You may have heard about UK plc in news reports focusing on the economy. The term often makes an appearance in articles discussing the nation’s economic performance. So what is ‘UK plc’? Is it important? Let’s take a look.
What is a plc?
Before getting into the meaning behind UK plc, let’s quickly touch on the meaning of the acronym ‘plc’.
A plc is a public limited company. It’s the term given to an organisation that can offer to sell shares to the public. One way shares can be sold to the public is through a stock exchange.
Allowing members of the public to become shareholders is one of the fastest ways a plc can raise capital. Raising capital is often key to support future growth. A plc is legally separate in its own right.
Do note that the vast majority of businesses in the UK are not public limited companies. Limited companies and sole traders are far more common.
What does UK plc mean?
Understanding that a plc is a type of business can help you better understand the meaning behind this common phrase.
UK plc is an informal term given for the collective performance of the United Kingdom’s economy as a whole. In other words, the term is often used by economic commentators when working on the unofficial basis that the UK is one large publicly limited company.
Of course, the UK isn’t a single company at all. But by referring to the UK as a plc, analysts may be better able to portray a message on the country’s economic performance.
Is UK plc important?
The government measures the country’s economic performance by calculating the nation’s gross domestic product (GDP), which is a measure of collective output across the country. In other words, GDP is the total amount of products and services produced by the UK in a given year.
For example, when large organisations create several new jobs, it will probably boost the country’s GDP given that it will likely increase productivity and output.
For an economy to grow under the GDP measure, the number of products or services the country produces must also grow.
How did Covid-19 impact the UK economy?
According to the Office for National Statistics, the UK’s GDP was 7.8% lower in February 2021 than it was in February 2020, before the Covid-19 crisis began. This means that 7.8% fewer products or services were produced in February 2021 compared to the same month a year earlier.
Fewer goods and services produced due to Covid-19 meant the UK economy (or UK plc) was shrinking. As we produced fewer things, we had less to sell or consume, making us all poorer.
Has use of ‘UK plc’ increased during the pandemic?
During the Covid-19 pandemic, the term has been used extensively by the media. This is likely because of the unprecedented economic stimulus the government has undertaken as a result of the crisis.
For example, analysts often mention that increases in unemployment rates and business closures have had a devastating impact on UK plc. Furthermore, government plans to ‘Build Back Better’ have sometimes referred to boosting the balance sheet of UK plc.