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Objective:
The objective of this project is to train you to analyze the economy of a country using the concepts learnt in Macroeconomics. The basis of your research should be news articles(s) and the latest developments of that particular economy.

Assessment:
This group project carries a 15% weightage towards your final grade; of which, 5% will be from your submission on Padlet and 10% from your project report.

Instructions:
Based on United Kingdom, each group shall select a maximum of 3 news articles that are related to macroeconomics concepts taught so far. The articles must be dated after 31 August 2017. Please ensure that the chosen article(s) encompasses at least 3 topics with distinct economic issues that you could do your analysis on.

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1. Introduction

2. The Product of a Nation - GDP

3. Business Cycle & Unemployment

4. Inflation

5. Conclusion

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(1) On the right track. But which are your news articles that you would be using as the platform for your report? The one from Trading Economics is not considered a news article.
(2) You would need to develop your analysis further to show more depth.
(3) Incorporate a few relevant graphs, diagrams and pictures to enhance the visual impact of your Padlet wall.

(4) Please do some additional research so that your final report is not just a summary of the main points on the articles.

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UK's GDP
In a developed country like UK, the service sector is the biggest component in the economy, compromising of almost 80% of the economy. Therefore, as the service sector had grown, so will the GDP.

The large proportion of the service sector in relation to the economy is a sign of high living standards. As it enables consumers to enjoy more leisure based service activities, such as tourism, sport and restaurant.

UK GDP has grown more than expected in the 3rd Quarter of 2017. The GDP has grown 0.4% in 3 months which can be attributed to the service sector which played the largest part in the growth. The manufacturing sector also played a big part in contributing to the growth of the GDP where it has been performing badly in the previous quarters.

If these sectors continue to do well, the GDP growth will remain strong. If so,  firms will hire more workers and can afford to pay higher salaries and wages, which leads to more spending by consumers on goods and services.

Firms will also have the confidence to invest more when economic growth is strong, and investment lays the foundation for future economic growth.

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Britain's economy grows 0.4% in the third quarter of 2017, preliminary ONS estimate shows. Growth had been expected to be marginally lower at just 0.3%. Expansion was driven by the dominant services sector, which accounts for almost 80% of GDP.

LONDON - Britain's economy grew faster than expected in the third quarter of 2017, according to a preliminary estimate released by the Office for National Statistics on Wednesday morning.

GDP grew by 0.4%, the ONS said, while annual growth was 1.5%.

Prior to the release economists had forecast 0.3% growth, in line with growth in the second quarter of the year, but the data shows a small acceleration from the previous quarter.

"Growth in the third quarter continued at a similar rate as seen in the first half of the year. Services, led by increases in IT, motor trades and retail, continued to drive GDP growth. Manufacturing also boosted the economy with an improved performance after a weak second quarter," Darren Morgan, the ONS' head of national accounts said in a statement.

"However, construction output fell for the second consecutive quarter, although it remains above its pre-downturn peak."

As Morgan notes, GDP's growth in the quarter was driven by the UK's services sector, which accounts for roughly 80% of national output.

"The services aggregate was the main driver to the growth in GDP, contributing 0.29 percentage points," the ONS said.

Here's the ONS' chart, showing the quarter's GDP as part of the longer term trend:

It should be noted that these figures could still be revised higher or lower, and reflect a preliminary sample of all the data the ONS collects about the quarter.

UK GDP has now grown in 19 consecutive quarters. The last time UK GDP shrunk over a quarter was in Q4 of 2012 when the economy readjusted following a huge boost from the 2012 Olympic Games in London.

The pound jumped on the data beat, with sterling gaining around 0.3% against the dollar to trade at $1.3165, as the chart below shows:

Sterling's rise reflects the fact that better than forecast GDP should, in theory at least, make it more like that the Bank of England will increase interest rates at its November meeting next Thursday. The bank's decision is seen to on a knife edge, with some on its rate-setting Monetary Policy Committee in favour of an increase in rates from 0.25% to 0.5%, and others opposed.

"Today's numbers seem to have increased the likelihood of an interest rate rise next week, with sterling gaining almost half a cent against the dollar," Ben Brettell, a senior economist at FTSE 100 investment firm Hargreaves Lansdown wrote in an email.

"Following recent hawkish comments from the MPC, markets were already regarding a return to 0.5% as a near-certainty."

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Will Martin, Business Insider UK

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Britain's economy grows faster than expected in the 3rd quarter of 2017

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Britain's economy grows 0.4% in the third quarter of 2017, preliminary ONS estimate shows. Growth had been expected to be marginally lower at just 0.3%. Expansion was driven by the dominant services sector, which accounts for almost 80% of GDP.

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UK GDP growth rate

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Employment in UK

This is the graph for the average change of the profit growth in UK business. Take note that it might just be from profit from acquisition  but it gives us a stronger understanding of the unemployment which was due to the lack of SKILLED workers and not due to the fall in demand for worker

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UK has been experiencing continuous GDP growth throughout the years. As their GDP increases, unemployment falls as the production of more goods and services gives way to more jobs available. This may be a contributing factor to why UK has hit its lowest unemployment rate of 4.3%.
As unemployment decreases, it may seem like it is an improvement in terms of increasing purchasing power from the average households, however, from previous articles, we can see that though unemployment has fallen, however, the jobs taken by the average households are jobs that are not high paying jobs as they are not high skilled jobs. Hence as a whole, we can assume that there will not be a huge change in the purchasing power of the different households. Therefore, over the next few months to years, we can expect not much changes to the demand for the various goods and services provided.

However, we must also consider the impacts of the Brexit on the economy, it lead to a fall in investor confidence. Therefore because there is a loss in investor confidence, the investors will release all the Pounds(UK currency) into the market to reduce any losses they might sustain should they hold onto the currency. Because of the surge in supply of Pound, given that the demand for these currency does not change.The value for pounds will fall. This in turn leads to a weakening of Pound, which leads to it being more expensive to trade with trading partners from overseas but cheaper for them to trade with UK.

This lead to higher factor of production as the cost of purchasing the raw materials will  increase, leading to a cost push inflation.

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Employment in UK
Unemployment rates in UK is currently at its lowest point since 1975 at 4.3%, compared to 4.9% last year.

As UK's economy is expanding and GDP is increasing, the demand of labour will increase to meet the increase in output. This will cause an increase in employment rate as there are more jobs, which leads to a lower unemployment rate.

Additionally, the number of people in UK that are currently economically inactive is at its lowest too. This means that many people need to work due to them needing money to support themselves. Hence, although many people are holding onto jobs, many of them are holding onto lower skilled jobs

This is common in third-world countries like India where people there are working to support their daily needs.

Despite the low unemployment rate, UK has not attained its full employment rate yet. The main factors could be due to structural and geographical unemployment.

As UK is becoming more service sector based, people in the other sectors have lost jobs due to the  fast changing nature of the economy. As a result, these workers have yet to find another job as they lack relevant skills.

Meanwhile, there are geographical  immobilities making it difficult for the unemployed to move to the south of UK, where more jobs are available.

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LONDON - UK unemployment fell to its lowest level since 1975, according to data from the Office of National Statistics.

The unemployment rate fell to 4.3% in the three months to July, down from 4.4% in the previous quarter and 4.9% a year earlier.

The employment rate, which measures the proportion of people aged 16-64 in work, hit 75.3% - the highest since comparable records began in 1971.

In total, there are 32.1 million people at work in the UK, according to the figures, or 181,000 more than the previous quarter.

"Another record high employment rate and a record low inactivity rate suggest the labour market continues to be strong," Matt Hughes, a senior statistician at the ONS said.

"In particular, the number of people aged 16 to 64 not in the labour force because they are looking after family or home is the lowest since records began, at less than 2.1 million."

Here's the ONS' chart of unemployment over the longer term:

And here's the picture for overall employment:

Alongside the unemployment numbers, the ONS also said that wage growth was unchanged at 2.1%, as the UK's pay squeeze deepens. Real wage growth is falling, after inflation came in at 2.9%.

"Despite earnings rising by 2.1 per cent in cash terms over the last year, the real value of people's earnings is down 0.4 per cent," Hughes said.

Here's the chart:

The numbers will likely give the Bank of England's Monetary Policy Committee - which holds its September meeting on Wednesday, and will announce its policy decisions on Thursday - something of a headache, Rhys Herbert, a senior economist at Lloyds Bank said after the data's release.

"Today's labour market data showed the now familiar combination of a seemingly tight labour market alongside still subdued earnings growth."

"The data leaves Bank of England interest rate setters with a dilemma going into tomorrow's latest policy announcement. With headline inflation well above its target but domestic inflationary pressures seemingly still under control, most MPC members will probably content themselves for now with sounding some notes of caution rather than hiking interest rates."

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Ben Moshinsky, Will Martin, Business Insider UK

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4.3%: UK unemployment falls to 42-year low

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LONDON - UK unemployment fell to its lowest level since 1975, according to data from the Office of National Statistics. The unemployment rate fell to 4.3% in the three months to July, down from 4.4% in the previous quarter and 4.9% a year earlier.

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Unemployment rate in UK

The Unemployment Rate from the years 2009 to 2012 is gradually increasing more than the one the year 2007. However, the unemployment rate started decreasing continuously after the year 2012 till the year 2017.

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Interest Rates in UK
Over the past year, UK experienced a higher inflation rate than that expected of 2% by the relevant authorities. Therefore, we can also understand that this is due to a higher demand over supply for goods and services. We can understand that one means of accomplishing a lower level of inflation, the monetary policy employed, increasing interest rate, could be a means of solving it.

By increasing interest rate, it promotes saving as there is a higher interest rate for money that is kept in the bank as well as dissuade consumers from spending as the opportunity cost of spending is higher. Hence as consumption falls, Aggregate demand falls, leading to a lower consumer price index and a lower inflation rate

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U.K. interest rates are doing something they haven't done in a decade: Going up.

The Bank of England hiked its key rate on Thursday from a record low of 0.25% to 0.5%, a shift that economists widely expected.

It's the first time the central bank has increased the cost of borrowing since 2007, a move it says was needed to help control surging inflation.

The pound was trading 1% lower against the dollar following the announcement.

Britain's economy has struggled to move out of first gear following the Brexit referendum in June 2016. Unemployment has continued to fall, but a sharp drop in the value of the pound has hurt consumers by making imported goods more expensive.

Wages have also been squeezed and the housing market has slowed.

Higher interest rates will benefit savers, who have for years seen paltry returns on their deposits. But it will also make borrowing and mortgages more expensive for consumers who are already facing tighter household budgets.

"It has been a long 10 years since the base rate last went up, so today represents the first time many U.K. borrowers will have ever experienced an increase in their mortgage payments," said Simon Gammon of Knight Frank Finance.

Some analysts worry that hiking rates will put consumers under more pressure and could cause economic growth to slow further.

The rate increase is a sign, however, that rising prices outweigh other concerns inside the Bank of England. At 3%, inflation is firmly above the central bank's official 2% target, and a rate hike would help cool things down.

The Bank of England said in a statement that it expects inflation to diminish over the next year.

"The bank is on a tightrope, it wants to dampen down inflation and consumer borrowing without knocking out the U.K. consumer," said Ian Stewart, chief economist at Deloitte.

The central bank also noted that effective monetary policy won't be enough to counteract the negative effects of Brexit.

"Monetary policy cannot prevent either the necessary real adjustment as the U.K. moves towards its new international trading arrangements or the weaker real income growth that is likely to accompany that adjustment over the next few years," it said.

Governor Mark Carney said the central bank was hoping to ensure that, regardless of how Brexit negotiations turn out, the financial system remains secure and prices stay under control.

Related: Why business is beginning to panic about Brexit

U.K. interest rates remain at very low levels despite the hike. As recently as 2007, the key rate had been set at 5.75%.

The central bank indicated that rates are likely to stay relatively low, saying that future increases "would be expected to be at a gradual pace and to a limited extent."

David Cheetham, chief market analyst at trading firm XTB said the bank's "cautious comments" suggest "that this is a case of one-and-done rather than the start of a sustained hiking cycle."

Carney said the bank's approach could change if households and businesses start to panic over Brexit.

"What matters to us is what people think is going to happen, and how they react to that," he said.

This is the first rate hike from Carney. He joined the Bank of England in 2013 after a stint leading Canada's central bank.

CNNMoney (London) First published November 2, 2017: 8:03 AM ET

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U.K. interest rates hiked for first time in 10 years

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The Bank of England hiked its key rate on Thursday from a record low of 0.25% to 0.5%, a shift that economists widely expected. It's the first time the central bank has increased the cost of borrowing since 2007, a move it says was needed to help control surging inflation.

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Graph Description of UK Inflation