Signs Showing the Possible Recovery of UK Economy - Essay Example

UK economic recovery Introduction The economy of Britain and that of the United Kingdom is seen to be bigger now than ever it was inthe last six years. The return of the economys pre-crisis number comes some years after a fall of some core economies in the world in the past. The prime minister has called for the fixing of the countrys economic finances for a better economic recovery to be experienced in the country. The economy of United Kingdom largely flatlined a period just after the 2008-2009 recession, but it sprung back to recovery after a period of one year as indicated by the International Monetary Fund. The recovery was accompanied by significant changes in most of the companies that are based in UK that indicated the recovery of the economy. In an example, the recovery helped the Royal Bank of Scotland to announce a surprise profit of 1 billion pounds during the second quarter of the year as a result of reduced losses from severe losses that had been experienced in the past (Blanchflower, 2015). Another example is shown by two of the Britains largest construction companies (Balfour and Carillion) as asserted by their confirmation that they are making constructive talks on a possible three billion pound merger. The rate at which the recovery of the economy is happening has led to the Bank of England giving out signs of being forced to raise its interest rates presently although policy makers are expecting a slight slowdown in the rate of interest charged as they are focusing majorly on low wage growth (Sabapathy, 2013). Signs showing the possible recovery of UK economy The economy of the United Kingdom has been said to be recovering, as it is evident in the development and the growth of different companies, industries and even the service sector in the country. Most of the companies in Britain are absorbing and employing around seventy thousand employees a month as per the latest statistics. The growth was been identified in the month of January and was very high compared to that in December that was very slow due to the hard times in the economy of UK. The reports that have been given have shown that companies are suitably encouraged to employ new staff at a fast rate for the last twenty years due to major improvements in the economy of the United Kingdom. Again, most of the companies in the UK are offering high salary rates in order to recruit the most qualified people in their firms an indication that the economy is doing good. Research has proven that, the rise in employment in the UK will lead to some growth in of the economy with a rate of about 2.7% in 2015 and 2.5 % for next year (Blanchflower, 2015). Another factor that shows that the economy is recovering comes from the spectacular collapse in the prices of oil from 115 USD per container to around 55 USD that leads to slashing of the operating cost making it economical to engage in business. There have been cases of declining prices of food and fuel and at the same time an increase in wages that lead to lessening of pressure on family budgets. The reduction of the wages makes most of the families to spend more leading to an improvement in the economy of the region. Official reports have shown that, the economy has grown by a percentage of 2.6 in 2014 that presented a record performance since 2007 and one of the strongest amongst a group of the seven major industrialized states in the world. Again, the UK economy as seen is not in any ways slowing sharply as those in the opposition have indicated but it has experienced a considerable rate of growth during the last few months. The employment in the private sector has been found to rise by about 2.2 million since 2010 from a fall of eight hundred thousand during the previous recession period. The economy is projected to continue recovering in 2015 towards 2016 due to the current consumer spending habit and also investments in the field of business. There are cases of improved private consumption that have acted as the main engine of the economic expansion and growth that is being experienced in the UK (Sabapathy, 2013). For the economy of the UK to grow, the wage growth rate needs to pick up by stimulating, retraining and also by encouraging resettlement in occupations where there are shortages that lead to mismatches in labor market and also to support some balanced growth via higher productivity. There is also a recommendation that the failure of recovery of productivity might translate into weaker United Kingdom economic growth and this should be avoided at any cost possible. The UK government should also support vigorous productivity in its various production industries, as it is a necessary situation for tough, sustainable growth, and uncertainty over the recovery of the economy. The GDP of Britain has risen and it stands at an astonishing 3 percent larger than it was recorded last year though the economy still faces lots of threats that can be ignored in during the period as the economy can be seen to be highly improving by the day. The last quarter of the year though was experiencing a slower growth rate o about 0.9 percent compared to what is happening presently. The figure of UKs economic growth shows that it is doing well compared to all the other major wealth economies in the world presenting its evidence for growth and recovery (Blanchflower, 2015). The economy also seems to be growing again with the output of many businesses and those of related financial services increasing by an approximate of 4.3 percent compared to those of last years. Generally, the output in the business sector increased by a percentage of 0.7, a 0.5 percent increase in industrial production tat includes all the manufacturing processes, a stunning 0.8 percent growth in the construction sector and a 0.3 percent in the agricultural sector making growth to be balanced in all sectors of the economy. The growth was faced with some two other worries, however, as services grew almost at a similar economy rate in comparison with the figures for the last quarter, there were predictions that suggested that the sector ground will halt at some point in the future posing a threat to the growing and improving economy (Blanchflower, 2015). Another indicator of the improvement of the economy is that of government services increasing their outputs by an approximate of 0.3 percent in the last quarter of the year and with about 1.3 percent in the last one year. The figure presented can be interpreted in one or two ways. The first interpretation is that, the figure may be indicating a case of dissolution remaining unchecked; the result of this is the fuelling of an enormous and growing budget arrears. The other interpretation that might be presented by the figures is that of the countrys productivity growing more in the public sector and all its related benefits. The efficiency in the growth of the economy has been fueled by reforms that have been done in the procurement sector and other parts of the public sector have also played a major function in boosting the countries economy, hence leading to its recovery. The output per capita seems to be rising quickly and it is likely to be back to its normal state in days to come that still indicates that the economy is recovering slowly and the growth is positive in nature (Sabapathy, 2013). Conclusion One way that the government of UK can involve itself in keeping its economic recovery process a reality is by supporting and keeping up with the issue of economic recovery in all its possible ways. To achieve its goal of creating full employment in most of the region in the UK so as to increase its productivity, the government is pursuing an inclusive strategy to offer job opportunities to most of its citizens. Stability in macroeconomics is a requirement for achieving this goal though it does not offer job opportunities for all the unemployment people in the region. The UK government has introduced major changes to tax and benefits system and it has also come up with active labor market policies in order to achieve this particular goal. The practices need to be supported by elastic outfitted practices and also by approachable employment policies to make sure that the labor market is in its best position to adapt without creating higher structural unemployment. For the government to advance its long-term aims and objectives, it is implementing a broad-based microeconomic strategy that is designed to address the structural loopholes in the labor market and make sure that all people throughout the UK region are in a position to engage in effective and sustaining jobs. The strategy of the government is made up of different elements so that it operates effectively and meets its obligations. The elements of the strategy include among others, the wellbeing to work policies that assist the unemployed persons to search effectively and compete for the available jobs in the market. Another element of the strategy is that of carrying out reforms in order to make work pay. The element can be achieved if the government will be in a position to introduce working family tax credit and carry out reforms in the national insurance contributions and income tax. If the government applies this strategy alongside the minimum wage, it will then be guaranteed of some minimum income that will come from the employment of all the individuals. The last element in this strategy is that of getting rid of all barriers to work and ensure that most of the people are financially secure when moving from welfare to work. There exists a necessity for the government to implement an inclusive plan for delivering stronger growth in productivity and also closing the productivity niche. The states plan addresses matters at different levels starting from regional, national and also international levels with the involvement of all stakeholders from every sector of the economy. The administration also has a belief that the productivity niche can be handled over a long period. The universal tendency of companies to keep their labor despite weaker external demands has driven a cyclical slowing down in the growth of productivity. Even though, the continuous strength of the economy of UK basics should support a resumption of stronger productivity gains in long-term basis and by doing this, the government will maintain its economic recovery process. References Blanchflower, D. (2015). As Good as it Gets? The UK Labour-Market in Recession and Recovery. National Institute Economic Review, 231(1), F76-F80. Sabapathy, S. (2013). The way forward to the tort recovery of pure economic loss for defective premises in the UK. International Journal Of Private Law, 6(3), 303. Read More