An Evaluation of the Economy of the United Kingdom Based On the Consequences ofthe Credit Crunch - Dissertation Example

In the summer of 2011, the financial crisis that shook the global economy knocked the doors by jolting the economy of the United States and other European Nations (Oxlade (2011). The global markets were miffed by the possibility of another financial setback and probably another recession to deal with (Franklin, Douglas, 2007). The research highlights the current credit crunch scenario prevailing in the United Kingdom through a thorough analysis of past and present literature along with understanding and analysing the key reasons behind the rise of recession in different parts of the world (Lowery (2011).

The information collected from different sources and resources helped in developing aims and objectives of the research along with understanding the present financial crisis rising from the ashes of the past crisis that once thwarted the financial progress and stablisation in different parts of the world. The research methodology helped in analysing the primary and secondary data in an analytical manner through logical research methods, approaches and ideologies. Findings of the research were compared with the analysis of literature in order to identify a common trend or relationship in a logical manner.

Primary reasons behind the credit crunch have been highlighted well to support the proposed aims and objectives of the research. The research also discusses ethical issues and logical considerations that helped in presenting the research in an ethical and honest manner. The conclusion part is based on the overall analysis of the data and information collected from different sources along with relating with the literature in a significant manner TABLE OF CONTENTS Section 1.Introduction 1.1 Background of the Topic 6 1.

2 Research Aim 7 1.3. The paper tells that the financial crisis of the 2007 strongly affected the economics of the global world in a negative manner. The financial crisis of the 2007; often considered as one of the worst credit crunches after the Great Depression of the 1930s changed the financial structure and image of the global economy. It resulted in the collapse of few of the financial institutions across the globe with the likes of Lehman Brothers and Northern Rock falling prey to the financial turmoil.

The bailout of banks by the governments across the globe did not revamp the financial health of the financial institutions and the whole world suffered with the loss of money, investments and jobs. The financial crisis was triggered by the liquidity crunch faced by the banks of the United States because of the housing bubble that raised issues and questions over the sub-prime crisis. Investors across the world were skeptical in terms of investing their money and banks were facing credit crunch that blocked the equilibrium between the inflow and outflow of funds driven by the demand and supply of funds.

A number of measures including governments’ initiatives to bail out financial institutions and improvement in the liquidity position of banks played an important role in stablising the credit crunch but the impact and influence was too hard that up to some extent changed the financial position of the global economy.