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UK Economy Quiz 2026

Q: What is the Bank of England's official inflation target, measured by the Consumer Prices Index (CPI)?

2% — The Bank of England has a mandate from the government to keep CPI inflation at 2%, using interest rates as its primary tool to achieve this.

Q: Which body sets interest rates in the United Kingdom?

The Monetary Policy Committee — The Monetary Policy Committee (MPC), which sits within the Bank of England, meets roughly every six weeks to vote on whether to change the Bank Rate.

Q: What does GDP stand for?

Gross Domestic Product — GDP, or Gross Domestic Product, is the total monetary value of all goods and services produced within a country in a given period and is the primary measure of economic size.

Q: Which UK government department is responsible for setting the budget and managing public finances?

HM Treasury — HM Treasury is the UK's economic and finance ministry, responsible for public spending, taxation policy, and the annual Budget statement.

Q: In economics, what is a 'recession' technically defined as?

Two consecutive quarters of negative GDP growth — The standard technical definition of a recession is two successive quarters (six months) in which the economy shrinks, i.e., GDP growth is negative.

Q: What term describes a period of high inflation combined with stagnant economic growth and high unemployment?

Stagflation — Stagflation, a portmanteau of stagnation and inflation, describes the difficult combination of slow growth, rising unemployment, and persistently high prices experienced notably in the UK during the 1970s.

Q: Which of the following best describes 'quantitative easing' (QE)?

The central bank creating money to buy financial assets — Quantitative easing involves a central bank, such as the Bank of England, electronically creating money and using it to purchase assets like government bonds, thereby injecting liquidity into the economy.

Q: The Office for Budget Responsibility (OBR) was established in which year?

2010 — The OBR was created in 2010 by the coalition government to provide independent economic and fiscal forecasts, removing that responsibility from HM Treasury itself.

Q: What share of UK economic output does the services sector (including finance, retail, and hospitality) broadly account for?

Around 80% — The services sector contributes roughly 80% of UK GDP, reflecting the economy's shift away from manufacturing and heavy industry over recent decades.

Q: Which measure captures the rate at which prices are falling across the economy?

Deflation — Deflation is a sustained fall in the general price level; while lower prices sound appealing, deflation can be damaging as consumers delay purchases expecting further falls, suppressing growth.

Inflation, interest rates, growth — how well do you understand the UK economy?

12 questions · ~6 mins ·

Question 1 of 12

1. What is the Bank of England's official inflation target, measured by the Consumer Prices Index (CPI)?

2. Which body sets interest rates in the United Kingdom?

3. What does GDP stand for?

4. Which UK government department is responsible for setting the budget and managing public finances?

5. In economics, what is a 'recession' technically defined as?

6. What term describes a period of high inflation combined with stagnant economic growth and high unemployment?

7. Which of the following best describes 'quantitative easing' (QE)?

8. The Office for Budget Responsibility (OBR) was established in which year?

9. What share of UK economic output does the services sector (including finance, retail, and hospitality) broadly account for?

10. Which measure captures the rate at which prices are falling across the economy?

11. The UK's national debt is typically expressed as a percentage of what?

12. What is the name of the UK's fiscal watchdog rule that broadly aims to stop the government borrowing to fund day-to-day spending?

UK Economy Quiz 2026

Great effort!