We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Problem of the Inflation in The UK Economy - Essay Example

Comments (0)
This essay mainly focused on the concept of U.K‘s inflation rate, its fluctuation in the economy and its effects on different sectors. The inflation can be described as the process of persistent of rise in prices of goods and services, that translates into fall of the purchasing power…
Download full paper
Problem of the Inflation in The UK Economy
Read TextPreview

Extract of sample
Problem of the Inflation in The UK Economy

Download file to see previous pages... sis, prices were rising at a yearly rate of 5%.According to CPI measure, less than a year later prices were rising by 1% and falling by about RPI measure on the other hand (Economic Tracker, Inflation, June 18, 2013). Causes Increase in private and public expenditure, increase in consumer spending, reduction in taxes, repayment of old internal loans, growth in population, increase in exports and deficit financing are the main causes in rise in demands for gods and services. Industrial disputes, shortage of factors of production, natural calamities and hoarding of goods are considered to be the main causes of decrease in the supply of goods and services. This phenomenon of inflation incorporated in the U.K’s economy was really a big swing that really caused some transformation within the country. The transportation cause was high due to interpolation of high oil prices resulting into upraised prices of products and thus high household energy bills. Food prices were enormously high due to the rise in subsequent rise in oil prices, which makes fertilizer and power much more expensive and costlier. The other causes are droughts, rising demand from emerging economies, and land being used for bio-fuel. The cost of imported goods bounced up due to the fall in sterling. By the early 2009, the price of crude oil has collapsed in just six months as it loosed two-thirds of its value. The world-wide recession had taken hold, which implies that there was less demand for fuel to power factories, transport good for the availability of shopping and to get the staff and worker to work. In the UK’s , another major reason for the inflation rate to be lower in-between the phase of 2008-09 was carving of VAT from 17.5% to 15% that was introduced to shoot up spending. The RPI measure...
The essay mainly concentrates on the nature, cause and its impact of inflation in U.K’s economy and outlines the remedies, that should be proposed thereon for the abatement of the threat of the inflation. The inflation rate is explained with the help of AS-AD (Aggregate demand-Aggregate supply model) by John Maynard Keynes.
There are two factors mainly working in the economy, i.e. the Cost-push inflation and the Demand-pull inflation ( factors for hiked price level marked with a high supply and lower demand level). The Cost-push inflation is generally there to lower the aggregate supply(short run) and the Demand-pull inflation is mainly to increase the level of demand in the economy.
There are three side policies to tackle the inflation problem : demand side, supply side and exchange rate policies to check for inflation. The demand side policy can be two types of fiscal policy such as deflationary fiscal policy (increase in taxes and lowering of government spending) and deflationary monetary policy (rising of interest rate and reducing money supply). Supply side policies involve all the policies, that improves the efficient supply of all goods and services including privatization, training and education given to workforce, increase in industry competition.
If the economy is deeply affected by inflation, the economic impact can be sub-divided into two major parts, i.e. its impact on productivity and impact on distribution of wealth. If inflation creeps in economy it has a positive impact as the price level increment is small. ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
Inflation problem of Hongkong
The exchange in foreign market would only create the different in the cost of currency transfer, depending on the value of the currency. In essence, the model outlines that the demand and supply changes have various impacts in trade.
20 Pages(5000 words)Essay
Gas Industry and the Impact on UK Economy
Conclusion VII. Bibliography Introduction The gas industry has a substantial impact on the UK economy. This is because the United Kingdom is a large consumer of gas in several ways with many of its energy demand pegged on gas. The supply of gas, however, remains an immense challenge to the country.
7 Pages(1750 words)Essay
The Rise and Fall of Andrew Johnson
Before he became a politician, he was a tailor by profession, and he lacked formal education since he grew in poverty. In his political career, was in the US Congress, he was a Tennessee legislature and the governor of Tennessee. He was a Democrat who championed the measures by the populists, and he was a supporter of the state.
7 Pages(1750 words)Research Paper
Tourism and Economy of UK
The author of the essay suggests that tourism industry has gained worldwide prominence in most countries in the world. stresses that so many countries depend on the tourism industry for its economic upliftment and economic miracles had been truly achieved by a mere taking advantage of whatever beauty and charm of its tourism sites that God has endowed the nation with.
17 Pages(4250 words)Essay
Inflation Control by Government of UK Economy
The share of GDP accounted for by gross fixed investment varies according to the UK's position in the cycle, but typically fluctuates in a range of 16-17% of GDP. Low levels of investment are often cited as factors behind the UK's poor productivity performance.
8 Pages(2000 words)Essay
Unemployment Problem the UK
This has been the experience of the First World countries within the OECD whose unemployment figures started to breach the ILO standard in the early 1960s. Nickell, S. (2003) Based on the ILO definition, unemployment becomes a problem when the number of unemployed individuals reaches 1.5 per cent over the official employment rates.
14 Pages(3500 words)Essay
What is the optimal rate of inflation
There are several different measures of inflation including the Consumer Price Index (CPI) or the GDP deflator which reflects inflation as an function of the economy (Wikipedia,
4 Pages(1000 words)Essay
With reference to the UK, examine and discuss the methods open to a government to control the rate of inflation within an economy
Governments can regulate the rate of inflation in many different ways including the interference in markets with the effect of raising
8 Pages(2000 words)Essay
Is the UK economy out of recession
on the GDP numbers for the years 2008 and 2009, one learns that “the economy contracted even more sharply than previously thought in the first quarter of 2009: 2.4 per cent compared to the preliminary estimate of a 1.9 per cent contraction.” (Lynch, 2009) The promising
8 Pages(2000 words)Essay
Business in UK
To supply products and services, such as public goods, such as roads, bridges and defence; merit goods, including schools and hospitals; and welfare benefits, such as disability and unemployment benefit. It is the
7 Pages(1750 words)Essay
Let us find you another Essay on topic Problem of the Inflation in The UK Economy for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us