Jump to content
House Price Crash Forum

Size Of Uk Economy


Recommended Posts

0
HOLA441
1
HOLA442

Does anyone know the size of the UK economy (for comparison against consumer debt)?

Answering my own question but hopefully someone will find something more up to date.

For the end of 2003 (so two years out of date)

Overall size

The UK economy is the world's fourth largest. Gross Domestic Product (GDP) was almost US$1.8 trillion in 2003 (equivalent to around £1.044 trillion sterling at December 2003 prices). Only the economies of the USA, Japan and Germany are larger.

The UK's people are the world's twelfth richest (Discuss). The World Bank estimated the mean annual income for a British subject as US$28,350 (or £16,443 sterling at December 2003 prices) in 2003. The Channel Islands, which were listed separately by the World Bank were ranked ninth richest and Eire fourteenth.

The UK was worth £5.3 trillion at the end of 2003. Housing represents over £3 trillion of these assets.

The UK national debt as at the end of 2003 - the last date for accurate(ish) figures was £437.4 billion

Debt in the UK stands at £1,148bn, 83% of which is in the form of mortgages.

Unfortunately the following link is confusing me as they refer to both £1 trillion of debt and £1 billion.

Consumer Debt in 2004

So is a trillion the same as a billion?

If it is then we have consumer debt equal to the size of our economy and equalling 1/5 of the value of this country's assets.

Worryingly though three fifths of this country's assets are described as housing.

On what basis is the housing in this country worth £3 trillion?

After all if we have around £1 trillion of debt which is mortgages then that kind of suggests that two thirds of the UK population own their own homes outright and I'm sure that's not right.

I just think that if we want to know how bad this bubble is, we need to agree on some basic statistics and how they're worked out.

Looking at the figures above I think that must surely frighten the hell out of even the most assured property bull, surely?

Edited by underpressuretobuy
Link to comment
Share on other sites

2
HOLA443
3
HOLA444
4
HOLA445
5
HOLA446

So is a trillion the same as a billion?

No

1 billion is 1000 times a million (1,000,000 or 10^6) ie 1,000,000,000 or 10^9

In most english speaking countries including the states a trillion is 1000 billion, ie 1,000,000,000,000 or 10^12

However, just to confuse, in the "good old days" we in the Uk (and I think Australlia and New Zealand too) took a trillion to mean a million billion, ie 1,000,000,000,000,000,000 or 10^18.

Now days I think the american definition is more popular, and hence in mordern texts a trillian is thousand billion.

Here endth the lesson ;)

Link to comment
Share on other sites

6
HOLA447

Wonder what position we will hold in 3-5 years time, any bets?

This is what I don't understand.

If our economy is the fourth largest in the world but the same size as our consumer debt burden then surely one cancels the other out and we have a miniscule economy.

Or is that not how it works?

The same goes for the United States and their debt problems.

I've often wondered - on what basis is the UK such a big, important economy?

If I understood how we managed to get to fourth place in the world, I might be able to offer a prediction about where we would be in 3 or 5 years time - by rights probably languishing somewhere behind Mongolia.

Link to comment
Share on other sites

7
HOLA448

According to those, China and India have already ovetaken us

1 World $ 55,500,000,000,000 2004 est.

2 United States $ 11,750,000,000,000 2004 est.

3 European Union $ 11,650,000,000,000 2004 est.

4 China $ 7,262,000,000,000 2004 est.

5 Japan $ 3,745,000,000,000 2004 est.

6 India $ 3,319,000,000,000 2004 est.

7 Germany $ 2,362,000,000,000 2004 est.

8 United Kingdom $ 1,782,000,000,000 2004 est.

9 France $ 1,737,000,000,000 2004 est.

10 Italy $ 1,609,000,000,000 2004 est.

So that would now put us in 6th place. Looking down the list there doesn't appear to be too many other snapping at our heals. I wonder if france and Italy will overtake us though....not through well running of their economies but through relegation via Prudences policies.

Link to comment
Share on other sites

8
HOLA449

This is what I don't understand.

If our economy is the fourth largest in the world but the same size as our consumer debt burden then surely one cancels the other out and we have a miniscule economy.

Or is that not how it works?

The same goes for the United States and their debt problems.

I've often wondered - on what basis is the UK such a big, important economy?

If I understood how we managed to get to fourth place in the world, I might be able to offer a prediction about where we would be in 3 or 5 years time - by rights probably languishing somewhere behind Mongolia.

1 trillion per annum

So we'd only have to sacrifice one year of economic output to pay it off.

Link to comment
Share on other sites

9
HOLA4410
10
HOLA4411
11
HOLA4412
Guest wrongmove

So as a nation, we have a 1x income mortgage to service, plus about 6 weeks income in unsecured debt.

This is big, but I doubt it means we are at the edge of bancrupcy just yet.

Of course if the nominal value of the housing stock falls significantly......

Edited by wrongmove
Link to comment
Share on other sites

12
HOLA4413

So is a trillion the same as a billion?

It is, if you're Gordon Brown.

After all if we have around £1 trillion of debt which is mortgages then that kind of suggests that two thirds of the UK population own their own homes outright and I'm sure that's not right.

Not everyone has bought their house in the last 4-5 years, that figure goes to show how much housing has risen over recent years, if you bought a house with a £100k mortgage 10 years ago then according to the asset balance it may now be worth £300k, but of course you still only owe £100k (excluding whatever's paid off).

To a lot of home owners a crash wouldn't matter if they haven't bought recently, if anything it would make larger houses comparatively cheaper.

Edited by BuyingBear
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.




×
×
  • Create New...

Important Information