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But this hope was to prove a mirage as the trend reversed in subsequent months. Though the UK took a little while to catch up with the crisis in the United States, at the beginning of the second quarter of 2008, the region’s economy was in acute recession. It has been close to two years since the onset of recession in the UK and the economic condition of the region remains weak and vulnerable. While some economists assert that the turnaround is already underway, others take a more pessimistic view. This essay will try to answer this important question, by way of perusing scholarly and news media resources. (Lynch, 2009)
The recession that began in early 2008 gave no signs of recovery even after one full year. As the industry data for third quarter 2009 revealed, the economy shrank a further 0.4 % in during this period, which completed the sixth consecutive quarter in decline. As per the Office for National Statistics, by this time “output has slumped 5.9% since the onset of recession - almost as bad as the 6% slump seen in the early 1980s. The lingering decline came despite interest rates at a record low of 0.5% since March, additional Government spending and an unprecedented pounds 175 billion boost to the money supply through quantitative easing” (Lynch, 2009). But even as the UK was enduring this economic decline, neighbouring countries such as France and Germany have already shown early signs of recovery.
While neighbouring countries in Europe were already into recovery, it was only during the heralding of year 2010 that the UK economy showed clear signs of recovery. Financial experts have declared that technically the UK economy has emerged from recession, but concerns still remain about the stability and strength of the pound against the dollar and the euro. Due to the internal economic turmoil, there is a strong possibility for deflation of currency during
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The rapid increase in production costs due to higher costs of doing business resulted in inflation; thereby reducing consumer purchasing power and real incomes. For instance, the consumers sharply cut down their spending amid low real incomes, which led to negative GDP growth, aggregate consumption, production and saving (BBC Article, 2008).
This economic crisis which reached peak in 2008 had shaken the foundation of UK economy in a destructive manner. The recession introduced instability in all sectors of British economy and was hardly hit on the banking and housing sector. According to (The Economist)“The economy of UK shrank by 5% last year, this was biggest fall since the Great Depression.
It is very sad to point that many people have developed mental problems and many have become addicted to drugs. Abuse of drugs has been very common among youths and adults in our community nowadays. Many un-Godly issues like family breakdown, school dropout, immorality, and mental illnesses might often be a consequence of excessive drugs abuse.
Several macroeconomic indicators change mostly in the same way. Apart from change in employment status, other changes that take place involve changes in capacity utilization, investment spending, business profits, household incomes and inflation. All these fall during this period.
The result of all this is the debt of financial sector has risen sharply from (Calbreath, 2008). It now stands at 74 percent higher than it was in 2000 and 10 times higher than in 1980. As a result of globalisation the indicators in UK economy too have been dependent on cues from US markets.
downturn in the financial sector and this has triggered problems in banking, employment, financial markets and other aspects of the different economies worldwide. The United Kingdom (UK) has been experiencing symptoms of the recession for some time now and has now admitted that
According to National Bureau of Economic Research (NBER), recession is a “significant decline in economic activity lasting more than a few months” (Recession Org website). However, a general view about regression
Most declines have been trivial in the regional and national levels, with the exception of a few serious cases like the East Asian crisis of 1997 (Radelet and Sachs, 1998). It triggered short and long standing effects in nations,
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