UK Economic Recovery Post-Crisis

This assignment examines the impact of the financial crisis on the UK economy. It analyzes key economic indicators such as government debt, borrowing, inflation, and GDP growth from 2012 to 2015. The report highlights the challenges faced by the UK during this period and discusses the measures taken by the government to stabilize the economy. The assignment concludes with recommendations for future economic policy in the UK.

BUSINESS ECONOMICS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Analysing the economic performance of UK in between 2011- 2015...................................1
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The growth of a national economy depends over proper policies and plans made by the
governmental authorities in context with managing the macro economic factors. There are
various important economic factors such as GDP rates, inflation, unemployment, budget deficit
and government debts which were needed to be balanced and managed by an economy. In
present report, there will be study over economic environment and changes in economy of UK
over period 2011 to 2015. Additionally, the report will be based on qualitative analysis and have
the accurate outcomes.
Analysing the economic performance of UK in between 2011- 2015
In relation with economic environment of UK after global financial crisis, governmental
authority in nation were planning many policies and techniques to overcome with the impacts of
financial crisis. Therefore, there are various macroeconomic factors which will be addressed as
per their records for the period of 2011 to 2015. Thus, it will be helpful in analysing the growth
of UK as well as the ability to meet debts on right time (The UK economy at a glance, 2018).
Moreover, to analyse economic stability and efficiency of nation, it will be helpful in managing
performance of country.
GDP per capita:
To identify GDP per capita of a nation there is need to have appropriate records of
Growth rate by analysing the domestic production over population (Mumtaz and
Theophilopoulou, 2017). Similarly, there has been analysis over UK's GDP per capita for the
year 2011 to 2015.
Years Growth in percentage
2011 1.50%
2012 1.50%
2013 2.10%
2014 3.10%
2015 2.30%
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2011 2012 2013 2014 2015
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
1.50% 1.50%
2.10%
3.10%
2.30%
Growth in percentage
Linear (Growth in percentage)
Interpretation: In consideration with above mentioned records of UK's GDP growth
rate, it can be said that there has been impacts of global financial crisis over economy. Therefore,
it is because in 2011 the growth rate was 1.5% which remains same in 2012. Thus, it can be said
that due to such impacts, there has been increment in the number of imports as compared with
exports which demonstrate here that nation is not having appropriate domestic production. Thus,
in year 2013, GDP rate has been increased to 2.10% which is a positive sign it ascertains that the
government has made better policies which were fruitful for small scale enterprises. Therefore,
the main motive of UK government is to make increment in operational aspects of small scale
business and they have focused on improving performance of local business. In 2014, GDP rate
has been increased to 3.10% which is highest and most favourable outcomes in UK history. In
2015, it reduced to 2.30% which is comparatively appropriate. Moreover, in relation with
improving the GDP rate, more precisely there is need to have better planning, monitoring and
execution of economic system in UK.
Inflation:
This is a condition where there will be sustain increment in the value of goods and
services. Therefore, the rise in the prices ascertains that the currency value of the nation is not in
good state (Lee and Werner, 2018). Similarly, there following records of the rate on UK's
economic condition and inflation rates over the period 2011 to 2015 (Inflation rate: Percentage
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change year on year of the Consumer Price Index (CPI) in the United Kingdom (UK) from 2000
to 2016, 2017).
Years Inflation rate
2011 4.50%
2012 2.80%
2013 2.60%
2014 1.50%
2015 0.00%
2011 2012 2013 2014 2015
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
4.50%
2.80% 2.60%
1.50%
0.00%
Inflation rate
Linear (Inflation rate)
Interpretation: In accordance with the inflation rate of UK as per 2011 to 2015. There
are huge variations in inflation rate of the country. Thus, in 2001, it was 4.5% which is the period
just after global financial crisis. Moreover, the impacts of such crisis has led rise in the prices of
essential commodities. Thereafter, policies and plans generated by the economics in nation have
positive impacts as inflation rate has been reduced in 2012 as 2.8%, 2013 as 2.6%, 2014 as 1.5%
and in 2015, it was 0%. Thus, it can be said that planning of government and the currency rate of
nation has high growth in the international market which leads it to have stability in economy.
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Unemployment:
This is the situation where the number of employees are more but the numbers of jobs are
less (Breuss, 2017). Thus, to measure unemployment rate of a country, there is need to mention
the unemployed workers over the total labour force. Similarly, to identity UK's unemployment
rate, it can be seen as follows:
Unemployment rate = Unemployed workers X 100 Total labour force
Years Unemployment rate
2011 8.10%
2012 8.00%
2013 7.60%
2014 6.20%
2015 5.40%
2011 2012 2013 2014 2015
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
8.10% 8.00% 7.60%
6.20%
5.40%
Unemployment rate
Linear (Unemployment rate)
Interpretation: As per above mentioned analysis, it can be said that the unemployment
rate in UK is comparative higher. In the year 2011, it was 8.10% which was the highest point.
Thus, it was post effect of financial crisis over the UK market, the large number of organisations
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have been demolished to reduce the costs of production, companies has started reducing their
number of employees. Moreover, it has the negative impacts over reduction in number of
employees in the company. In 2012, it was 8%, in 2013, it was 7.60%, in 2014, it was 6.20 and
in 2015, it was 5.40%. Thus, over the period, there has been drastic changes in UK economy
which leads into adequate modification that has created the more job opportunities for
employees.
Budget Deficit:
This is situation where expenditure of a nation increases as compared with its revenue. It
ascertains poor financial health of the country which means that the government has planned
budgets for the operations in the economy but the expenses lead to exceed costs of such projects.
Similarly, there has been analysis over the UK's budget deficit over period such as:
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Illustration 1: UK annual borrowing
(Source: UK Budget Deficit, 2017)
Interpretation: In relation with the above mentioned graph which demonstrates the
ability of nation in meeting debts on time. Therefore, the net borrowings of UK in 2011 were 136
bn. in 2012, it was 116 bn, in 2013, it was 122 bn and in 2014, it was 102 bn. However, in 2015,
it was 94 bn. Moreover, in accordance with the ability of UK in meeting the debts is quiet
favourable and have the positive outcomes as the debts are tends to reduce over the periods.
Government Debt:
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Illustration 2: Governmental debts UK
(Source: United Kingdom Government Debt to GDP, 2017)
Interpretation: These are the debts or borrowings which the government has obtained
from other nations to meet the financial requirements. However, in relation with such operations,
it can be said that in 2011, the debts were 81.3 bn. In 2012, it was 84.5 bn and in 2013, it was
85.6 bn. However, in 2014, it was 87.4 bn and in 2015, it was 88.2 bn. Therefore, it ascertains
that the country needs to manage the debts and balance the economy.
CONCLUSION
On the basis of above report, it can be said that impacts of financial crisis has led UK in
the unfavourable state for the while. Thereafter, accurate monitoring and the economic planning
has balanced the financial circumstances in nation. Moreover, here, the government needs to
focus over improving the liquidity of nation. Furthermore, the currency rate of nation is quiet
sufficient so as to manage exchange market there is need to have proper analysis of imports and
exports.
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