Managing the Macroeconomy - Construction Economics: A New Approach - page 203

consumer price index (CPI) is monitored on a monthly basis. A sample of annual
CPI statistics for the UK economy is presented in Table 12.1. As the table shows,
up until recently, the general trend has been around 2 per cent, and this is regarded
as encouraging, not as an end in itself but due to its significance in meeting all
other government objectives. Price stability is so central to understanding modern
macroeconomic management that we present a full explanation of its measurement
and its impacts upon business expectations in Chapter 14 .

Table 12.1 UK macroeconomic statistics

There are various sources for this data, we have used the Office for National Statistics
website (see the ONS web review on page 30). Three points need to be emphasised,
economic data is subject to revision, it is calculated in different ways by individual
nations, and proper comprehension relies on footnotes.

1995 2000 2005 2007 2011

Inflation 1

2.6 0.8 2.1 2.3 4.5

2.3 1.0 0.9 0.9 1.5

Unemployment 2

Economic
growth 3
Balance of
payments 4

2.8 3.1 2.7 2.5 0.7

-8.5 -24.8 -31.0 -57.8 -27.8

Notes: 1 Consumer prices (percentage increase on previous year)
2 Claimant unemployment (annual average, in millions)
3 Annual percentage increase in real GDP
4 Current account (total for whole year, £ billions)

Full Employment
Full employment does not mean that everybody of working age is employed, as
in any dynamic economy some unemployment is unavoidable. For example, there
will always be individuals moving in and out of employment, as they change from
one job to another, and there will always be seasonal, technological and overseas
factors that cause fluctuations in the jobs available in different sectors. Problems
arise, however, when there are large numbers of unemployed for long periods of
time; as a large pool of unemployed labour represents wasted resources. It also has
many costs, not just in terms of loss of output but also in terms of human suffering
and loss of dignity. All governments record the number of workers without a job,
although the precise way this is measured changes from time to time. At present
'official' unemployment in the United Kingdom is estimated by the number of
people registering for Jobseeker's Allowance - known as claimant unemployment .
Unemployment is either expressed as a percentage rate - the number of claimants
as a percentage of the total workforce of 31 million - or as an absolute number.
The unemployment rate has been below 10 per cent for over a decade, with
unemployment reaching a high of approximately 2.3 million in the mid 1990s.