Current Trends

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    Current Trends

    • Between 1992 and 2007, the UK economy has experienced:
      • Continuous economic growth
      • Low unemployment
      • Low and stable inflation
        • This can be attributed to: successful monetary policy, a high value of the pound, and increased global pressure on firms to keep prices low
      • The economy also has a more flexible labour market than other EU countries, meaning firms can hire and fire workers more easily, enabling the economy to be more responsive to demand
      • Increased immigration has also helped to increase AS, keeping it in line with increases in AD.

     

    • The UK has a current account deficit, caused largely by a deficit in trade goods
    • Trade in services (e.g. education, financial) has been doing well, and is likely to continue to do so, as growing economies such as China and India will be in need of them

     

    • However, the UK economy could benefit from:
      • Improved transport
      • A higher economic activity rate
      • Better education
      • Increased innovation

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