Navigating numbers: Business, industry and trade (PowerPoint)

Explore economic relationships between the UK and other countries, the influence of multinational corporations and consumer trends using the World Trade Explorer and trade related datasets.

1. 2 Contents The UK economy The ONS’s findings The ONS’s tools and datasets

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3. 4 An economy is a system of making and trading things of value. It is usually divided into goods and services. To function well, economies need a medium of exchange, which in the modern world is a system of finance. The UK economy is typically considered a social market economy. This is a model that combines: a free-market capitalist economic system s ocial policies, for example the welfare state r egulations about fair competition within the market

4. 5 How to tell if an economy is doing well Gross Domestic Product (GDP)   This is a measure of all the goods and services produced in a country over a period of time, for example, a year. An increase in GDP means the economy is growing. Inflation   This is the pace at which prices in shops rise. The government considers anything above or below 2% undesirable. Unemployment Unemployment figures show how many people want to work but cannot find a job. A lower rate of unemployment indicates that the economy is doing well. Inequality When a country’s wealth and prosperity is distributed unevenly. Economists tend to see high inequality as a sign of an ‘unhealthy’ economy.

5. 6 The ONS calculates a number of economic indicators, such as GDP, inflation rate and unemployment rate These indicators and many more help to measure levels and changes in the size and structure of different economies, and identify growth and contractions, guiding decision-making.

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7. 8 Calculating Gross D omestic P roduct (GDP) GDP is a measure of the value created through the production of goods and services in a country during a certain period. Three main ways to calculate GDP Output approach – This approach uses the value of all goods and services minus inputs and raw materials. Income approach – This approach uses the incomes of all individuals and businesses within the country . Expenditure approach – This approach uses the spending on final goods and services by households, businesses and government.

8. 9 UK GDP There is different data content and quality available. For example, there are more data available on output in the short term than income or expenditure. For monthly figures, the ONS combines estimates from all three approaches to produce an average. But in the final two quarters of the year, the output data is given more weight in the estimate as there is more data available.

9. 10 GDP and me GDP is part of our everyday life, we all play a part by spending money, making money and producing things. Explore how different variables affect GDP using this useful visual. GDP and Me.

10. 11 Consumer trends The consumer trends data are useful components of the expenditure measure of GDP – they cover what households spend their money on. Consumer trends, UK: July to September 2023

11. 12 Calculating inflation The rate of inflation is the change in prices for goods and services over time. Because inflation is a calculation of the increase in price of so many different goods and services, it is calculated using an index – a composite statistic. The most common way to calculate inflation in a country is to take the average weighted cost of a basket of goods and services, including food and energy, each month. Then divide it by the same basket from a previous month.

12. 13 UK inflation The Consumer Prices Index including owner occupiers' housing costs (CPIH) is the most comprehensive and headline measure of inflation produced by the ONS.

13. 14 Calculating unemployment Unemployment is typically represented as the unemployment rate calculated as a percentage. You can do this by dividing the number of unemployed people by the total number of economically active people, then multiplying by 100. Economically active people include those who are employed or unemployed and seeking employment.    The number of unemployed people in the UK is measured by the Labour Force Survey (LFS). UK unemployment

14. 15 Calculating retail sales The Retail Sales Index (RSI) is compiled using data from the Monthly Business Survey. These data are collected from: a sample of approximately 5,000 retailers across Great Britain all large retailers and a representative sample of smaller businesses The sample represents 2.5% of businesses but around 75.6% of all known turnover. Retailers provide total retail turnover, including sales from stores via the internet, mail orders, stalls and markets, door-to-door and telephone sales.

15. 16 UK retail sales

16. 17 International perspective According to 2022 World Bank stats, the UK is the: 6 th largest national economy by nominal GDP 9 th largest by purchasing power parity (PPP) 4 th largest exporter 4 th largest importer

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18. 19 World trade explorer Use our interactive tool to explore UK trade relationships with the rest of the world. Select a country by using the dropdown or hovering over the map and see total UK trade with that country broken down by goods and services.

19. 20 Glossary Economy - The production, distribution and exchange of goods and services. Gross Domestic Product (GDP) - a measure of the size and health of a country’s economy over a period of one quarter or one year.