theme 2 case studies - UK

Question 1

What is the projected GDP growth rate of IMF and BoE?

Answer 1

• IMF projects the UK economy to grow by 1.6% in 2025
• BoE forecast 0.75% growth for 2025

Question 2

What is UK inflation & CPI?

Answer 2

• Inflation = 2.6% (March 2025)
• Annual CPI inflation is expected to rise from 2.5% (2024) to 3.2% (2025)

Question 3

What is UK unemployment rate?

Answer 3

4.5% (2025)

Question 4

What is the UK base rate?

Answer 4

4.25% (cut from 4.5%)

Question 5

What is the impact of tariffs on the UK?

Answer 5

• Implementation of U.S. tariffs, including a 10% tariff on global imports, is projected to disrupt UK exports - affecting manufacturing & automotive sectors
• May contribute to a slowdown in economic growth, with forecasts suggesting growth below 1% through 2026

Question 6

What changes were made to fiscal policy in the budget?

Answer 6

In the March 2024 Budget, the government announced a 2% reduction in National Insurance contributions, aiming to stimulate consumer spending & economic activity

Question 7

What is current UK consumer/business confidence?

Answer 7

• As of March 2025, British business confidence remained steady at a 6-month high, supported by a rebound in retail sales
• But, upcoming tax hikes & increased household energy bills pose challenges

Question 8

UK Budget deficit (2025)

Answer 8

£70.6bn

Question 9

UK national debt (2025)

Answer 9

£2.79tn (March 2025)

Question 10

How has the Uk saving ratio changed since 2020?

Answer 10

• Peaked at 27.4% in Q2 of 2020
• Decreased to 6.6% of Q2 of 2022
• Rose to 11.1% of Q1 in 2024
• This increase coincides with cost of living pressures and slowed household consumption

Question 11

What is the Uk’s trade deficit?

Answer 11

The Total G&S trade deficit narrowed by £3.6 billion to a deficit of £6.6 billion in Q1

Question 12

How much have house prices risen by in the last 22 years in London?

Answer 12

Over 350%!!

Question 13

How much new money did the MPC create between 2009-2012 using QE?

Answer 13

£375bn!

Question 14

What is the UK retirement age rising to as of 2026?

Answer 14

From 66 to 67

Question 15

What is UK GDP & GDP per capita? What comprises UK GDP?

Answer 15

• GDP per capita = $36,000
• GDP = £2.851tn - services = 79%, manufacturing = 14%, construction = 6%, agriculture = 1%

Question 16

What is the UK’s output gap?

Answer 16

-0.6%

Question 17

What is the UK economic inactivity rate?

Answer 17

21.4%

Question 18

What is the UK wage growth rate?

Answer 18

5.9%

Question 19

What is the UK youth unemployment?

Answer 19

13.3%

Question 20

What is the current account deficit as a % of GDP

Answer 20

2.6% of GDP

Question 21

What is national debt as a % of GDP

Answer 21

96% of GDP

Question 22

What is the UK’s Gini coefficient?

Answer 22

Just risen to 0.357

Question 23

What was the UK’s annual growth rate in 2024?

Answer 23

1.1%