The fifth largest Economy in the world is the Economy of the United Kingdom also known as the British Economy and this is on the basis of the market exchange rates; in terms of purchasing power parity it is sixth largest in the world. In Europe it is the second largest Economy, second only to Germany’s Economy. There are three countries which make up the British Economy namely, England, Wales, Northern Ireland and Scotland. This paper will throw light upon two macroeconomics principles.
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The British economy is facing two major problems as of now namely, the GDP (Gross Domestic Product) growth is really slow and the rising rate of Inflation has taken on a toll on the British Economy. The bank of England is trying everything possible to stimulate the economic growth in the British Economy; the cut in the interest rates proves the same. Currently the British Economy can take a little satisfaction from the fact that the employment rate has risen and there is less unemployment found in Britain than what it used to be earlier.
The above chart shows that the gain that the British economy witnessed in the year 2007 has not been repeated in the 1st quarter of the year 2008. The economy witnessed no gain in the second quarter of the year 2008. The British economy is being affected by various reasons; some of the most important are the credit crunch in the various economies of different countries, the inflation rate has gone up because of the rise in oil prices and there are numerous other reasons for the same.
Big Banks in England like Northern Rock are facing a really tough time in keeping up with the demands of the customers. Banks are cancelling the credit cards of the customers, so all these events show that all is not well in the British Economy and the government and the Bank of England have to do something about this before its too late.
British Credit Crunch. In Wealth Daily. 2009. Web.
British Economy not looking good. In Global Politician. 2009. Web.
The Impact of Credit Crunch. In World Socialist. 2009. Web.
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The Worth of the Dollar. In The Wall Street Journal. 2009. Web.