The UK economy

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  • UK economy
    • 1979
      • Thatcher came to power - monetarism (changes in the money supply to affect economy)
      • Winter of discontent
      • £ had appreciated due to North sea oil production and hot money inflows from high interest rates
      • High inflation - mortgage repayments were increasing, and AD was falling
    • The 1980s   the Lawson Boom
      • Nigel Lawson - chancellor of the Exchequer
      • Trade deficit / high inflation / housing boom and economic expansion
        • Thought it was sustainable due to recovery of industrial output
        • Credit driven boom
      • Increase in privatisation
    • 90s and 2000s NICE period
      • Overheated economy 'bust' in early 90s
        • Exited the ERM in 92'
        • House prices fell 1990-1950 due to increased interest rates
      • BoE was made independent of government with monetary Policy committee created to set interest rates in 1997
        • Expectation of stable inflation rates- led to non inflationary,constant expansion period
      • Growing gap between services and manufacturing
      • Immigration- cheap labour and high supply
    • 2008 onwards
      • Bad bank lending decisions - low savings and high spending - high personal debt
      • High national debt - decline of manufacturing industry


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