Analysis of the GDP Growth in United Kingdom During the 2019

Gross Domestic Product, or GDP, is the total market value of goods and services produced in a country during a given time period. Economists use GDP to measure a country’s economy to see how well they are doing. There are different types of GDP measurements like nominal GDP which measures the raw data (Chappelow 2019).

Another is real GDP, which takes into consideration inflation rates and takes out inflation rates in the calculation; this allows the comparisons of previous years to the current year. There is also GDP growth rate which is how much the GDP has decreased or increased and also GDP per capita, which measures the GDP per person in a countries population. The way GDP works for measuring a countries economy, is when the producers sell more goods or services to consumers in other countries than the domestic consumers buy from other countries producers, it causes an increase in GDP. The opposite can be said for a decrease (Chappelow 2019).

I have chosen to discuss the GDP growth rate of the United Kingdom. I chose to do GDP because I wanted to learn more about it and understand the concept behind one of the measurements for a country’s economy. I decided to do the United Kingdom because I have family that live in England. They had been talking about the economy could be heading into a recession so I thought this would be a perfect topic to discuss considering we learned about GDP in class.

During the United Kingdom’s second quarter in its economy, the GDP growth rate decreased. This led to experts believing it was “sliding into its first recession in a decade” (Elliot 2019). The cause of this they believe is Brexit, which is set in place to take effect on October 31 if not delayed again. Brexit is the term used for the UK leaving the European Union. Although the GDP growth rate declined during the second quarter, the third quarter brought along “a stronger-than-expected and across-the-board 0.3% increase in activity in July” (Elliot 2019).

During the month of July, the utilities industry in the UK, which is responsible for roughly 80% of the GDP, increased by 0.3%, while the competing production and building industries also rebounded, with increases of 0.8% combined (Elliot 2019). A former Bank of England deputy governor, Sir Charlie Bean, said he believed it was 'highly unlikely' that the UK economy would continue to decrease in the third quarter. “Speaking to MPs on the commons Treasury committee, he said the fall in GDP in the second quarter was ‘affected by unusual circumstances around the original Brexit date’, such as the closure of car plants” (Elliot 2019).

In conclusion, GDP is a very common measurement for an economy within a country. There are different ways to use GDP, such as growth rate, GDP per capita, nominal GDP, and real GDP. Each of these are used in a combined measurement to properly get an idea of how a country is doing or an industry. This article explained the UK’s GDP well when describing the change within the last two quarters and the effect it has.