StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Economic Downturn in the United Kingdom - Essay Example

Cite this document
Summary
This essay "Economic Downturn in the United Kingdom" explores the UK’s economy which is in the middle of intensifying global downturn driven by noteworthy falls in collective demand, as the outcome of convulsive asset charges froths and shares had escorted households towards diminution in demand…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92% of users find it useful

Extract of sample "Economic Downturn in the United Kingdom"

Economic Downturn in UK Contents 1. Introduction 0 2. Concerns of Local and Central Government 3 2.1 Deterioration of Business Confidence 6 2.2 Impact on Agriculture 8 3. Actions taken by Local and Central Governments 9 3.1 Policy for supporting local businesses 10 3.2 Revamping existing policies and strategies 10 3.3 Supporting Social Housing 11 3.4 Exploring reality 11 3.5 Securing the household income 11 3.6 Support for Local employment 12 3.7 Empowering social enterprises and community 12 3.8 Resilience Nurturing 13 3.9 Tackling of susceptible zones 13 3.10 Health Projects 13 4. Conclusion 15 5. Bibliography 16 1. Introduction The global economy is struggling with the most rigorous fiscal shock ever since the “Great Depression.” Monetary market instability is at or near exceptional levels i.e. acquiesces on companies, self-governing and high-yield acquaintances have pierced along with global equity and commodity prices have crashed down. (SOROS, George, 2009) The global economic markets are experiencing substantial strain. The illustration given below (fig. 1) displays the degree of this astonishing fiscal shock and the way in which the incorporated worldwide fiscal markets have developed into. Governments around the globe have exercised extraordinary as well as synchronized acts in array to deal with the monetary dread but the studies of economists reveals that the worst is yet to be seen. Stock markets around globe have already witnessed a diminution of over 55% from their latest highs. Several investment banks have been declared bankrupt. (SOROS, George, 2009) Governments were forced to issue emergency funds in the form of rescue packages comprising in excess of a trillion US dollars. Central banks worldwide had trimmed down their interest rates in array to provide a foundation to support the unstable economies. Foremost pointers of international economic activity like shipping rates in specific had declined creating alarming chaos. Developed nations like USA and UK have endured a phase of “over–consumption” resulting in accumulation of huge amounts outstanding. (SOROS, George, 2009) It might be that a monetary incentive boasts a lesser amount of shock in these nations, where supplementary assets are available to be utilized by households to shell out their liabilities. The UK’s economy is widely acknowledged as an extremely open financial system. An economy relatively open towards globalization might induce in boosting the range of accessibility of mercantile markets to household producers, promote the transition of technology together with acquaintance and also authorizes nations to gain expertise in the areas of merchandise & services they generate resourcefully by utilizing their comparative benefit. (STAFF, United Nations, 2008) The UK’s economy is in the middle of intensifying global downturn driven by noteworthy falls in collective demand, as the outcome of convulsive asset charges froths and shares had escorted households towards diminution in demand. Escalated levels of households and commercial debts had also played a major part in persuading the extent of the reduction in “aggregate demand.” (STAFF, United Nations, 2008) With global demand commonly constricting, the prime exporting nations are apt to be excessively smacked, erstwhile effects equivalent. On the contrary, those nations where exports add up for a lesser share of manufacturing are anticipated to perform less poorly in the downturn. (STAFF, United Nations, 2008) The bank predicament and the perceptible baggage of the credit supply function are less important to the plunge in aggregate demand though; their significance should not be minimized. Fiscal loans have evidently slumped noticeably, in element as individual nations have mislaid the lending formerly granted by overseas banks. In UK this had accumulated to approximately 30% of overall loans. (STAFF, United Nations, 2008) This paper hereby examines an assortment of issues that have arisen for the local economics of various places in the UK as a result of the recent economic downturn and how local and central government can respond to them. 2. Concerns of Local and Central Government The issues faced by the local as well as central government of United Kingdom are as follows: Soaring inflation charge Credit scarcity A lesser amount of growth, and Rise in unemployment. Amplification in insolvency rates, (BLAKE, Neil, 2009) In United Kingdom, the local governments have seen a rise in demand regarding social housing leading to some depressing outcomes on the generation schemes. Out of all issues the main tribulations faced by the UK authorities are mounting joblessness and development of housing markets, which are mutually inter-related. (BLAKE, Neil, 2009) Usually, the housing market progressions are linked with end user expenditures which have an additional effect on demand all the way through their result on house construction. Figure 2 displays the indicators of turning points in which the changes are illustrated in terms of measures of activity like loan approvals along with other measures like the “RICS survey of new buyer enquiries” exhibits an even extra definite descending progress. (BLAKE, Neil, 2009) Figure 2 During the mid 2007, an era of express house-price rise in the UK fizzled out. (Fig. 3) the credit crisis might have intensified the turn down in prices with augmented risk aversion and complications in interbank loan market turning mortgages extra costly and even complex for the borrowers having low credit profiles. (COMMONS, House of, 2009) Even prior to the credit crisis, though, quite a lot of extensively utilized assessment measures alarmed that the housing market was susceptible. The typical house cost in the fiscal year 2007-08 was six times greater of regular incomes i.e. well over the average earnings ratio (PER) pinnacle in the earlier cycle and the enduring approximate of 3.8 times (Fig. 4). (COMMONS, House of, 2009) The proportion of house prices as compared with rental values was also higher than its preceding summit. Even the affordability proportion i.e. the average mortgage compensation as a proportion of median revenue was started to appear unyielding. Figure 3 Figure 4 Builders operating in UK’s housing sector are already struggling for the survival in the waves of depression as lodging sector felled by over 22% in the opening quarter alone and as of current situation they had been backed at the levels last recorded in the year 1996-97. The entire “residential investment,” comprising of newly constructed houses plus flourishing or renovations to the existing lodging stockpile is by now 3.9% beneath previous year’s summit. (COMMONS, House of, 2009) Estimating the drawback for housing venture is not an easy task. UK’s economic history advises that declining house costs are characteristically linked with considerable turn down in housing investments. Though, inhabited investment is stumpy relative to the mass of the financial system and from an enduring viewpoint and there is still an intense requirement to construct added houses in the UK. In the fiscal year 2005-06, the lodging venture contributed merely 3.9% of United Kingdom’s GDP in comparison to 6.5% in the euro zone and a recurring pinnacle of 6.2% in the USA. A wide dilemma in the UK is that customers have overstretched themselves. (COMMONS, House of, 2009) Utilization augmentation in the UK has surpassed earnings growth by approximately 0.9% per year ever since 2002-03. This is a collective increase of 4.6%, far superior as compared to any of the USA or euro zone in the similar period (Fig. 5). (COMMONS, House of, 2009) Noticeable signals of overload are too apparent in the domestic reserves rate, which has plunged to a 50 year low down of 1.1% and in the domestic sector’s fiscal scarcity i.e. a wider evaluation of domestic funding, which is operating at a record 4.4% of GDP (Fig. 6). Households in the euro zone are at present operating at a monetary excess equivalent to 2.1% of GDP. (KING, Peter, 2009) Figure 5 Figure 6 Some economical measures were declared by the central regime in array to slice back the bangs of housing crisis. Amplification in the stamp duty verge to £177,000 is incorporated in such courses. (KING, Peter, 2009) Taking into account the standard house costs in the UK, this has largely impacted as the costs had recorded a noteworthy slump however in actuality it will boast minor effect. 2.1 Deterioration of Business Confidence The shock of the credit crunch is nourishing all the way through from the housing market together with the monetary sector to all areas of the UK financial system. As the fissure amid the core rate of economic development and the present yearly GDP growth residues relatively huge, the movement in the “Confidence Index” precisely forecasted the downturn in UK fiscal activity in the opening quarter of 2008-09. (BAIMBRIDGE, Mark, 2008) According to a survey, the trade confidence had started to descend in a drastic manner since the second quarter of 2007-08 and as the turn down in actual GDP is suspected to be as spectacular, the Confidence Index points towards a harsh time for trade. The Confidence Index had indicated as a negative bias for trades of all magnitudes. It is also depressing in each segment and across all states. (BAIMBRIDGE, Mark, 2008) Figure 7 This is a noticeable transformation from Q1 as the point of view for self-assurance was more erratic across these proportions with a sense that the fiscal services sector in London was most badly exaggerated. Rising numbers of homeowners are nowadays in front of recovery orders, as verified by “Ministry of Justice figures”, with expectation that real repossessions possibly will boost by 25% - 50%. The month of Feb, 2008 witnessed the initial ascend in the plaintiff count up following 16 successive months of falling unemployment. Provided this, it is astonishing that retail sales were sturdy in the former 2 months augmented by 6% twelve-monthly. (BAIMBRIDGE, Mark, 2008) Though, statistics for Mar, 2008 were perceptibly less strong and observing throughout the fiscal year, Confidence Index notching up underneath (-) 20 exhibits that the “Hotels & Catering and Retail & Wholesale” segments are revitalizing themselves for a demanding customer decelerate. (Fig. 7) The economic sector stayed watchful and indecisive subsequently the credit crunch captivating scalps on dual sides of the Atlantic with the fall down of “Northern Rock and Bear Stearns.” (CARNALL, Colin A., 2007) With the declaration of the Bank of England’s £50bn unique liquidity proposal and privileges issues assisting huge sized fiscal institutions to prop up their balance sheets, some radiance had commenced to demonstrate at the end of the subway for this segment. Though, the Banking, Finance & Insurance sector relics as suspicious and are the next most cynical segment for the time ahead. (Fig. 8) The effect of the credit crunch is apparent as economists anticipate merely 1.3% growth in investments over the next 12 months which shows a decline in comparison with 2.8% over the previous year and imitates the problems across the country towards accessing debit capital. (TALBOTT, John R., 2008) In accumulation, there have been an increasing number of organizations reporting that access to the resources is at the moment representing a bigger confronts to trade recital as it was a year earlier. Following a progressively escalating inclination in exports growths ever since the year ending 2006-07 conclude in a boost of 5.2% in a year to 2nd quarter of 2008-09. (TALBOTT, John R., 2008) Conversely, regardless of this decline, export growth have managed to sustain growth rate over 4% which is reasonably sturdy, demonstrating amplified UK competitiveness branching from the major downgrading of currency since the “ERM crisis” in 1992. (TALBOTT, John R., 2008) Buoyancy in the Banking, Finance & Insurance sector too vestiges fragile as the impact of the credit crunch persists to be abide out, with progressing vagueness and snags in the inter-bank markets. Ambiguity still remnants over the degree of subprime-associated write-downs. Yet, the Bank of England’s unique liquidity proposal and the propping up of outsized banks balance sheets with novel privileges issues from key players in this segment points towards some luminosity at the last part of the subway. Decline in self-assurance were witnessed across all of the zones, with no area at the moment gaining net +ve in point of view. Four additional segments emerge to have been predominantly exaggerated by the panorama of a noteworthy slowdown in UK customer expenditure in 2008 i.e. “the Hotels & Catering, Retail &Wholesale, Communications and IT sectors.” The outlooks for the “Business Services, Manufacturing & Engineering and Primary sectors” are the least cynical, although still on balance negative. (Fig. 7) (TALBOTT, John R., 2008) Figure 8 2.2 Impact on Agriculture Prices of agriculture land on the other hand are sky high due to the increase of prices of foods globally and possibly will result in farming viability improvement resulting in discouragement of builders from development of green-fields for site of employment. Although only residential developments have been recently found to deliver returns large enough to make this workable, this is now vacillating otherwise. A limited number of sites are anticipated to come forward providing opportunity of employment. Hence, public sector is expected to play an increased role by intervening and bringing more such sites forward. Agricultural diversification is not required to the same extent as the viability of farming increases. Less availability of rural schemes for workspace may emerge as result of continued pressure from farmers, particularly due to the declines in the interest of funding such ventures. Due to the impact of global recession on UK’s economy, introduction of new businesses and business survival rates in UK had felled due to the increased competitive business environment which could result in future joblessness’s. However, the local governments see its impact minimal in district areas as the current unemployment rate is lowest ever in the country and further probably will result in a worse hit to the urban areas. 3. Actions taken by Local and Central Governments A number of responses have been planned by local authorities in order to deal with issues arising from the economic downturn. The most common option for creating efficiencies is to reduce the energy and fuel usage together with option of using councils own reserves. The most common option used is to freeze the recruitment and inductions of new employees as the expense of the existing employees are difficult to meet. (GREAT BRITAIN: PARLIAMENT: HOUSE OF COMMONS: TREASURY COMMITTEE, John McFall, 2007) This freeze is observed in some precise areas of recruitment across the authority as a whole and 21% planned for deliberated redundancies with 7% scheduling for obligatory redundancies and remaining 42% suggest that compensatory saving will be made by them somewhere else. Cuts in expenditures over culture and leisure comprising of art galleries, sports and tourism development were also taken into consideration together with the other cuts. One of the most constructive ways of make up for these shortfalls was assessing the usage of non-school reserves usage. Currently, average reserves are at 13% as compared to 8% in the year, 2002 and 2003, respectively. It has been reported by majority of the regulating authorities that as a consequence of the economy’s loom towards downturn there will be a raise in demand for “council services” in rejoinder to which they have altered there intermediate term monetary plans by the local governments. A few more actions taken by the governments collectively are described below. 3.1 Policy for supporting local businesses At this time of global economic downturn, it is extremely important for the authorities both at centre and at local levels to support local businesses. Accessible partner programs and authorities are working closely together so that businesses can be provided with rationalized and efficient processes. This kind of support is essential for businesses in their struggling times and will help building support in local areas. Businesses also get support via authorities as the rate relief were announced for small businesses by encouraging eligible businesses for greater uptake of rate relief available. (GREAT BRITAIN: PARLIAMENT: HOUSE OF COMMONS: TREASURY COMMITTEE, John McFall, 2007) Furthermore, governments had taken initiatives to identify those businesses which are at risk within economy and also by assisting organizations and potential sources by advice and also by identifying suppliers at risk of large organization who may suffer from insolvency. 3.2 Revamping existing policies and strategies Existing policies and strategies of councils are reviewed once again. This review is necessary in order to understand the impact of downturn on councils and what kind of changes do councils need to make to these plans. It is important that best case and worst case scenarios should be considered by councils keeping in view the long terms targets and goals. However, it can be done by re-visiting the strategies for economic development to identify targets. In the current economic climate, these targets are those which are implausible to be met. (GEROSKI, Paul, 1997) The impact of short term and long term recession can be considered by revising the strategies for community and in the light of current downturn, by refreshing the LAA process in order to meet the key economic targets. 3.3 Supporting Social Housing This solution of buying land and properties which are not being sold have been aggressively taken up by some authorities and are exploring it with keen interests as it will help them to ease social housing pressure. Councils are considering in fact a few councils have adopted this option of providing mortgage support. This program allows families, individuals and couples to buy home on the open market which they cannot afford otherwise. This will allow them to buy property of some amount fixed by local authority and a fixed percentage of the total value will be paid by authority. (GEROSKI, Paul, 1997) 3.4 Exploring reality In order to understand the impact of the downturn and to identify the areas with vulnerable economies, the local authorities have worked in a close formation with public, social and private sectors. This effort requires discussion by creating task groups and forums. Existing forums like “MAA process” and Strategic partnership could also be exercised for this rationale. Furthermore, collection of data and evidences relating to business, values of land and employment are used effectively by these forums. Partners and employees in different sectors are engaged by local authorities to have closer view of the impacts of recession in a particular community. Also, partner on regional and sub-regional levels are contacted so as to encourage sharing of ideas and information by effective collaboration and co-operation. (CARNALL, Colin A., 2007) 3.5 Securing the household income It is evident that the most significant impact of household is and will in future be on household. For this, special consideration needs to be given to the means and ways to support communities in long term. In order to help secure and support incomes of local households, the local agencies, communities and voluntary sector need to be supported as the provide benefit advice, information on utility bills and counselling about debts. (TALBOTT, John R., 2008) Further, councils have tied up with partners in order to provide energy advice. This advice helps supports households to gain information about making their homes and businesses energy efficient and will help households increase level of income in their locality. In addition to this, households can be provided with facilities of loans for installing micro-generation technology like “solar panels, micro-hydro-technology or roof-mounted winds.” This will help them reduce their fuel bills but are not environment friendly. (TALBOTT, John R., 2008) 3.6 Support for Local employment In deprived communities, the rise in unemployment may increase the pressure in the reduction of projects which may reduce wordlessness. However, it becomes important to maintain and strengthen these projects. Local authorities had supported and taking initiatives for local employment through partnerships. Local authorities keep their focus on the wordlessness programs and should aim to bring back households to work. Further, they have developed enduring plans for the long run to tackle this issue of unemployment by considering the unemployed in current recession and hence should take effective measures for this trend in future. There is an intense need to place focus on internship programs and training. Considering these programs are essential so that persons can get back to job and will help authorities to develop capacity in the organizations for the future. It is also important that current trend of the market and its anticipated growth should be read properly before taking initiative for these internship and training so that skills can be fostered to respond effectively to the emerging markets. If this issue of unemployment is to be tackled effectively then it is important that young people should be targeted for these employment programs and trainings. (HOWELLS, Peter, 2008) 3.7 Empowering social enterprises and community In retort to the present economical downturn, the role of social enterprises can be very important. In a downturn, in order to the raise in income and local employment generation and skills training, a route was provided to communities by social enterprises in an applicable way. This support was provided by local authorities by supporting “LETS developments, local allotments and community orchards and re-opening of post offices” at local level with the partnership of social enterprises. (HOWELLS, Peter, 2008) 3.8 Resilience Nurturing This is an important aspect to go through the downtime. This is achieved by developing local resilience with the help of adaptation and innovation followed by working closely with partners by training, guiding and supporting individuals at Jobcentre Plus and Business Link. Local authorities also need to develop this capacity in-house so that help can be provided to the services managers facing increased financial pressure. (HOWELLS, Peter, 2008) 3.9 Tackling of susceptible zones Local authorities are underneath immense stress to make economic downturn responses in their respective areas. Local authorities with aid of central government work closely with partners through existing structures whenever any new project is to be implemented. Most probably for the implementation of the project there might be various ideas and proposals available. (SAWYER, Malcolm C., 2005) These ideas and proposals determine what actions are to be taken into a particular area and these considerations are also very important to have clear picture that how the proposal will secure homes of the residents or will increase household income, for local trainings and jobs result in increase or maintenance of opportunities, help local businesses and people to initiate improvement in financial advice and reasonable credits, help protect the local businesses, provide long term as well as short term effective responses and at last provides financial and personnel resources. (SAWYER, Malcolm C., 2005) 3.10 Health Projects Councils should be provided with an opportunity arising from this downturn that they can explore new areas of economic development. These developments in local areas may provide benefits for the environment and specifically health. These measures may include development of walking and cycling infrastructure which in ling term will benefit the tourism and health. Furthermore, they can turn any business which is about to fail or is failing into a community. (SAWYER, Malcolm C., 2005) In addition to this, this category can be expanded to have outlets offering healthy foods, space for community activities, for older people can provide day facilities and for social interaction some evening opportunities can be offered. Authorities can take an initiative to save energy by using sensor-enabled street lights so that energy can be saved when someone will pass by these lights will turn on only then. (GEROSKI, Paul, 1997) This health agenda bears a lot of importance in the context of existing economic downturn and is likely to continue in the recent future. Local authorities need to build partnerships on these issues and specifically local partners. However it is important to note that not all ideas are potent enough to be taken forward. It thus becomes important for local authorities to prioritize the issues in the local areas so that effective planning can be done on them. In the process of prioritizing theses ideas it is important to take help of the partners and also a great support from central government. On Jan, 19 2009 the UK Government declared an additional package to promote amplified deliverance of loans by banks. It was also declared that the active supports to banks are to be augmented and post the pledge of RBS to increase their fiscal lending by £6 billion in the current financial year; the Government also declared to raise its stake in RBS up to 70 %. Though, the key in element of the Government package is an “asset protection scheme” that facilitates banks to procure governmental indemnity against added losses for possessions denominated regardless of its currency on their books against suitable fees. The proposal is likely to be available for a minimum of five years. The scheme also binds volunteering banks to enter into legal contracts giving their consent to raise the amount of lending over the contract period. “Northern Rock”, which was nationalized previous year, is also entitled to face a absolute policy turnaround. To pace up the slowing economy, the treasury of United Kingdom had also given its authorisation to “Bank of England” to acquire premium business assets, primarily value up to £50 billion as of Feb, 2nd 2009. It is anticipated that this will perk up economic stability and lessen the fiscal constrictions on outsized organizations. The government has also extended the “credit Guarantee Scheme” to be extended till the current financial year, which was due to be expired in first week of April, 2009. 4. Conclusion The international economy has arrived at a crucial turning point. A ready to burst downturn in the United States of America have started to leave its infectious impact across borders, resulting in raise in unemployment and deteriorating living standards for a great number of population. The economy of United Kingdom is predominantly open to these harsh winds, in spite of Gordon Brown's contention that 61 successive quarters of intensification will continue to lag the country. As if expecting Brown, “Karl Marx” one time stated “trade & commerce is at all times thoroughly sound and operate in complete sway, pending the crumple unexpectedly overcomes them.” At the present “London's foreign exchange markets” account for double the NYC’s portion of trading and preceding year hosted the majority of fresh shares issued. The city of London is consequently extremely bared towards the credit crunch for instance, the “Northern Rock bank” tragedy. Throughout utilizing the very intelligent, but maligned monetary tools contemplations up in the previous decade to unnaturally inflate credit via bunching up and repackaging arrears, the vendors have coped with to create UK’s foremost main sprint on a bank ever since the 19th century. With the intention to prevail over the dilemma of contact to and outlay of finance, the government should consider the concessional finances to be provided to companies in need. To evade the instances of collapse of financial institutions it is must for the government to reschedule the loan repayments. The UK government has come up to a stimulus package to help out industries that comprises several requests made by the key players of private segments. This paper here highlights the reasons responsible for the economical downturn in UK in addition to the communal and commercial issues that arises due to the slowed growth of United Kingdom’s financial system. Lastly, this paper demonstrates the measures already taken and future implementations on the level of local governments as well as central to minimize the impact of worldwide economical downturn on the country’s economy and on the lives of UK citizens. . 5. Bibliography BAIMBRIDGE, Mark. 2008. Britain, the Euro and Beyond. Ashgate Publishing Ltd. "BAINES, Mo. 2008. The impact of the economic downturn on local government finances." BLAKE, Neil. 2009. The Credit Crunch and Regeneration: Impact and Implications. CARNALL, Colin A. 2007. Managing Change in Organizations. Financial Times Prentice Hall. COMMONS, House of. 2009. Housing and the Credit Crunch. GEROSKI, Paul. 1997. Coping with recession: UK company performance in adversity. Cambridge University Press. GREAT BRITAIN: PARLIAMENT: HOUSE OF COMMONS: TREASURY COMMITTEE, John McFall. 2007. Globalisation: prospects and policy responses. The Stationery Office. HOWELLS, Peter. 2008. The Economics of Money, Banking and Finance: A European Text. Financial Times Prentice Hall. "HUNT, Ben. 2007. U.K. Inflation and Relative Prices Over the Last Decade how Important was Globalization? International Monetary Fund." KING, Peter. 2009. Understanding Housing Finance. Taylor & Francis. RILEY, Rebecca. 1998. The UK economy. "SAWYER, Malcolm C. 2005. The UK Economy: A Manual of Applied Economics. Oxford University Press." "SOROS, George. 2009. The Crash of 2008 and What It Means: The New Paradigm for Financial Markets. Perseus Books Group." STAFF, United Nations. 2008. World Economic Situation and Prospects 2008. United Nations Publications. "TALBOTT, John R. 2008. Contagion: The Financial Epidemic That is Sweeping the Global Economy. and How to Protect Yourself from It. John Wiley and Sons." Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(To Discuss The Various Issues That Have Arisen/worsened For The Local, n.d.)
To Discuss The Various Issues That Have Arisen/worsened For The Local. https://studentshare.org/other/2048091-to-discuss-the-various-issues-that-have-arisenworsened-for-the-local-economics-of-various-places-in
(To Discuss The Various Issues That Have Arisen/Worsened For The Local)
To Discuss The Various Issues That Have Arisen/Worsened For The Local. https://studentshare.org/other/2048091-to-discuss-the-various-issues-that-have-arisenworsened-for-the-local-economics-of-various-places-in.
“To Discuss The Various Issues That Have Arisen/Worsened For The Local”. https://studentshare.org/other/2048091-to-discuss-the-various-issues-that-have-arisenworsened-for-the-local-economics-of-various-places-in.
  • Cited: 0 times

CHECK THESE SAMPLES OF Economic Downturn in the United Kingdom

UK's over-Reliance on Deregulation and Current Economic Crisis

Bank borrowing in the European market decreased significantly ending in further risks of the stability of the financial system in the united kingdom.... Debt accumulated in the deregulated industry of the united kingdom through the rising acknowledgment on the amount of bad debt in the system was much bigger than that it was previously presumed to be.... the united kingdom was doubtful on which banks could withstand the bad debts and stopped the lending services that they offered, leading to an entire market seize up....
11 Pages (2750 words) Essay

Global Financial Crises: Differences, Impacts and Implications

Other reasons include the American economic policy with Europe, where the united States aimed to protect the country's companies and imposed several polices such as charging high taxes for imports.... Global Financial Crises: Differences, Impacts and Implications The 2007/2008 credit crunch and the subsequent Euro zone crisis have similarities with the 1930 great depression such as the downturn of the economic market.... Further, the economic situation in 2008 could not be solved by use of monetary policies since the economy seemed to be in a liquidity trap....
4 Pages (1000 words) Essay

Macroeconomic Policies of UK Government in Achieving Objective of Low Inflation

Currently, the rate of unemployment in the united kingdom is 7%, while the inflation rate is 2.... This essay concentrates on the efforts and measures put in place by the united kingdom's government to tackle inflation.... Mills argue that the united kingdom has over the years had elaborate strategies to counter high inflation; the strategy targets the underlying rate of inflation (112).... In a bid to cushion the economy from inflation, the united kingdom's government permits some level of inflation in the economy....
4 Pages (1000 words) Essay

Survival and Positive Growth during an Economic Downturn

The current recession too had the stock markets crashing with the heavy downturn in the construction industry segment.... It is therefore aimed at providing inputs from the financial perspective of business during the economic downturn.... To begin with, let us get acquainted with the "Great Depression of the 1930's" and the current economic downturn.... The effect of this economic downturn is the huge cut down on spending by corporate houses leading to widespread unemployment....
8 Pages (2000 words) Assignment

Proper Role of the Government in the Economy

The spending of the funds does not often take place until a long period has passed after the downturn occurs and has the ability to prolong the downturn through crowding out the investments that are productive and spending that would have occurred otherwise (Payson 78).... This work called "Proper Role of the Government in the Economy" describes the major roles of the government in economic stability, with the inclusion of the government-run institutions....
8 Pages (2000 words) Research Paper

The UK's over-Reliance on Deregulation and Current Economic Crisis

the united kingdom has a majority that believes that if governments and banks create an economic downturn, there are up to some good motive.... The following paper will look into the factors that propose that the over-reliance of the united kingdom on the deregulated industry, and depreciating euro, has fostered the existing fiscal depression (Nanto, 2009, p.... Reliance on lesser flexibility within bond marketsThe alleged spending cutbacks by the government were observed to be essential by contrasting the economies' of the united kingdom with Greece and Ireland....
12 Pages (3000 words) Case Study

Banking System in the United Kingdom: Reliance, Deregulation, Economic Downturn, Policies

The paper 'Banking System in the united kingdom: Reliance, Deregulation, Economic Downturn, Policies' is a meaningful example of a finance & accountingcase study.... The paper 'Banking System in the united kingdom: Reliance, Deregulation, Economic Downturn, Policies' is a meaningful example of a finance & accountingcase study.... he following information will attempt to show how overreliance on the banking industry in the united kingdom has affected the economy in an economic downturn or recession....
13 Pages (3250 words) Case Study

Effects of the Economic Downturn in Risk Management

Large companies in Denmark, Sweden, Slovakia and the united kingdom, for example, seem to have been the hardest hit while small ones in Portugal, Lithuania, Germany, and Poland have been the most intensely affected.... Over the years, the united kingdom's construction sector has continued to grow especially in the areas of home building, commercial property, and retail.... The paper "Effects of the economic downturn in Relation to How Risks are Managed in Construction Activities" is a great example of an essay on the economy....
6 Pages (1500 words) Essay
sponsored ads
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.
Contact Us