Economy of UK

The UK economy is emerging slowly from recession, but growth is moderate and unemployment is high. In addition, the UK is facing inflation above the government’s target of 2%. Also, the government have taken several steps to reduce the burden of government borrowing; these spending cuts and tax rises are likely to keep the economic recovery at a modest pace.

Economic Growth

Source: ONS

GDP (QoQ)				10Q3	0.8 %
Service sector output				3m to Sep	2.1 %
Industrial production				3m to Oct	3.8 %
Manufacturing output				3m to Oct	5.6%
Households’ consumption				10Q3	1.7%
Retail sales volumes				Oct	-0.1%
Whole economy investment				10Q3	2.8%
Goods exports (volumes)				3m to Oct	12.0
Goods imports (volumes)				3m to Oct	11.6
Current account balance, £bn				10Q2	-7.4
Business Investment (Provisional)				10Q2	1.9%

Unemployment

Source: ONS

Labour market & earnings
Unemployment, mn				3m to Oct	2.50
Unemployment rate, %				3m to Oct	7.9
Claimant unemployment, mn				Nov	1.47
Claimant rate, %				Nov	4.5
LFS total in employment, mn				3m to Oct	29.1
LFS employment rate, %				3m to Oct	70.6
Workforce jobs, mn				Sep	30.7
Headline average earnings %4				3m to Oct	2.3

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Inflation

Source: ONS

Inflation & prices
CPI				Nov	3.3
RPI				Nov	4.7
RPIX				Nov	4.7
Producer output prices (nsa)				Nov	3.9
Producer input prices (nsa)				Nov	9.0
Halifax house prices				Nov	-0.7
Nationwide house prices				Nov	0.4

Government Borrowing

• More on UK Public Sector Debt
• UK Debt increased rapidly after 2007 because of the recession, falling tax receipts and financial bailout for banks.
• The government have taken several steps to try and reduce the level of government borrowing such as tax increases and spending cuts. However, the stabilisation of public sector debt to GDP depends on continued economic growth.
• Gross Public Sector Debt includes temporary financial sector intervention
• Public Sector debt excludes financial sector intervention.

Sources:

• Data Forecasts HM Treasury
• Current Interest rates at Bank of England

Related

• UK Economy 2010
• Latest Essays on UK economy