1. The British Economy

2. Outline of lecture Introduction I The British Model
II 2008 questions the British Model
III Sectors of the economy

3. Introduction 6th largest economy
10th largest exporter/6th largest importer
Europe’s largest recipient of FDI
Globalised economy

4. I The British Model Assets of the British Economy Drawbacks
GDP growth. 1.8%
4.2% unemployment rate.
Flexibility of the labour market
FDI
Low Inflation. 2.4%.
Drawbacks
Wage inequalities
Deficit in balance of trade in goods

7. After a brief spurt, the rate of average annual pay growth has slowed even though it is still rising faster than inflation to give real pay growth after five years of stagnation and falls.

8. Despite a number of false dawns, there is no sign of the recovery in productivity growth that is needed for sustainable rises in living standards.

9. II II Since 2008 questioning the British model.
Financial crisis.
Gordon Brown’s bail-outs.
David Cameron’s austerity policy
UK budget deficit : fourth highest in G7 countries
(87% of GDP)

10. III Sectors of the economy
Services sector : 78% of GDP
Banking, insurance, business services (11,8% of GDP)
Financial services : 6.5% of GDP (9.6% in 2011)
Industry and manufacturing: 21% of GDP
Oil and gas: decline since 2005
Manufacturing : 10% GDP
Aerospace
Pharmaceuticals
telecommunications
Agriculture : 0.7% GDP
Services suffered in the downturn like the rest of the economy but on official measures the sector had regained its previous peak by the end of 2011, well ahead of the rest of the economy. It continues to expand at a healthy rate.

12. Industrial production in the UK is still struggling to recover from the recession, remaining around 9 per cent below its pre-recession size.

13. IV Shift from Keynesianism to neo-liberalism
What is the welfare state ?
1946: the National Insurance Act
1948: the National Assistance Act
1946: The National Health Service Act
nationalisations in transport and energy

14. 2. What is the Keynesian era?
Keynes ( ): Was in favour of state intervention Cf A Tract on Monetary Reform 1924.
Keynesian techniques
Stop-go policy: in 1964 for example.

15. 3. What is monetarism? Milton Friedman.
Thatcher in the 1980s : the breakdown of post-war consensus.
“No Lame ducks”
a policy of privatisation.

16. 4. New Labour Thatcher’s legacy a sound budget
public private partnerships
independence of the Bank of England in 1997
Bank bail-outs

17. 5. The Conservatives David Cameron’s Big Society
Theresa May’s protectionist conservatism