New reports show that UK inflation increased to 4% in December,1 with this, it’s never been more important to understand the current financial climate Despite this, many people still find financial jargon confusing and intimidating.
With this in mind, City Index used Ahrefs, a search analytics tool, to find the top 50 most confusing financial terms based on their annual and monthly search popularity.
Highlights from the research:
- ‘Equity’ is the most misunderstood term in the UK, googled over 22,700 times a month (8.1% of worldwide monthly searches)
- Brit’sGoogle ‘GDP’ 12,100 times a month – 12% of global searches
- ‘Acquisition’ is third with 2,900 monthly searches (2.73% of global searches)
- ‘Investment’ places 10th with 30,000 searches for its definition each month on average, just 400 searches fewer on average than ‘Overdraft’ (30,400 global searches per month).
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The results:
| Rank | Finance term | Monthly average searches for the definition (UK) | Annual average searches for the definition (UK) | Average monthly searches for definition (worldwide) | Average annual searches for definition (worldwide) |
| 1 | Equity | 22,700 | 272,400 | 277,000 | 3,324,000 |
| 2 | GDP | 12,100 | 145,200 | 162,000 | 1,944,000 |
| 3 | Acquisition | 2,900 | 34,800 | 106,000 | 1,272,000 |
| 4 | Principal | 2,400 | 28,800 | 104,000 | 1,248,000 |
| 5 | Correlation | 2,100 | 25,200 | 82,000 | 984,000 |
| 6 | Asset | 1,400 | 16,800 | 73,000 | 876,000 |
| 7 | Net Worth | 3,400 | 40,800 | 41,400 | 496,800 |
| 8 | Gross Income | 5,800 | 69,600 | 40,000 | 480,000 |
| 9 | Overdraft | 3,700 | 44,400 | 30,400 | 364,800 |
| 10 | Investment | 3,400 | 40,800 | 30,000 | 360,000 |
Please find the full data set and definitions of all terms used in this study, here.
Equity is the most confusing finance term in the UK
‘Equity’ ranks as the UK’s most confusing finance term with Brit’s googling the definition 22,700 times a month, this accounts for 8.1% of worldwide annual monthly searches.
Rebecca Cattlin, a financial market expert at City Index, comments: “Equity refers to the figure that would be returned to a company’s shareholders if the business liquidated its assets and paid off any liabilities or debts. In simpler terms, if you own a business and your inventory, cash, and other assets equal £18,000 and any debts add up to £6,000 — you have £12,000 worth of equity — by subtracting any liabilities from your assets.”
‘GDP’ is the UK’s second most confusing finance term, with an average of 12,100 monthly searches for its definition. This accounts for 12% of average monthly searches across the globe. The nymber of monthly searches for ‘GDP’ in the UK are over 317% more than ‘acquisition’ in third place with 2,900 monthly searches.
Rebecca Cattlin, a financial market expert at City Index, comments: “Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. GDP is used as a measure of the size and health of a country’s economy over a period of time. GDP falling shows that the economy is shrinking, and can be a sign of a looming recession.”
‘Acquisition’ is the UK’s third most widely misunderstood finance term, with its meaning searched for on average 2,900 times each month, 2.73% of global monthly searches.
Rebecca Cattlin, a financial market expert at City Index, comments: “An acquisition is when a company purchases most, or all of another company’s shares to gain control of that company. An example of an acquisition occurred in 2017 when Amazon purchased Whole Foods for £10.7bn, or Google’s acquisition of Android in 2005.”
Why it’s key to understand financial jargon in the current climate
It may be surprising to some that Equity is the most misunderstood finance term worldwide, with an average of 277,000 monthly searches for its definition. But why is it so important to understand financial jargon and specialised language?
Rebecca Cattlin, a financial market expert at CityIndex, comments:
Financial terms, such as Equity and GDP, have a huge impact to business owners, and the public.
A looming recession as a result of shrinking GDP can lead to increasing mortgage prices for homeowners and increasing financial risks, such as business failure and bankruptcy
Therefore, it has never been more important to understand financial jargon, the economic world around us and how we are being affected.”
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Methodology:
- CityIndex were keen to find out the financial terms which are the most confusing worldwide.
- To do this, a seed list of the 50 most used financial terms was selected from multiple articles such as FinanceBuzz, Capitalbenchmarkpartners.com, Fundera.com and Investopedia.com. The definitions of the financial words were also sourced from these sites.
- CityIndex then inserted each financial term from the list into the Ahrefs global database, to establish the global monthly average Google searches for the financial terms such as ‘ GDP meaning’ and ‘ Equity definition’.
- The figures were then multiplied by 12 to obtain the average annual searches.
- All data was collected in January 2024 and is accurate as of then.
*All definitions have been taken from Investopedia.com and expanded on by an in-house expert.
