1. THE PERFORMANCE OF THE UK ECONOMY Geoff Riley Tutor2u

2. Sustained growth….. NICE 1990s

5. C+I+G+X-M Consumer led growth (2/3 of UK economy) – fuelled by debt, equity withdrawal, low savings, confidence, low unemployment

6. Household savings ratio

7. Savings, unemployment and interest rates Over-confidence?

8. An end to the housing boom? The key thing is what is going to happen now? Soft landing? Crash? ‘Britain, because of its exceptional dependence on finance and housing, will suffer more than other big economies and certainly more than the United States’ (Kaletsky, 02-08)

9. Consumer borrowing

10. The debt mountain

11. Confidence on the slide

12. Unemployment

13. A record level of employment Inward migration Public sector spending boom Rise of part-time work

14. But big changes in the pattern of jobs De-industrialisation Since 1997, UK manufacturing has declined from 17 per cent to 13 per cent of gross value added and from 17 per cent to 11 per cent of total employment.

15. Textiles hit by globalisation

16. But car making still very strong

17. But oil and has is past its peak

18. Inflation – keeping a lid on consumer prices Inflation targeting started in 1992! BoE made independent in 1997

19. Goods and services

20. Retail price index and the CPI

21. Pay and prices – real incomes Is this valid? CPI is flawed. Tight control of inflation, decline in collective bargaining, low inflation + people not understanding personal RPI

22. Inflationary threats from overseas

23. Crude oil

24. Interest rates – BoE policy rates

25. Le Credit Crunch

26. Interest rates elsewhere

27. Growth and interest rates

28. Britain’s trade deficit

30. Trade in Services

32. The Current Account Britain’s current account deficit in 2007 was £53bn

33. Trade with China

34. Government spending and taxation

35. The Budget Deficit

36. A rising national debt

37. Sterling – dollar exchange rate

38. Sterling – Euro Exchange Rate

39. A looming economic crisis?