2022 - much lower now at 2.6% in 2025, likely to remain low due to weak consumer confidence
- possible rise due to higher costs? (Trumps tariffs)
4
Q
Trade
A
- current account deficit
- very poor productivity/weak investment (since Brexit) keeping UK uncompetitive
- high min wage of £12.21/hour = uncompetitive
- despite weak pound: lack of manufacturing in UK and we tend to import necessities: Marshall learner issue
5
Q
Gov finances
A
- budget deficit
- national debt high
Taxes: - income tax bands frozen until April 2028 - tax rise (due to pay rise due to inflation meaning they are not actually better off and so have tax rise) - fiscal drag
- increase in corporation tax to 25%
- VAT at 20%
- gini coefficient increasing
6
Q
Interest rates
A
- BofE Base rate 4.25%: rapidly increasing recently due to inflation but cut in last couple of months
- weak business confidence (Trump)
- high savings ratio: cost of living crisis/low confidence
7
Q
formulas:
Weighted Price Index (CPI)
Multiplier
Index number
Absolute poverty
Terms of Trade
A
CPI: covert prices to index, multiply by weights, add up weighted prices, divide by total weights
Multiplier: 1/(1-MPC) or 1/MPW
Index number: Current year/Base year x100
Absolute poverty: <$2.15/day
Terms of trade: PofX/PofI x 100
