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1. Manufacturing declines because of losing competitiveness(6%from world)

2. Current Ac bad(UK losing internat. competitiveness)

3. Services is+, but 5%only from worlds

Competitiveness of a nation is its ability to produce under free/fair market cond. goods that meet the test of int. market, while maintaining and expanding GDP/head in L-term

Cost competitiveness

1. RULC-falling, still more than competitors

a. Earnings-rise fast

b. Productivity-good

Price competitiveness

1. Inflation-high, Purchasing Power Parity theory suggest that as exchange falls UK can still be competitive

Real Exchange rate

UK record could be better in non-price(high tech) areas

OFT+MMC(should merge soon)looks at

1. Structure(market share)

2. Conduct(complaints, advertising, mergers, price leadership)

3. Performance(price rises relative to inflation)

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