In the News Teaching Activity – the UK economic trends 2010-24, success or failure? (June 2024)

The Institute of Fiscal Studies (IFS) have put together their report on the key economic trends since 2010 – have things gone as well as they could have done, given the difficult economic headwinds?

There have been several negative shocks to the economy since the global financial crisis and, while we will never know the counterfactual for sure, the economic data suggests that things have not gone well for the UK economy between 2010 and 2024. The UK’s economic growth has been slow, affected by a poor record of both productivity and investment growth. While employment has done well, real average earnings have not, fuelling a feeling that the standard of living has not improved for many in a discernible way for this period. There have been some significant international headwinds for the UK – the global financial crisis, the pandemic and the energy price shock. Austerity knocked public sector investment and Brexit may well have added to the pain... Public finances are again in a poor state despite a high tax burden. Income per capita has been largely flat – had the economy grown at its pre-GFC rate, GDP per person would be almost £11,000 higher than it actually is. The IFS report is detailed and has some revealing charts supporting its key findings.

The Conservatives and the Economy, 2010–24 | Institute for Fiscal Studies (ifs.org.uk)

1 Explain how poor productivity growth slows GDP per capita growth. Use Figures 2.1 and 2.3 to support your ideas.

2 Discuss the importance of strong private and public sector investment in an economy such as the UK.

3 Read the conclusion of the IFS Report (Section 6.0). To what extent do you agree that ‘The period between 2010 and 2024 has been extraordinary from an economic point of view’?