In this blog you’ll find again some news articles relating to economic issues. Try to read the articles critical, with in the back of your mind the economic theory and the effects not only now, but also for the years to come.
It probably wasn’t a surprise for many, but the UK entered a recession after negative growth in GDP during the first 2 quarters of 2020. Many other countries went into a recession too, but as you can read in this article, the fall in GDP has been relatively severe in the UK. Also, the effects for ordinary people and businesses are mentioned.
A recession does not always increase unemployment immediately, it has delayed effect. During COVID-19 there has been a fall in UK payrolls, but because of the furlough scheme the unemployment rate has not increased a lot. In the article you can read that especially young people have been hit hard in the job market. I hope most of you can’t relate to that, but these changes in the job markets has and will have effect many people.
A bit surprising was the increase in inflation rate in July compared to June. The common measure of inflation is the Consumer Price Index, but another measure is the Retail Price Index, which increased with 1.6% in July. In June the RPI was 1.1%. This increase will probably effect many of you, as the rail fares are linked with the RPI in July. The article writes about different aspects of the potential increase in fare prices.
The next article is probably not yet relevant to you, as the topic is buying your first house. The reason I’ve added this article is it highlights that economic changes influence many factors and that it is not straightforward to analyse what the outcome will be.
With COVID-19 and the recession occuring, we could forgot that Brexit is happening too. At the end of this year, the changes because Brexit will become more visible. Changes, which are at the moment still unknown. The last article about a free trade zone in the north of Scotland writes about some consequences for the area, however, they are not necessary positive.