The UK economy and how it compares to other countries

With the election coming up in July a lot of focus has been put on how the UK economy has been performing. Amidst reports of falling inflation, Chancellor Jeremy Hunt has made comparisons of the UK economy to other nations. In this article we summarise a range of views on how the UK is fairing. Here are the findings:

·      Inflation has been reported to be lower than in the United States of America (USA) and the eurozone. From the start of the year to April 2024, Consumer Prices Index (CPI) was 2.3% in the UK compared to 3.4% in the USA and 2.4% in the eurozone. Despite this, the population is still feeling the effects of the cost-of-living crisis, with prices remaining high.

·      Hunt has claimed the UK economy will grow quicker than some other large economic countries in the world. Measured by gross domestic product (GDP), the UK economy is predicted to be 8.8% larger by 2029 than 2024. This is higher than Germany (5.7%), France (8.3%) and Japan (4.4%), but not as large as the USA (13.7%). Looking at GDP data for Q1 2024, the findings show GDP has grown by 0.6% compared to Q4 2023 in the UK, higher than the eurozone (0.3%) and USA (0.4%). However, when looking at 2023, the GDP growth in the UK was only 0.1% compared to 2022, only lower than Germany (-0.3%). Additionally, compared to other large economic countries, it is also seen the second lowest growth since the pandemic (1.7%). Time will tell whether Hunt’s claims of large growth will be true.

·      Hunt stated since 2010 no country other than the USA and China has attracted more foreign direct investment (FDI) than the UK. The data from the Department of Business appear to concur with this judgment, with UK FDI growing by £498 billion between 2010 and 2022. This was less than USA (£848 billion) and China (£707 billion) but more than other European countries, including France and Germany. 

This article has stated some of economic and financial findings in the UK recently and how they compare to other countries. We hope you found this article interesting and if you are considering a job in the financial services check out our jobs page or contact us for more information.