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L100 - Performance of UK Economy - Individual Report

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UNIVERSITY OF PORTSMOUTH

   

Economics (L100)

   

Added on  2020-03-04

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In this document, we will discuss issues considering the performance of the UK economy. Analyzing the UK economy's growth rate and the measures accepted by the UK government to achieve production output performance. Explanation of the types and causes of inflation, as well as government policies aimed at achieving price stability. Types of Unemployment in UK economy, Measures taken by the UK government for achieving full employment, Trends of Inflation based on Inflation rate, Explaining types and cause of inflation, Cause of inflation in UK economy, Government measure for achieving stable price

L100 - Performance of UK Economy - Individual Report

   

UNIVERSITY OF PORTSMOUTH

   

Economics (L100)

   Added on 2020-03-04

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Running head: PERFORMANCE OF UK ECONOMY PERFORMANCE OF UK ECONOMYName of the StudentName of the UniversityAuthor’s Note
L100 - Performance of UK Economy - Individual Report_1
1 PERFORMANCE OF UK ECONOMYTable of ContentsIntroduction......................................................................................................................................2Discussion........................................................................................................................................2Analyzing growth rate in UK economy.......................................................................................2Macroeconomic indicator determining UK’s economic performance........................................3UK economy’s performance trends.............................................................................................3Measures adopted by UK government for achieving production output performance...............5Unemployment trends based on Unemployment rate..................................................................6Types of Unemployment in UK economy...................................................................................7Measures taken by the UK government for achieving full employment.....................................8Trends of Inflation based on Inflation rate..................................................................................9Explaining types and cause of inflation.......................................................................................9Cause of inflation in UK economy............................................................................................10Government measure for achieving stable price.......................................................................10Conclusion.....................................................................................................................................10References......................................................................................................................................12
L100 - Performance of UK Economy - Individual Report_2
2 PERFORMANCE OF UK ECONOMYIntroductionThe United Kingdom (UK) economy ranks fifth as appraised by nominal GDP and ninthas accounted by GDP per capita in the globe. UK’s service sector contributes to around 80% oftotal GDP in the economy. In addition, the aerospace, pharmaceutical and financial servicesindustry plays a crucial function in contributing growth of this nation. The UK’s GDP increasedat lower rate by around 0.2% between 2016 and the first quarter of 2017. The growth of UK’sGDP slowed down due to fall in retail and manufacturing industries, but the manufacturing andfinance industries continues to grow at a higher rate. Another indicator that slowed thiseconomy’s growth is inflation rate that rose by around 2.6% in 2017. Besides, the rate ofunemployment in UK falls to 4.5% in 2017 from the previous year, which was 4.9%. This reportreflects on how the macroeconomic indicators including GDP growth, rate of unemployment andinflation impacts on the country’s economic performance (Antal and Van den Bergh, 2013).Furthermore, UK’s economic performance trend over the years has been discussed in this report.In addition, measures adopted by the UK government for achieving production output, fullemployment and stable price are also highlighted in this report.DiscussionAnalyzing growth rate in UK economyGDP is termed as the total value of products produced within the geographical borderover a certain period. Real GDP is one of the macroeconomic indicators that measure theeconomic output value with respect to its change in price (Argy, 2013). GDP per capita measuresthe economic output of nation that deems on respective countries GDP with respect to its entirepopulation.However, rise in per capita GDP signals improvement in living standards and
L100 - Performance of UK Economy - Individual Report_3
3 PERFORMANCE OF UK ECONOMYproductivity. Respective nation’s government uses this indicator for analyzing the purchasingpower and growth of the economy. Growth rate in real GDP determines the change in economy’sGDP in terms of percentage over the years. Macroeconomic indicator determining UK’s economic performanceThe countries consider real GDP as a good index in determining its performance as itinvolves the fluctuating product value expressed in terms of money (Chaiechi, 2012). However,it gives an idea about the total output of the nation with decrease in distortion because of certainfactors including inflation and fluctuations in currency rate. Real GDP per capita is mainlyadjusted for rate of inflation for determining the workforce productivity of the nation (Nalewaik,2012). On the contrary, this indicator does not consider technology influence over the productionoutput. Hence, these indicators help in comparing the countries production output andforecasting recession in an accurate manner.UK economy’s performance trendsRecent data reflects that per capita GDP in UK in the year 2016 was 40,096 and 37,813in the first quarter of 2017. This highlights on the fact that the GDP of this economy declines by5.69% in the present year. The UK’s real GDP growth rate averaged to 0.61% over the years.The service and retail sectors of UK contributed mainly to this slow GDP growth of UK (Denisand Kannan, 2013). This sector increased by 0.8% in 2016 but in the first quarter of 2017 thegrowth slowed down to 0.3%. In addition, UK’s production sector has reduced to 0.4% in quarter2 of 2017 from the previous year. Moreover, the deceleration in the above sectors occurred dueto increase in prices. After Brexit, the currency value of UK decreased by nearly 15% to 20%.However, the GDP in UK showed a reduction of 0.7% from 2016 to 2017 and this reflects adownward trend of the nation’s current performance. The statistic reflects that real GDP growth
L100 - Performance of UK Economy - Individual Report_4

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