As UK voters prepare to elect a new government on July 4, the state of the economy is at the forefront of their minds. The health of the world’s sixth-biggest economy is likely to be a decisive factor in this election. Here, we explore five key charts that illustrate the current economic landscape in the UK.
- GDP Growth Rate
The GDP growth rate is a crucial indicator of economic health. Over the past decade, the UK’s GDP growth has experienced fluctuations, with a significant dip during the COVID-19 pandemic. Although there has been a recovery, growth remains sluggish compared to pre-pandemic levels.
The chart shows the UK’s GDP growth rate from 2013 to 2023. The impact of Brexit and the pandemic are evident, with notable declines in 2016 and 2020. Despite a post-pandemic rebound, the growth rate has not returned to pre-2016 levels.
- Inflation Rate
Inflation has become a pressing issue for the UK economy, affecting both businesses and consumers. The Consumer Price Index (CPI) has shown a marked increase over the past few years, reaching levels not seen in decades.
The sharp rise in inflation since 2021 has been driven by various factors, including supply chain disruptions, increased energy prices, and post-pandemic demand surges. This has led to higher living costs and increased pressure on household budgets.
- Unemployment Rate
Unemployment is another critical factor affecting the economy. The UK’s unemployment rate saw a dramatic spike during the pandemic but has since been on a downward trend.
The chart highlights the peak in unemployment in mid-2020 and the gradual improvement in the job market since then. However, challenges remain, particularly in certain sectors still recovering from pandemic-related disruptions.
- Public Debt
The level of public debt is a significant concern for the UK economy. Public borrowing surged during the pandemic as the government implemented measures to support the economy.
This chart shows the increase in public debt as a percentage of GDP from 2013 to 2023. The substantial rise during 2020 reflects the fiscal response to COVID-19. Managing this debt while ensuring economic growth is a key challenge for the next government.
- Housing Market
The UK housing market has seen significant volatility, with prices soaring over the past decade, making homeownership increasingly unaffordable for many.
The chart depicts house price growth, highlighting the rapid increases since 2013. While recent data suggest a cooling market, affordability remains a major issue, impacting social mobility and economic stability.
Conclusion
As the UK heads to the polls, the state of the economy will undoubtedly play a crucial role in shaping voter decisions. The next government will need to address these key economic issues—GDP growth, inflation, unemployment, public debt, and the housing market—to ensure a stable and prosperous future for the country. Understanding these challenges through the lens of these five charts provides a clearer picture of the economic landscape and the decisions facing UK voters.
