UK application

Question 1

GDP

Answer 1

£2.8 trillion

Question 2

Growth

Answer 2

2024 - 0.8%

Question 3

OBR projected growth

Answer 3

2025 - 1% - down from 2% in October
2026 - 1.8%
2027 - 1.7%

Question 4

CPI inflation

Answer 4

2.6%

Question 5

Unemployment rate

Answer 5

4.4%

Question 6

Economically inactive

Answer 6

21.4%
400k rise since 2020

Question 7

CA deficit

Answer 7

Q3 24
2.5% GDP
£18bn

Question 8

Budget balance

Answer 8

-4.8% GDP

Question 9

Debt

Answer 9

96% GDP

Question 10

Base rate

Answer 10

4.5%

Question 11

Exchange rate

Answer 11

Forbes - 5th strongest currency in the world
£1 = $1.32

Question 12

Gini

Answer 12

0.35

Question 13

Sectoral distribution

Answer 13

Agriculture - 1%
Manufacturing - 14%
Construction - 6%
Services - 80%

Question 14

Poverty

Answer 14

8 million working-age adults
4 million children (30%)
22%
- most vulnerable groups include larger families, minority groups, disabled people, informal carers
UK median income is £35k, relative poverty line is £22k

Question 15

Inflation

Answer 15

High of 11.1% in Oct/22 due to Russia-Ukraine war increasing energy prices
Dropped to 2% in May/24 due to:
- drops in gas prices
- monetary policy
- slowdown in global economic growth

Question 16

Unemployment

Answer 16

Increase of 0.3% in 2024
- October budget announced min. wage rises (£12.21) and ↑ in national insurance contributions
↑ integration of AI and automation
Decrease in business confidence due to trade tensions

Question 17

Trade and CA

Answer 17

UK runs a consistent CA deficit:
- strong domestic demand
- stagnation in productivity growth
2016-23 - ↑ £289bn exports
4th largest importer in the world

Question 18

Exports

Answer 18

USA - 22.3%
Germany
Netherlands

Question 19

Imports

Answer 19

USA - 13.2%
Germany
China

Question 20

Top exports

Answer 20

Financial services - $75bn
Travel
Telecoms
Cars

Question 21

Supply-side weaknesses

Answer 21

R+D spending is 1.7% of GDP
Low public and private sector investment
Regional disparities
Labour market issues:
- skills shortages - Brexit
- gig economy
- geographical/occupational immobility

Question 22

Demand-side policies

Answer 22

GFC
Temporary VAT cut from 17.5% - 15% to boost consumption
5.75% - 0.5% interest rates in 2 years - ineffective due to low availability of credit
- quantitative easing to ↑ money supply and consumption

Question 23

Spring statement - welfare

Answer 23

Spring statement: Freeze health-related universal credit for existing claimants at £97 per week until 2029
Stricter eligibility checks for PIP - estimated to push 250k people into relative poverty

Question 24

Trade deal

Answer 24

Joined CPTPP and now has access to tariff-free trade with many pacific rim nations, such as NZ, Australia, Vietnam

Question 25

Trade deficit in goods

Answer 25

2024 - $53bil

Question 26

Examples of recent UK supply-side policies

Answer 26

Privatisation of Royal Mail Deregulation of the UK retail energy market Tax free childcare Creating 20 institutes of technology Reforms to the UK immigration system Super-deduction tax incentive for business capital investment

Question 27

Inequality

Answer 27

Richest 1% of Britons hold more wealth than lowest 70%

Question 28

Youth unemployment rate

Answer 28

13.3%

Question 29

GDP per capita

Answer 29

£36k

Question 30

Output gap

Answer 30

-0.6%

Question 31

Corporation tax

Answer 31

25%

Question 32

Confidence

Answer 32

Weak for consumers and businesses

Question 33

Welfare spending

Answer 33

$160bn

Question 34

Spring statement

Answer 34

Plans to force councils to build more homes - OBR projects ↑ 170k above average in houses in 5 years £625mil to be spent in England to boost existing schemes to train workers in the construction sector