MACRO 2024 STATS

• Annual growth in the UK in 2023 was 0.1%, a very poor performance and the economy is technically in recession
• The UK economy is expected to grow by 0.8% in 2024
• The UK's potential growth rate has fallen from around 2.5% before the financial crisis to around 1% currently, which is very poor for an advanced economy
• The UK's output gap is estimated to be -0.1%, indicating the economy is operating slightly below its potential
• GDP per capita in the UK is around £36,000
• The size of the UK economy is estimated to be around £2.53 trillion
• Breakdown of UK GDP by sector

  • Services: 79%
  • Manufacturing: 14%
  • Construction: 6%
  • Agriculture: 1%
• Unemployment in the UK currently stands at 4.2%, above the natural rate of around 3.5%
• The employment rate in the UK is 74.5%, lower than pre-COVID
• Economic inactivity in the UK is 22.2%, notably higher than pre-COVID
• Real wage growth in the UK is 5.6%, higher than the inflation rate of 3.2%
• The UK labour market is loosening, with job vacancies falling and unemployment expected to rise
• Youth unemployment in the UK is 11%
• Consumer confidence in the UK is very low due to the cost-of-living crisis
• CPI inflation in the UK is 3.2%, above the 2% target, but on a downward trend
• Core inflation in the UK is 4.2%, indicating underlying inflationary pressures
• Producer price inflation (PPI) in the UK is 0.6%, much lower than CPI, suggesting future downward pressure on inflation
• Households in the UK expect inflation to be 3.3% in the coming year
• n is rising considerably for farms and it's a future indicator of CPI inflation this is basically wholesale inflation here here and if that's high then retail prices which is what the CPI will track and measure will then go up in the future to compensate
• If n is low like it is at the moment only 0.6% it means that those input prices could be falling or they're rising in a very very slow rate which is good news and if it's lower than the CPI it means in the future we expect the CPI rate to come down
• Inflation expectations


  What households expect or think inflation is going to be in the coming year
• Inflation expectations are at 3.3% so households expect inflation to still be stubborn in the UK
• Wage growth is running quite hot at 5.6% causing complication with the whole inflation picture and policy decisions
• Wage growth is expected to come down this year helping again to keep inflationary pressures quite cool
• The UK has a current account deficit of 3.2% of GDP
• The average size of the UK's current account deficit has been around 4% over the last decade or 15 years
• Factors keeping the UK's current account deficit high

  • Productivity has been awful in the UK ever since the financial crisis
  • Very weak business investment, blamed on Brexit
  • Extremely high minimum wages in the UK, one of the highest in the world
• The pound is very weak, it's been weak ever since the Brexit vote in June 2016
• The weakness of the pound has not helped improve the UK's current account deficit because the UK doesn't have a large manufacturing base, it's a large dominant Services driven economy
• The UK government is running a budget deficit of 4.2% of GDP in the most recent fiscal year 2023 to 2024
• The UK's national debt is currently standing at 98% of GDP
• The IMF has said the UK is teetering on the edge of unsustainability when it comes to the level of government finances
• UK government bond yields have gone up to 4.2% on average
• Contractionary fiscal policy


  Freezing income tax bands, increasing the higher rate, and cutting National Insurance
• Freezing the income tax bands is forecast to raise the government an extra 45 billion pounds a year more by 2028
• The Bank of England base rate is currently 5.25%
• The average lending rate is 6.25%
• Consumer confidence and business confidence are extremely weak in the UK
• The savings ratio in the UK is 10.5%, quite high for historical standards
• The total amount of quantitative easing by the Bank of England stands at 895 billion