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Explain the negative and positive issues that are now affecting the health of the UK economy and so, justify whether you believe that the UK economy is likely t - Essay Example
Author : wisozkike
Pages 8 (2008 words)
The year 2007 was a year of surprises for the UK economy. The UK economy fared really well as per the market expectations. Comparing the forecasts made by the market analysts in December 2006 to the actual data available at the end of year 2007, the results are really surprising: the growth was stronger in 2007 than was expected…
The sub prime crisis meant the fall in the value of US dollar against most currencies of the world. The tentacles of subprime crises choked the progress of the UK economy to some extent and forced an interest rate cut. However with the expectation of the global economy to increase by 5% the UK markets expanded rapidly. Let us now compare the growth of UK economy with the other major economies of the world and discuss the various issues that affected the UK economy in 2007. We will also see the positive and negative issues that are now affecting the UK economy in 2008 and see whether the UK economy will continue its good run or struggle in 2008.
In 2007, the growth in the emerging markets was stronger than expected and the growth in the developed countries was below the expected level. However, among the developed economies, UK was an exception recording a growth higher than the expected level. Growth in the UK economy was 3.1 % which is about 0.7 percentage point better than the expected growth. Growth in US economy was 2.2% against 2.3% predicted at the start of the year 2007. Growth is Japan was 1.8% while the expected growth was 2%. It is important to note that US and Japan are the largest economies of the world. ...