The UK economy is expected to grow more slowly than previously thought in the next couple of years, according to the Office for Budget Responsibility (OBR). Inflation, which is when prices go up, is also predicted to take longer to come down, and people’s living standards are not expected to go back to how they were before the pandemic until 2027-28. The OBR is an independent group that makes predictions about the government’s money. It now thinks the economy will grow by 0.6% this year, which is better than expected, but it has lowered its predictions for 2024 and 2025 to 0.7% and 1.4% respectively. The OBR says this is because inflation and interest rates are higher than they thought they would be.

The OBR thinks that inflation, which is currently at 4.6%, will only go down to 2.8% by the end of 2024 and reach the Bank of England’s target of 2% in 2025. Before, they thought inflation would go above the target next year. The OBR also says that people’s living standards, which is how much money they have to spend, will be 3.5% lower in 2024-25 compared to before the pandemic. After that, they will slowly get back to normal. This is not as bad as they first thought, but it’s still the biggest drop in living standards since the 1950s.

The UK economy has been dealing with a mix of high inflation, rising interest rates, and less demand from consumers, which has made it harder for the economy to grow. The Bank of England, which is in charge of the country’s money, has recently made predictions that are a bit more negative, saying there will only be a tiny bit of growth in 2024 and 2025. The bank has raised interest rates 14 times since December 2021 to try to stop prices from going up too much, and now they’re at the highest they’ve been in 15 years, which is 5.25%. Higher interest rates can make people not want to borrow or invest money, which can make the economy even slower. Also, while people who save money are getting more interest, the rates for mortgages have also gone up, which puts pressure on households. The OBR thinks that house prices will go down by about 4.7% in 2024.

To deal with these problems, Chancellor Jeremy Hunt has announced that he will cut taxes and increase benefits in his Autumn Statement. He knows that the country needs to be more productive and has pointed out that the private sectors in the US, Germany, and France are more productive because they invest more money. Hunt has suggested ways to make it easier for businesses to get money and to reduce taxes for them, so they can be more productive. He also said that the government will borrow and owe less money than they

Original news source: UK economy growth forecasts slashed for next two years (BBC)

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Group or Classroom Activities

Warm-up Activities:

– News Summary

Instructions: Divide the class into pairs or small groups. Give each group a few minutes to read the article. Then, ask them to summarize the main points of the article in a short news summary. They can use bullet points or write a paragraph. Afterward, have each group share their summaries with the class.

– Opinion Poll

Instructions: Ask the students to form pairs or small groups. Assign each group a question related to the article, such as “Do you think the UK economy will recover by 2027-28?” or “Should the government cut taxes and increase benefits?” Give them a few minutes to discuss the question and gather their opinions. Then, have each group present their opinions to the class and facilitate a discussion.

– Vocabulary Pictionary

Instructions: Prepare a list of key vocabulary words from the article, such as “inflation,” “interest rates,” “living standards,” “productivity,” etc. Divide the class into teams and give each team a whiteboard or a large piece of paper. One student from each team will come to the front of the class and you will show them a vocabulary word. They must then draw a picture to represent the word while their team tries to guess it. The team that guesses the most words correctly wins.

– Pros and Cons

Instructions: Divide the class into pairs or small groups. Assign each group to discuss the pros and cons of one of the following statements related to the article:
1. Raising interest rates is a good strategy to control inflation.
2. Cutting taxes and increasing benefits will help improve the UK economy.
Give the groups some time to discuss and write down their arguments. Then, have each group present their pros and cons to the class and facilitate a debate.

– Future Predictions

Instructions: Ask the students to form pairs or small groups. Have each group discuss and make predictions about the future of the UK economy based on the information in the article. They can discuss topics such as inflation, living standards, interest rates, etc. Afterward, have each group share their predictions with the class and facilitate a discussion. Encourage the students to provide reasons and evidence to support their predictions.

Comprehension Questions:

1. According to the Office for Budget Responsibility, how is the UK economy expected to grow in the next couple of years?
2. What is inflation and why is it predicted to take longer to come down?
3. When are people’s living standards expected to return to pre-pandemic levels?
4. What is the OBR and what is its role?
5. How has the OBR adjusted its predictions for the UK economy in 2024 and 2025?
6. What is the current rate of inflation and when is it expected to reach the Bank of England’s target?
7. How much lower will people’s living standards be in 2024-25 compared to before the pandemic?
8. What factors have made it difficult for the UK economy to grow and what actions has the Bank of England taken to address these challenges?
Go to answers ⇩

Listen and Fill in the Gaps:

The UK (1)______ is expected to grow more slowly than previously thought in the next couple of years, according to the Office for Budget Responsibility (OBR). (2)______, which is when prices go up, is also predicted to take longer to come down, and people’s living standards are not expected to go back to how they were before the pandemic until 2027-28. The OBR is an independent group that makes (3)______ about the government’s money. It now thinks the economy will grow by 0.6% this year, which is better than expected, but it has lowered its predictions for 2024 and 2025 to 0.7% and 1.4% respectively. The OBR says this is because (4)______ and interest rates are (5)______ than they thought they would be.

The OBR thinks that inflation, which is currently at 4.6%, will only go down to 2.8% by the end of 2024 and reach the Bank of England’s target of 2% in 2025. Before, they thought inflation would go above the target next year. The OBR also says that people’s living (6)______, which is how much money they have to spend, will be 3.5% lower in 2024-25 (7)______ to before the pandemic. After that, they will slowly get back to normal. This is not as bad as they first thought, but it’s still the (8)______ drop in living standards since the 1950s.

The UK economy has been dealing with a mix of high inflation, rising interest (9)______, and less (10)______ from consumers, which has made it harder for the economy to grow. The Bank of England, which is in charge of the country’s (11)______, has recently made predictions that are a bit more negative, saying there will only be a tiny bit of growth in 2024 and 2025. The bank has raised interest rates 14 times since December 2021 to try to stop prices from going up too much, and now they’re at the (12)______ they’ve been in 15 years, which is 5.25%. Higher interest rates can make people not want to borrow or invest money, which can make the economy even slower. Also, while people who save money are getting more interest, the rates for mortgages have also gone up, which puts pressure on households. The OBR thinks that house prices will go down by about 4.7% in 2024.

To deal with these problems, Chancellor Jeremy Hunt has (13)______ that he will cut taxes and increase benefits in his Autumn (14)______. He knows that the country needs to be more (15)______ and has pointed out that the private sectors in the US, Germany, and France are more productive because they invest more money. Hunt has suggested ways to make it easier for businesses to get money and to (16)______ taxes for them, so they can be more productive. He also said that the government will borrow and owe less money than they
Go to answers ⇩

Discussion Questions:

Students can ask a partner these questions, or discuss them as a group.

1. What is inflation and why is it a concern for the economy?
2. How do you think rising interest rates can affect people’s borrowing and investing decisions?
3. Do you think it’s important for a country’s economy to have steady growth? Why or why not?
4. How would you feel if your living standards were lower than before the pandemic? Why?
5. Do you think it’s fair for the government to cut taxes and increase benefits to stimulate the economy? Why or why not?
6. What do you think could be the consequences of reducing taxes for businesses? Why?
7. How do you think higher interest rates can impact households and their financial decisions?
8. What are some ways that the government can encourage businesses to invest more money?
9. Do you think it’s a good idea for the government to borrow less money? Why or why not?
10. How do you think the drop in house prices could affect the housing market and homeowners?
11. How do you think the pandemic has affected people’s spending habits and consumer demand?
12. Do you think it’s important for the government to prioritize the country’s economic growth? Why or why not?
13. How would you feel if you were unable to borrow or invest money because of high interest rates? Why?
14. What are some ways that individuals can cope with the impact of slower economic growth?
15. Do you think it’s possible for the UK economy to recover and return to pre-pandemic levels? Why or why not?

Individual Activities

Vocabulary Meanings:

Match each word to its meaning.

Words:
1. economy
2. inflation
3. living standards
4. interest rates
5. growth
6. productivity
7. taxes
8. borrowing

Meanings:
(a) How efficient and effective someone or something is at producing goods or services
(b) Money that individuals and businesses have to pay to the government
(c) The cost of borrowing money or the return on savings
(d) When prices go up and things become more expensive
(e) The increase in the size or value of something
(f) The overall financial system of a country
(g) Obtaining money from someone with the promise to repay it later
(h) How much money people have to spend and their quality of life
Go to answers ⇩

Multiple Choice Questions:

1. What is the Office for Budget Responsibility (OBR)?
(a) The central bank of the United Kingdom
(b) A government department responsible for tax collection
(c) An independent group that makes predictions about the government’s money
(d) A regulatory body for financial institutions

2. What is inflation?
(a) When prices go down
(b) When the economy stops growing
(c) When interest rates increase
(d) When prices go up

3. When does the OBR predict that people’s living standards will return to pre-pandemic levels?
(a) 2027-28
(b) 2024-25
(c) 2025-26
(d) 2026-27

4. Why has the UK economy been struggling to grow?
(a) Low inflation, low interest rates, and high demand from consumers
(b) High inflation, rising interest rates, and less demand from consumers
(c) High inflation, low interest rates, and high demand from consumers
(d) Low inflation, rising interest rates, and less demand from consumers

5. What has the Bank of England done to try to control inflation?
(a) Lowered interest rates
(b) Raised interest rates
(c) Increased government spending
(d) Reduced taxes

6. How many times has the Bank of England raised interest rates since December 2021?
(a) 14 times
(b) 5 times
(c) 10 times
(d) 20 times

7. What is the current interest rate in the UK?
(a) 2%
(b) 4.6%
(c) 15%
(d) 5.25%

8. What measures has Chancellor Jeremy Hunt announced to address the economic problems?
(a) Raising taxes and reducing benefits
(b) Increasing interest rates and reducing government spending
(c) Cutting taxes and increasing benefits
(d) Increasing taxes and government borrowing

Go to answers ⇩

True or False Questions:

1. The UK economy is expected to grow more rapidly in the next few years, according to the Office for Budget Responsibility (OBR).
2. The OBR is an independent group that makes predictions about the government’s money.
3. The Bank of England has lowered interest rates 14 times since December 2021, which can stimulate the economy.
4. Inflation is currently at 4.6% and is expected to decrease to 2.8% by the end of 2024.
5. The OBR predicts that the economy will shrink by 0.6% this year, but has raised its predictions for 2024 and 2025.
6. People’s living standards are expected to return to pre-pandemic levels before 2027-28.
7. Inflation is predicted to take longer to come down, meaning prices will continue to rise.
8. People’s living standards will be 3.5% lower in 2024-25 compared to before the pandemic.
Go to answers ⇩

Write a Summary:

Write a summary of this news article in two sentences.

Writing Questions:

Answer the following questions. Write as much as you can for each answer.

1. According to the Office for Budget Responsibility, what is expected to happen to the UK economy in the next few years?
2. What is inflation and why is it a problem for the UK economy?
3. How long do experts predict it will take for people’s living standards to return to pre-pandemic levels?
4. What factors have made it difficult for the UK economy to grow?
5. What measures has Chancellor Jeremy Hunt proposed to address the economic problems in the UK?

Answers

Comprehension Question Answers:

1. According to the Office for Budget Responsibility, the UK economy is expected to grow more slowly than previously thought in the next couple of years.
Answer: The UK economy is expected to grow more slowly.

2. Inflation is when prices go up. It is predicted to take longer to come down because inflation and interest rates are higher than expected.
Answer: Inflation is when prices go up. It is predicted to take longer to come down because inflation and interest rates are higher than expected.

3. People’s living standards are not expected to return to pre-pandemic levels until 2027-28.
Answer: People’s living standards are expected to return to pre-pandemic levels in 2027-28.

4. The OBR, or the Office for Budget Responsibility, is an independent group that makes predictions about the government’s money.
Answer: The OBR is an independent group that makes predictions about the government’s money.

5. The OBR has lowered its predictions for the UK economy in 2024 and 2025 to 0.7% and 1.4% respectively.
Answer: The OBR has lowered its predictions for the UK economy in 2024 and 2025 to 0.7% and 1.4% respectively.

6. The current rate of inflation is 4.6% and it is expected to reach the Bank of England’s target of 2% in 2025.
Answer: The current rate of inflation is 4.6% and it is expected to reach the Bank of England’s target of 2% in 2025.

7. People’s living standards are expected to be 3.5% lower in 2024-25 compared to before the pandemic.
Answer: People’s living standards are expected to be 3.5% lower in 2024-25 compared to before the pandemic.

8. Factors that have made it difficult for the UK economy to grow include high inflation, rising interest rates, and less demand from consumers. The Bank of England has raised interest rates to try to stop prices from going up too much. However, higher interest rates can make people not want to borrow or invest money, which can slow down the economy. The bank has also increased rates for mortgages, putting pressure on households.
Answer: Factors that have made it difficult for the UK economy to grow include high inflation, rising interest rates, and less demand from consumers. The Bank of England has raised interest rates to try to stop prices from going up too much. However, higher interest rates can make people not want to borrow or invest money, which can slow down the economy. The bank has also increased rates for mortgages, putting pressure on households.
Go back to questions ⇧

Listen and Fill in the Gaps Answers:

(1) economy
(2) Inflation
(3) predictions
(4) inflation
(5) higher
(6) standards
(7) compared
(8) biggest
(9) rates
(10) demand
(11) money
(12) highest
(13) announced
(14) Statement
(15) productive
(16) reduce
Go back to questions ⇧

Vocabulary Meanings Answers:

1. economy
Answer: (f) The overall financial system of a country

2. inflation
Answer: (d) When prices go up and things become more expensive

3. living standards
Answer: (h) How much money people have to spend and their quality of life

4. interest rates
Answer: (c) The cost of borrowing money or the return on savings

5. growth
Answer: (e) The increase in the size or value of something

6. productivity
Answer: (a) How efficient and effective someone or something is at producing goods or services

7. taxes
Answer: (b) Money that individuals and businesses have to pay to the government

8. borrowing
Answer: (g) Obtaining money from someone with the promise to repay it later
Go back to questions ⇧

Multiple Choice Answers:

1. What is the Office for Budget Responsibility (OBR)?
Answer: (c) An independent group that makes predictions about the government’s money

2. What is inflation?
Answer: (d) When prices go up

3. When does the OBR predict that people’s living standards will return to pre-pandemic levels?
Answer: (a) 2027-28

4. Why has the UK economy been struggling to grow?
Answer: (b) High inflation, rising interest rates, and less demand from consumers

5. What has the Bank of England done to try to control inflation?
Answer: (b) Raised interest rates

6. How many times has the Bank of England raised interest rates since December 2021?
Answer: (a) 14 times

7. What is the current interest rate in the UK?
Answer: (d) 5.25%

8. What measures has Chancellor Jeremy Hunt announced to address the economic problems?
Answer: (c) Cutting taxes and increasing benefits
Go back to questions ⇧

True or False Answers:

1. The UK economy is expected to grow more rapidly in the next few years, according to the Office for Budget Responsibility (OBR). (Answer: False)
2. The OBR is an independent group that makes predictions about the government’s money. (Answer: True)
3. The Bank of England has lowered interest rates 14 times since December 2021, which can stimulate the economy. (Answer: False)
4. Inflation is currently at 4.6% and is expected to decrease to 2.8% by the end of 2024. (Answer: True)
5. The OBR predicts that the economy will shrink by 0.6% this year, but has raised its predictions for 2024 and 2025. (Answer: False)
6. People’s living standards are expected to return to pre-pandemic levels before 2027-28. (Answer: False)
7. Inflation is predicted to take longer to come down, meaning prices will continue to rise. (Answer: True)
8. People’s living standards will be 3.5% lower in 2024-25 compared to before the pandemic. (Answer: True)
Go back to questions ⇧