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Selected European comparisons of UK economic well-being

Released: 30 September 2015 Download PDF

Abstract

This article discusses international comparisons of the UK against other selected OECD European countries based on the OECD dashboard indicators, with data ranging from Q1 2007 to Q1 2015. The analysis compares the UK to France, Germany, Spain, Italy, Greece and the OECD total.

Introduction

On 15 September 2015, the Organisation for Economic Co-operation and Development (OECD), published a dashboard of indicators for households in OECD countries to facilitate comparison of economic well-being. This note, published alongside the latest ONS quarterly economic well-being release draws out some important comparisons.

More specifically, this article discusses international comparisons of the UK against other selected OECD European countries based on the OECD dashboard indicators, with data ranging from Q1 2007 to Q1 20151. The analysis compares the UK to France, Germany, Spain, Italy, Greece and the OECD total.

For further information on the OECD release, visit the OECD household statistics dashboard.

For further information on UK economic well-being, visit the latest UK economic well-being release.

Notes for Introduction

  1. Note that percentage changes are calculated on index numbers to 2 decimal places from the OECD website and not calculated from source data.

Main points

  • Between Q1 2014 and Q1 2015 UK GDP per capita grew 2.2% – faster than Germany, France and Italy but slower than Spain. In Q1 2015 UK GDP per capita was 6.8% above its low point in Q3 2009.

  • Between Q1 2014 and Q1 2015 UK’s household disposable income per capita grew 3.9%, faster than France and Germany but slower than Spain and Greece. However, UK household disposable income per capita has been broadly flat over the period (Q1 2007 to Q1 2015).

  • Between Q1 2014 and Q1 2015 UK household spending saw an increase of 2.7% – following the general upward trend that started in Q4 2011. This was faster than Germany, France, Italy and Greece but slower than Spain.

  • Since Q3 2013, UK consumer confidence has been higher than all the observed economies and the OECD total, but between Q1 2014 and Q1 2015 there has only been a small increase of 0.3% whilst other countries can be seen to be closing the gap on the UK.

  • In Q1 2015 UK household indebtedness1 was the highest at 145.3% when compared to France, Greece and Spain, whilst Germany and Italy had the lowest levels. Despite showing a general trend downwards since Q3 2007, the UK saw a small increase between Q1 2014 and Q1 2015 of 0.5 percentage points.

  • Despite having higher financial indebtedness, in Q1 2015 UK household financial net worth2,3 was higher than all observed economies at 377% having increased 49.7 percentage points between Q1 2014 and Q1 2015.

  • Between Q1 2014 and Q1 2015 the UK unemployment rate fell 1.2 percentage points and in Q1 2015 the rate of 5.5% was lower than the OECD total (7.0%) and France (10.3%), but higher than Germany (4.8%). These rates were much lower than those seen in Greece (25.9%) and Spain (23.1%).

Notes for Main points

  1. Total outstanding quarterly household debt as a percentage of 4-quarter rolling sum of household disposable income. Includes non-profit institutions serving households.
  2. Quarterly household financial net worth as a percentage of 4-quarter rolling sum of household disposable income. Includes non-profit institutions serving households.
  3. The reason financial net worth is considered is due to non-financial asset data not generally being available quarterly.

GDP per capita and household income per capita

During the economic downturn, UK GDP per capita fell 6.9% from its peak in Q1 2008 – larger than falls seen in France and Germany but smaller than Spain, Italy and Greece. After the initial decline, the UK had slow growth of 2.0% between Q3 2009 and Q4 2012, when compared to 7.9% growth in Germany over the same period. However, the UK’s growth in GDP per capita was better than Greece, Spain and Italy which, after recovering slightly from the initial fall in the downturn period, saw it fall further. Following on from this, the UK posted stronger growth figures between Q1 2013 and Q1 2015, increasing 4.3% – higher than growth rates seen in Germany over the same period. This, alongside GDP per capita in France growing 0.8% over the same period meant that in Q1 2015 GDP per capita growth relative to Q1 2007 was higher in the UK than in France. This was also the case when the UK is compared to Greece (-22.8%), Spain (-5.3%) and Italy (-12%), which have yet to return to Q1 2007 levels, but Germany (6.9%) grew faster. 

Figure 1: GDP per head, Q1 2008 to Q1 2015

Q1 2007 = 100
  Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015
UK 101.4 94.8 94.9 96.2 96.5 96.7 98.7 100.8
Germany 102.9 96.0 98.5 104.1 104.9 104.1 106.2 106.9
France 101.2 96.7 97.4 99.7 99.6 99.3 99.5 100.1
Spain 101.1 96.6 95.2 94.9 93.0 91.2 92.2 94.7
Greece 102.4 94.8 95.0 85.6 79.5 75.8 76.2 77.2
Italy 99.8 92.0 92.3 93.8 91.2 88.4 87.9 88.0
OECD total 101.2 95.7 97.3 99.1 100.3 100.4 101.7 103.3

Table notes:

  1. Source: OECD

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The UK’s household disposable income per capita rose 3.9% between Q1 2014 and Q1 2015. However, the trend since Q1 2007 has been broadly flat. Up until Q4 2009 the UK growth in household disposable income had been following a similar trend to the OECD total and the other observed economies except Italy – whose growth in household income per capita had fallen further. At this point the observed economies started to deviate with Germany and the OECD showing stronger growth, compared to Spain Italy and Greece, whose growth all saw decreases.

Figure 2: Household Income per head, Q1 2008 to Q1 2015 (Q1 2007 = 100)

Q1 2007 = 100
  Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015
UK 99.0 98.1 101.3 98.0 97.4 97.6 96.7 100.4
Germany 100.6 100.7 101.0 102.6 104.2 103.3 104.5 106.7
France 100.9 100.7 101.9 102.4 101.3 100.4 100.5 102.3
Spain 100.6 102.8 100.2 97.1 93.1 90.5 90.5 94.6
Greece 101.3 104.5 98.7 85.2 78.8 72.1 68.5 72.5
Italy 99.2 96.9 93.6 93.6 89.4 86.6 86.3 86.7
OECD total 100.9 101.7 101.7 103.9 105.0 104.3 105.3 108.1

Table notes:

  1. Source: OECD

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Confidence, consumption and savings

In Q1 2007, UK consumer confidence was broadly midway between Germany, the highest, and Spain, the lowest. The UK saw an initial fall which was larger than seen in France, Italy and Greece but smaller than Germany. However, the initial recovery from the UK saw them reach higher consumer confidence in Q1 2010 than any of the other observed economies for that quarter. After this, UK consumer confidence fell again, falling below levels in Germany, France, Italy and Spain. The UK then began to recover again in Q4 2011 and due to strong growth had the highest consumer confidence of the observed economies in Q1 2015.

Figure 3: Consumer Confidence, Q1 2008 to Q1 2015

  Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015
UK 100.2 96.9 100.7 98.1 98.0 98.8 101.7 102.1
Germany 100.9 96.6 98.8 102.4 101.0 100.1 101.2 101.2
France 100.1 98.1 99.8 99.6 99.1 98.7 99.4 99.7
Spain 99.1 96.3 99.4 99.3 98.8 97.6 100.2 101.5
Greece 99.9 98.0 98.2 96.2 94.9 96.0 97.2 99.7
Italy 99.2 98.3 99.6 98.9 97.6 97.0 100.1 101.5
OECD total 99.3 96.9 99.2 99.4 99.0 99.1 99.8 100.6

Table notes:

  1. Source: OECD
  2. Amplitude adjusted long term average= 100

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UK consumer expenditure per capita fell 6.4% from Q4 2007 to Q2 2009 and did not begin recovering until Q3 2011. The fall in the UK series was more prominent than for France, Germany, the OECD total and, initially, Spain. The UK was also slower to recover than France and Germany.  Despite increasing by 5.1% from Q3 2011 in Q1 2015, UK household consumption expenditure per head remained below pre-crisis levels. In comparison with the OECD total, Germany and France have all exceeded their Q1 2007 levels since Q4 2010. However, the UK has not fallen to the extent of Greece, Spain and Italy who dropped 23.5%, 13.4% and 11.2% below Q1 2007 levels at their lowest point respectively; they saw small upward trends from 2014 onwards but are still off their Q1 2007 levels.

Figure 4: Consumer expenditure per head, Q1 2008 to Q1 2015 (Q1 2007 = 100)

Q1 2007 = 100
  Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015
UK 101.5 96.8 95.4 95.0 95.3 96.0 97.2 99.8
Germany 101.3 102.4 101.7 103.7 104.4 104.5 105.5 107.0
France 101.1 100.1 101.3 102.6 101.3 100.8 100.7 102.5
Spain 100.9 95.0 93.7 92.5 89.8 86.6 88.1 91.3
Greece 103.8 100.5 99.7 87.4 80.4 77.1 78.1 80.0
Italy 98.8 95.8 96.2 97.0 93.1 89.5 89.0 89.2
OECD total 100.9 97.7 98.5 100.1 100.7 101.1 102.3 104.0

Table notes:

  1. Source: OECD

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Debt and net worth

The UK households’ indebtedness ratio to income has been highest of the previously mentioned countries throughout the Q1 2007 to Q1 2015 period, despite decreasing from 165% in Q1 2007 to 153% in Q3 2010. Over the same period, the ratio in Germany also fell from 97% to 92%, but the ratio in France increased from 92% to 100% before stabilising. Spain followed a similar pattern to that of Germany and the UK, with a decrease from 136% in Q1 2007 to 115% in Q1 2015.

Figure 5: Indebtedness ratio, percent, Q1 2008 to Q1 2015

  Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015
UK 168.5 165.4 156.6 149.8 148.7 146.9 144.8 145.3
Germany 94.1 91.8 92.2 89.7 87.5 87.2 85.9 84.9
France 92.6 93.4 98.9 101.5 100.4 103.5 102.7 102.2
Spain 141.6 136.4 132.0 136.0 130.6 128.4 121.8 115.1
Greece .. .. .. .. .. 98.8 103.9 100.3
Italy .. .. .. .. 82.2 83.7 82.7 82.3

Table notes:

  1. Not all data available for Italy, Greece and OECD total
  2. 'Indebtedness ratio' calculated as total outstanding quarterly household debt as percentage of 4-quarter rolling sum of household disposable income. Includes non-profit institutions serving households.
  3. Source: OECD

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Whilst having a higher indebtedness ratio, the UK also had higher financial net worth to income over the period. Despite decreasing from 312% in Q1 2007 to 255% in Q3 2008, the ratio has been on a steady upward trend since then, reaching 377% in Q1 2015. Financial net worth in Germany and France has been on an upward trend since Q1 2009, the ratio to income reaching 200% and 247% in Q1 2015 respectively, but remain below the UK. Spain remained below these levels throughout the period, reaching their highest point of 179% in Q1 2015.

Figure 6: Financial net worth, percent, Q1 2008 to Q1 2015

  Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015
UK 284.4 265.2 281.8 290.6 318.8 333.8 327.3 377.0
Germany 171.0 159.1 175.1 177.7 176.6 183.7 189.9 199.7
France 208.0 183.3 206.2 213.6 210.6 221.5 233.6 246.8
Spain 131.7 92.8 107.3 118.9 118.0 136.1 162.1 178.7
Greece .. .. .. .. .. 76.0 136.4 116.7
Italy .. .. .. .. 241.3 257.0 277.8 290.3

Table notes:

  1. Not all data available for Italy, Greece and OECD total.
  2. 'Financial net worth' is calculated as quarterly household financial net worth as percentage of 4-quarter rolling sum of household disposable income. Includes non-profit institutions serving households.
  3. Source: OECD

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Unemployment

In Q1 2015 the UK unemployment rate was 5.5% – lower than the OECD total, France and Italy, but higher than Germany's unemployment rate. Germany has seen a general downward trend in its unemployment rate since late 2009, whereas the UK did not see the falls until early 2013. The unemployment rates in France and Italy have been on general upward trends since Q1 2008 and Q1 2007 respectively. They reached rates of 10.3% (France) and 12.4% (Italy) in Q1 2015, above the OECD total of 7.0%. However, much larger upward trends were seen in Greece (25.9% in Q1 2015) and Spain (23.1% in Q1 2015).

Figure 7: Unemployment rate, percent, Q1 2008 to Q1 2015

  Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015
UK 5.1 7.0 7.9 7.7 8.2 7.8 6.7 5.5
Germany 7.8 7.5 7.4 6.2 5.4 5.4 5.1 4.8
France 7.1 8.6 9.4 9.1 9.5 10.3 10.2 10.3
Spain 9.2 16.5 19.2 20.5 23.5 26.2 25.2 23.1
Greece 8.0 9.1 11.4 15.5 22.1 26.9 27.1 25.9
Italy 6.5 7.4 8.4 7.9 9.8 11.8 12.6 12.4
OECD total 5.6 7.5 8.5 8.0 7.9 8.1 7.6 7.0

Table source: Organisation for Economic Co-operation and Development

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Notes for Unemployment

  1. Throughout this article, Q1 refers to Quarter 1 (January to March), Q2 refers to Quarter 2 (April to June), Q3 refers to Quarter 3 (July to September) and Q4 refers to Quarter 4 (October to December).

Background notes

  1. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

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