UK's Economy in Europe
When one talks about a strong economy, a few key economic indicators
will get mentioned; inflation, unemployment and economic growth. These
are considered the three main macroeconomic indicators of any economy.
To define a strong economy in the simplest form you must have a low
rate of inflation, low unemployment and steady economic growth. During
this essay there will be comparisons between other European countries
(e.g. France, Germany, Luxemburg, Belgium, Spain, Italy) and these
economic indictors mentioned as well as others.
We will start to look at inflation rates. "The British economy has
slowed over the past 12 months, but remains among the strongest in the
developed world, a report has said" (BBC News Online). Last month the
Underlying rate of inflation in the UK remained unchanged at 2.3%,
which is below the governments target rate of 2.5%, this is good for
the economy. The headline rate of inflation, which includes mortgage
interest payments, fell last month by 0.4% to 1.7%. These figures show
the rate at which prices are increasing. When we compare the UK's
annual inflation figure of 1.2% to that of Germany and France (-0.6%
in October), which is around the 2% mark, it seems that our rate is
quite low and therefore good for our economy. The Eurozone inflation
is expected to be 2.1%; this is measured by the Monetary Union Index
of Consumer Prices (MUICP). By looking at this we can see that this
figure is very close to the UK's inflation rate. On the whole
inflation in the UK is at a lower rate than that of its European
neighbours, which is an indicator of a strong economy.
When we look at unemployment in the UK we can see that it is around
900,000 or 2.3%. This is the lowest it has been since the 1970's and
is at a lower percentage rate than Japan and the USA. Germany who has
recently announced that they have just entered a recession has a very
high rate of unemployment at around 8.0% and France, Finland and Spain
even higher. The UK, Netherlands and Luxemburg are amongst the lowest
unemployment rates in Europe. "Unemployment is up again in France and
Germany, in a sign that the eurozone's two biggest economies are still
in the grip of a downturn" (BBC News Online). France and Germany have
the largest economies in Europe and recent figures show that
unemployment increased by 15,000 a...
... middle of paper ...
...ong performance is reflected by such indicators as solid growth and
forecasts for next year predicting an annual growth of 2.75% - 3.75%.
Inflation currently at 2.3% is lower than forecasted which is a strong
indicator for a strong economy. Our unemployment is at the lowest it
has been since the 1970's and lower than that of the two biggest
economies in the world at present at 2.3% or around 900,000. Interest
rates are remaining unchanged at 4%, which is low, and the reason for
the British economy having a firm housing market. The UK's main
economic problem is the manufacturing output. It could be argued that
this sector of the economy is in recession after figures of negative
growth in the last two quarters. As a result of this the UK is
suffering from an all time high trade deficit, which is also due to
the high value of the pound. But overall the UK economy is in a good
state taking into advantage the global economic slowdown which is
going on around it.
References:
www.bbc.co.uk
Sources:
· www.bbc.co.uk
· www.bized.ac.uk
· www.europa.eu.int
· www.ukonline.gov.uk
· The Daily Mail Newspaper
· The Business Environment - Brooks/Weatherston
manufacturing have been vanishing at a fast rate and unemployment percent is on the rise, but
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1988 to 2.2% in 1989 and fell to its lowest in 1991 at –1.4%. This is
Government policy environment – a desire to reduce unemployment and make the economy attractive to inward investment as a source of employment and long-term growth
Running The British Economy Introduction = == == == ==
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