Macroeconomics: UK economy, IB Economics
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March 25, 4:18 AM
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UK inflation rate remained at 3% in February

UK inflation rate remained at 3% in February | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - March 25, 3:08 AM
The speed of price rises in the UK has stayed the same, according to data which was collected before the US-Israel war with Iran began.
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Graham Watson's insight:

The calm before the storm, with inflation in February staying at 3%, although it's not going to be there for long, with one bus company noting that there costs have risen 20% since the start of the Iran conflict. 

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Macroeconomics: UK economy, IB Economics
Economy
A brief overview of relevant articles for IB and A-Level all relating to the UK economy
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Today, 4:32 AM
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UK house prices fall as Iran war uncertainty dampens demand

UK house prices fall as Iran war uncertainty dampens demand | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - Today, 3:34 AM
Mortgage rates have been rising and hundreds of the cheapest deals have disappeared over the last month.
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Graham Watson's insight:

I would extrapolate from the housing market to the wider macroeconomy: uncertainty isn't good for anyone. However, I think that the factors contributing to weaker demand in the housing market also reflects domestic factors, as well as the global economic environment. 

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April 7, 1:49 AM
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UK manufacturers ‘will pay £940m a year more in business rates due to Reeves changes’ | Business rates | The Guardian

UK manufacturers ‘will pay £940m a year more in business rates due to Reeves changes’ | Business rates | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - April 7, 1:00 AM
Government should look at ways to help as firms are paying disproportionate bills, says MakeUK
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Graham Watson's insight:

Manufacturers representatives, MakeUK, claim that their members will have to pay an extra £940m in business rates as a result of changes in the levy made by the Chancellor. It's a headline grabbing figure - I'd love to see how it's calculated - but it is part of a wider attack on business rates. MakeUK argue that factory floors are large. by definition, and that as a result their members are more heavily taxed than service sector providers and that this is unfair. 

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April 5, 4:20 AM
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Trussonomics still haunts parties’ economic promises in run-up to UK local elections | Phillip Inman | The Guardian

Trussonomics still haunts parties’ economic promises in run-up to UK local elections | Phillip Inman | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - April 4, 11:00 AM
Greens, Reform UK, Your Party, Conservatives and even Lib Dems are making extravagant spending pledges
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Graham Watson's insight:

Not much in the way of theory, but this Phillip Inman article looks at the spending plans of the political parties in the run-up to the local elections in May; interestingly, the only party seeming to show restraint in this regard is the Labour Party. 

 

How odd...

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April 2, 7:02 AM
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Trump’s trade war put the UK on the back foot. His actual war may break us | Larry Elliott | The Guardian

Trump’s trade war put the UK on the back foot. His actual war may break us | Larry Elliott | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - April 2, 3:00 AM
The government looks ill prepared for the coming stagflation storm – its ‘keep calm and carry on’ approach won’t survive a blast of reality, says Guardian columnist Larry Elliott
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Larry Elliott looks at the macroeconomic implications of the ongoing supply-side shock for the UK. We're about to experience a bout of stagflation as a result of higher oil prices filtering into all sorts of other markets - notably energy and food - and he doesn't think that we're well placed to deal with it. 

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March 27, 12:37 PM
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UK car production falls 17% as industry warns of ‘worrying’ decline | Automotive industry | The Guardian

UK car production falls 17% as industry warns of ‘worrying’ decline | Automotive industry | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - March 27, 7:59 AM
Weak demand and global trade pressures hit ouput, with energy price rises expected to bring further drop
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Graham Watson's insight:

Aside from the ongoing Iran crisis, this might be the most significant economic news of 2026. The Society of Motor Manufacturers and Traders have reported that the number of vehicles being produced in the UK last month was down by 17% on the same period in 2025.

 

This is definitively bad news: the UK exports over 80% of the cars that it makes and is one of our largest export earners. If car manufacturing were to decline it would have significant implications for both economic growth and create significant structural unemployment. 

 

Worse news? These figures pre-date the Iran conflict which has the potential to accentuate this decline: not least because JLR have already announced that they are going to pause some production for the next fortnight. 

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March 27, 4:38 AM
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Rachel Reeves urged to raise taxes on companies profiting from war on Iran | Tax and spending | The Guardian

Rachel Reeves urged to raise taxes on companies profiting from war on Iran | Tax and spending | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - March 26, 4:00 PM
Charities say energy companies, banks and defence companies stand to benefit from the economic fallout
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There are calls for the government to tax those firms that are likely to profit from the Iran war, with energy companies, banks and defence companies likely to gain at consumers' expense. 

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March 26, 6:27 AM
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UK forecast to face weaker growth and higher inflation from Iran war

UK forecast to face weaker growth and higher inflation from Iran war | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - March 26, 6:00 AM
The OECD downgrades forecasts for many of the world's biggest economies due to the US-Israel war with Iran.
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Graham Watson's insight:

Thank heavens for the OECD: without them, I don't think I'd be able to forecast that the UK is going to face lower economic growth and higher inflation as a result of the Iran war, but now that they've published an updated growth forecast, I'm reassured. One for the "That's Why They Earn the Big Bucks" file.

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March 26, 4:35 AM
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British suppliers to be prioritised for contracts in sectors vital to national security | Steel industry | The Guardian

British suppliers to be prioritised for contracts in sectors vital to national security | Steel industry | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - March 25, 8:01 PM
Policy brought forward as Middle East war highlights fragility of global supply chains
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Graham Watson's insight:

Another form of intervention and, a form of protectionism too, with the government looking to British suppliers to ensure that contracts essential to national security will be fulfilled. This means that UK based steel manufacturers, shipbuilders, energy infrastructure and AI will be prioritized in the weeks ahead. 

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March 25, 8:16 AM
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Europe could face Iran war fuel rationing by April, says Shell boss | Energy industry | The Guardian

Europe could face Iran war fuel rationing by April, says Shell boss | Energy industry | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - March 25, 6:40 AM
Wael Sawan says energy shortages on way if strait of Hormuz does not reopen to oil and gas shipping
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Graham Watson's insight:

I'm not sure where to put this - a shortage of oil is normally associated with a lack of supply at a given price. However, in this case a shortage might actually equate to a lack of supply at any price, something we haven't experienced since successive OPEC crises during the 1970s. 

 

It would have catastrophic effects on the global economy, tipping us into recession. 

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March 25, 4:18 AM
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UK inflation rate remained at 3% in February

UK inflation rate remained at 3% in February | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - March 25, 3:08 AM
The speed of price rises in the UK has stayed the same, according to data which was collected before the US-Israel war with Iran began.
Read more
Graham Watson's insight:

The calm before the storm, with inflation in February staying at 3%, although it's not going to be there for long, with one bus company noting that there costs have risen 20% since the start of the Iran conflict. 

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March 24, 10:06 AM
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The UK sleepwalked into this energy price shock | Nils Pratley | The Guardian

The UK sleepwalked into this energy price shock | Nils Pratley | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - March 23, 3:45 PM
Many of the decisions predate this government but the notion that Britain was better prepared for this crisis is fanciful
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Graham Watson's insight:

And Nils Pratley looks at the preparedness of the UK economy for the ongoing energy price shock, highlighting the fact that not only are we still heavily dependent upon fossil fuels, but that our dependence on imported energy is also high. 

 

As he points out "Energy transition takes time".

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March 23, 11:48 AM
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UK mortgage interest rates expected to rise despite Trump’s Iran pause | Interest rates | The Guardian

UK mortgage interest rates expected to rise despite Trump’s Iran pause | Interest rates | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - March 23, 9:48 AM
Bank of England likely to make two quarter-point increases amid sustained rise in inflation, investors believe
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Graham Watson's insight:

And the effects of the wear are already being felt in the mortgage market, with lenders pulling a number of fixed rate deals and financial markets now expecting four interest rate rises in the months ahead in trying to overcome the anticipated inflation of the next few months. 

 

Bear in mind that at the start of the year, analysts were expecting interest rate cuts. 

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March 23, 11:41 AM
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HS2 trains could run slower than planned to save money

HS2 trains could run slower than planned to save money | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - March 23, 7:08 AM
The government is looking at ways to make much-delayed London to Birmingham railway line cheaper to deliver.
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Graham Watson's insight:

I almost had to check if it was 1 April with this story - however, it appears that HS2 is going to be more expensive, arrive later than expected and now at a slower speed than was previously the case, with the news that the government is considering seeing whether or not a slower speed on the line could save money.

 

Another nail in the coffin of a project that has struggled to justify its existence - and longer journey times won't improve any cost-benefit analysis associated with it.  

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April 7, 8:55 AM
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Struggling families like mine don’t talk about the cost of living any more – now it’s the cost of survival | Ella Michalski | The Guardian

Struggling families like mine don’t talk about the cost of living any more – now it’s the cost of survival | Ella Michalski | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - April 6, 9:00 AM
Trying to make ends meet is an impossible effort, and things are rapidly getting worse. It’s time the government listened to people like us, says Ella Michalski of Changing Realities, a project working with low-income families
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An anecdotal account of what it's like facing the current cost of living crisis from someone living in relative poverty. Ella Michalski, part of a project called Changing Realities details what it's really like, noting that whilst the scrapping of the two-child benefit child offers some relief, for families like hers the daily reality is of a struggling to survive, She also highlights a need to continue to reform Universal Credit. 

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April 6, 4:41 AM
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'It's a massive help': Benefits and pensions rise as two-child cap ends

'It's a massive help': Benefits and pensions rise as two-child cap ends | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - April 5, 7:00 PM
Families on some benefits with three or more children will get an average rise of £4,100 a year.
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Graham Watson's insight:

Today sees a number of changes to the benefit system - the scrapping of the two-child benefit cap, a rise in the state pension of 4.8%. The former is a significant move because families with three or more children will see an average rise in their income of £4,100 at a time when a cost of living is on the horizon. 

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April 3, 2:27 AM
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UK firms expect to raise prices more quickly as Iran war pushes up costs | Business | The Guardian

UK firms expect to raise prices more quickly as Iran war pushes up costs | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - April 2, 7:41 AM
Bank of England survey in March shows chief financial officers foresee 3.7% increase over coming year
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Graham Watson's insight:

Bank of England data suggests that prices are going to rise rapidly in the wake of the Iran conflict - with its officers expecting prices to go up by 3.7% over the course of the year. That's why they earn the big bucks, folks. 

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March 28, 3:01 AM
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UK government borrowing costs hit 5% as Iran war fuels bond market sell-off | Government borrowing | The Guardian

UK government borrowing costs hit 5% as Iran war fuels bond market sell-off | Government borrowing | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - March 27, 12:59 PM
Yields on 10-year debt reach highest since the 2008 financial crisis, raising concerns of faster interest rate rises

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Graham Watson's insight:

Something to keep your eye on next week; 10-year bond yields on UK government debt have risen above 5%, which will increase borrowing costs. This has an obvious opportunity cost, with debt interest repayments already the 4th largest component of government spending.

 

This is also important because it seems to be the case that the market perception is that the UK will continue to have higher borrowing costs unless the monetary authorities are seen to be extra keen to drive inflation back to target, which might mean that interest rates are going to go back up again. 

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March 27, 6:59 AM
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Consumer confidence hit by 'ripple of fear' over Iran war

Consumer confidence hit by 'ripple of fear' over Iran war | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - March 27, 6:02 AM
A key survey indicates growing doubt among shoppers over prospects for the UK economy in the next year.
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Graham Watson's insight:

Here we go, the second successive survey finding that consumer confidence has fallen since the start of the Iran war. This time it's the GfK Consumer Confidence Barometer for March, leading one commentator, Ashley Webb of Capital Economics, to suggest that "The decline in GfK consumer confidence in March... is probably the start of a bigger fall and suggests real household spending growth will soften in 2026,"

 

Bad news for economic growth. good news for the "That's Why They Earn the Big Bucks" file. 

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March 26, 6:31 AM
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Middle East conflict will damage UK’s economy ‘more than any other’ | Economic growth (GDP) | The Guardian

Middle East conflict will damage UK’s economy ‘more than any other’ | Economic growth (GDP) | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - March 26, 6:00 AM
Organisation for Economic Cooperation and Development says UK economy will grow by just 0.7% this year
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Graham Watson's insight:

Maybe I went too soon - I should have added the coda that the Iran war will damage the UK's economy "more than any other", according to the OECD. Other European economies are more insulated from energy price shocks triggered by the supply-side shock. 

 

And as for the notion of the "technical assumption" that "the current extent of energy market disruption moderates over time, with oil, gas and fertiliser prices declining gradually from mid-2026 onwards", I can't understand why that's a technical thing. Surely it's also a not unreasonable assumption? 

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March 26, 4:44 AM
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No escape from the energy shock for UK business. A long-term strategy is still essential | Nils Pratley | The Guardian

No escape from the energy shock for UK business. A long-term strategy is still essential | Nils Pratley | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - March 25, 2:59 PM
Latest crisis is yet another reminder that reset in industrial policy is needed, including a more strategic one for energy
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Graham Watson's insight:

Nils Pratley writes in the Guardian about how the current Iran conflict might allow for a reset in relation to the role of industrial policy in the UK, not least for energy intensive industry. The view that high energy costs are holding back British industry is gaining traction; I wonder if we'll reflect on previous policy decisions and think that we were slow on the uptake as far as renewables are concerned? 

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March 26, 4:31 AM
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UK consumer confidence has ‘collapsed’ during Iran war, retail industry says | Retail industry | The Guardian

UK consumer confidence has ‘collapsed’ during Iran war, retail industry says | Retail industry | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - March 26, 2:00 AM
BRC survey finds public even more pessimistic about finances as higher energy prices fuel inflation fears
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Graham Watson's insight:

An initial British Retail Consortium survey has shown the extent to which consumer confidence has collapsed, presumably leading to significant reductions in consumer spending and economic growth. Obviously, the first sector to notice this is likely to be retail, because product markets tend to be based on forward buying, and thus uncertainty takes time to feed through into market activity. 

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March 25, 5:44 AM
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UK inflation: What is the rate and why are prices still rising?

UK inflation: What is the rate and why are prices still rising? | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - January 14, 2011 12:34 PM
UK Inflation has dropped back from record highs but remains above the Bank of England's 2% target.
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A very, very basic primer about the current state of UK inflation...

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March 24, 3:36 PM
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What levers could Rachel Reeves pull to help with rising prices? | Economics | The Guardian

What levers could Rachel Reeves pull to help with rising prices? | Economics | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - March 24, 11:35 AM
What the chancellor could do to counter the economic impacts of Iran war, from stopping price gouging to cancelling fuel duty rises
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Graham Watson's insight:

This Guardian article looks at the potential for government intervention to head off the worst effects of the ongoing Iran crisis. It looks at all sorts of things - directly protecting some consumers from some costs, ensuring that dominant firms don't exploit consumers, cancelling a proposed increase in fuel duty, potentially negotiating closer links with the EU and accelerating the green transition.  

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March 24, 10:03 AM
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UK manufacturers hit by sharpest rise in cost inflation since Black Wednesday in 1992 | Manufacturing sector | The Guardian

UK manufacturers hit by sharpest rise in cost inflation since Black Wednesday in 1992 | Manufacturing sector | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - March 24, 7:34 AM
PMI figure reveals impact on economy of rise in oil prices driven by Iran war
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Graham Watson's insight:

This should be your starting point for AD-AS analysis of the current predicament facing the UK economy, with the latest PMI data suggesting that costs are rising at their fastest level since Black Wednesday in 1992.

 

That should be able to get you thinking about the impact on macroeconomic objectives starting by looking at the size, causes, and likely consequences. 

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March 23, 11:45 AM
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Starmer says ‘every lever’ will be explored to ease rising costs of living from Iran conflict | UK cost of living crisis | The Guardian

Starmer says ‘every lever’ will be explored to ease rising costs of living from Iran conflict | UK cost of living crisis | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - March 23, 10:13 AM
PM will chair Cobra meeting with key ministers and Bank of England on Monday, as experts warn of economic shock
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Graham Watson's insight:

Not much in the way of theoretical content, more of an overview of the prospect of the government having to intervene to keep the cost of living down as the result of the Iran war. However, there's a COBRA meeting this afternoon, involving both the government and the Governor of the Bank of England. 

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