UK Economy Stats 2023 - Macro Exam Preparation

Introduction

• Core UK economy stats crucial for 2023 macro exams
• Important for essays and weighing arguments
• Encourage sharing video for broad benefit
• Part of a larger 2023 exam revision playlist

Economic Growth

• 2022 Growth: 4.1% (post 7.6% in 2021)
• 2020 Contraction: -11% due to recession
• Q4 2022 Growth: 0.1%
• 2023 Forecast: -0.2% contraction
  • High inflation affecting cost of living
  • Supply-side shocks: oil, gas, electricity, food prices
  • Low consumer/business confidence
  • Contractionary fiscal/monetary policies
• Output Gap: Negative, projected peak at -1.6%
• GDP Details:
  • Per capita: £33,000
  • Total GDP: £2.4 trillion
  • Sector Breakdown: 79% services, 14% manufacturing, 6% construction, 1% agriculture

Unemployment

• Current Rate: 3.8%
• Projected Rate: Rise to 4.5%
• Employment Rate: 75.8%
• Economic Inactivity Rate: 21.4%
  • Increased post-COVID, especially 50s and 60s age group
• Youth Unemployment: 10.8%, down from 14.5%
• Long-term Unemployment: 1%

Wage Growth

• Annual Wage Growth: 6.6%
  • Below inflation, real wages negative
• Labor Market: Loosening, job vacancies declining

Inflation

• Current Rate: 10.1% (CPI measure)
• Past Trends: High due to oil, gas, food prices
• Inflation Drivers: Wage growth, weak pound
• International Comparison: Higher than Eurozone (6.9%) and US (5%)
• Forecast: Reduction expected later in year
• Core Inflation: 6.2%
• Producer Price Inflation: 8.7%
• Inflation Expectations: 5.4% over next 12 months
• Food Price Inflation: 19.1%

Trade

• Current Account Deficit: 3.3% of GDP
• Historical Deficit: Driven by high unit labor costs, low productivity, weak investment
• Pound vs Major Currencies: Weak, impacting import costs

Government Finances

• Budget Deficit: 6.1% of GDP for 2022-2023
• National Debt: 100% of GDP
• Interest Rates on Bonds: 3.46%
• Contractionary Fiscal Policy: Raising taxes, e.g., income tax bands frozen, corporation tax rise
• Income Tax System: Progressive, with fiscal drag expected

Interest Rates

• Bank of England Base Rate: 4.25%
• Impact on Lending: Higher lending rates, despite bank willingness
• Consumer/Business Confidence: Very low, signs of recovery

Savings and QE

• Savings Ratio: 9.3%
• Quantitative Easing: £895 billion total, last during COVID

Conclusion

• Use these stats in macro essays for application and argumentation
• Part of a broader revision series for 2023 macro exams
• Encouraged to view other videos in the playlist for a comprehensive preparation