UK Economy Stats

• Annual growth in the UK economy in 2023 was 0.1%, a very poor performance and the economy was technically in recession
• The UK economy is expected to return to positive growth in Q1 2024
• Factors weighing on UK economic growth


  • High interest rates
  • High personal taxation
  • Cuts to government spending
  • Low consumer and business confidence
• Factors constraining UK's long-run supply performance


  • Poor productivity
  • Shrinking labour force
  • Poor infrastructure
  • Underperforming public services
  • Weak business investment
• Potential growth


  The rate of growth an economy can achieve without inflation setting in
• UK's potential growth rate has fallen from around 2.5% pre-financial crisis to around 1% currently
• UK economic growth forecast for 2024 is 0.8%
• UK is estimated to be in a small negative output gap of 0.1%
• UK GDP per capita 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%
• UK unemployment rate currently stands at 4.2%, above the natural rate of 3.5%
• The employment rate in the UK is 74.5%, lower than pre-pandemic
• UK economic inactivity rate is 22.2%, notably higher than pre-pandemic
• Real wage growth in the UK is 5.6%, higher than the 3.2% inflation rate
• Tight labour market


  Many job vacancies available but few workers to fill them due to low unemployment
• Loose labour market


  Falling job vacancies and plentiful workers available due to rising unemployment
• Youth unemployment in the UK is 11%
• UK consumer confidence is very low due to the cost-of-living crisis
• UK CPI inflation is currently 3.2%, above the 2% target
• UK core inflation (excluding volatile items) is 4.2%, more than double the target
• UK producer price inflation (PPI) is currently 0.6%, much lower than CPI
• UK households 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
• Underlying 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
• Other factors keeping the UK's current account deficit high


  • Extremely high minimum wages in the UK
  • One of the highest minimum wage rates in the world currently at £14 an hour
• 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 amount of government spending on debt interest has been more than £100 billion more than what the UK government spends on education yearly
• 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