How well do we understand economic terms?
The state of the economy (and what we should do about it) are rarely far from the centre of political debate in the UK - never more so than when the Chancellor stands up to deliver his budget speech. But how good a job do politicians and the media do of actually communicating what these decisions involve?
Not good enough, according to a Full Fact research briefing we're publishing today, which summarises research into public understanding of core economic terms. We've brought together surveys conducted by organisations including the BBC, the Bank of England, the Royal Statistical Society and the charity Economy.
Less than 4 in 10 UK adults could pick the right definition of “GDP” in a 2015 YouGov survey. Only half of people could identify how the deficit and national debt relate to each other in a 2013 Ipsos MORI poll. And as for "Quantitative Easing", only 3 in 10 could select the right definition. Yet politicians and the media use these terms all the time, without necessarily considering how many of their audience actually understand what they’re saying. (We know: too often, we do it as well.)
The result, as Economy have written, is that “the economy feels vast and distant to many”. People become disengaged from important conversations.
We think it’s important that all of us do better. As part of this, we’ve created a simple guide to what some key economic terms mean. This is only the beginning of the work: we’ll continue to update, add to and refine our guide as we get feedback from our readers (Have opinions? Email us at email@example.com). We’re also committing to using these descriptions whenever we write about these economic issues. Which is quite a lot...
We’re not pretending that our definitions are necessarily the best possible ones that could be written - the most comprehensible, the clearest, the simplest. On the contrary, we’re excited to see what other people come up with. We’re throwing the challenge out there to others who work in politics and the media - how sure are you that your audience really grasps what you’re saying? And more importantly: what can you do to improve that?