UKs Economy in Europe Essay -- Economics Economy England United Essay

UK's Economy in Europe When one talks about a strong economy, a few key economic indicators will get mentioned; inflation, unemployment and economic growth. These are considered the three main macroeconomic indicators of any economy. To define a strong economy in the simplest form you must have a low rate of inflation, low unemployment and steady economic growth. During this essay there will be comparisons between other European countries (e.g. France, Germany, Luxemburg, Belgium, Spain, Italy) and these economic indictors mentioned as well as others. We will start to look at inflation rates. "The British economy has slowed over the past 12 months, but remains among the strongest in the developed world, a report has said" (BBC News Online). Last month the Underlying rate of inflation in the UK remained unchanged at 2.3%, which is below the governments target rate of 2.5%, this is good for the economy. The headline rate of inflation, which includes mortgage interest payments, fell last month by 0.4% to 1.7%. These figures show the rate at which prices are increasing. When we compare the UK's annual inflation figure of 1.2% to that of Germany and France (-0.6% in October), which is around the 2% mark, it seems that our rate is quite low and therefore good for our economy. The Eurozone inflation is expected to be 2.1%; this is measured by the Monetary Union Index of Consumer Prices (MUICP). By looking at this we can see that this figure is very close to the UK's inflation rate. On the whole inflation in the UK is at a lower rate than that of its European neighbours, which is an indicator of a strong economy. When we look at unemployment in the UK we can see that it is around 900,000 or 2.3%. This is the lowest it has been since the 1970's and is at a lower percentage rate than Japan and the USA. Germany who has recently announced that they have just entered a recession has a very high rate of unemployment at around 8.0% and France, Finland and Spain even higher. The UK, Netherlands and Luxemburg are amongst the lowest unemployment rates in Europe. "Unemployment is up again in France and Germany, in a sign that the eurozone's two biggest economies are still in the grip of a downturn" (BBC News Online). France and Germany have the largest economies in Europe and recent figures show that unemployment increased by 15,000 a... ...ong performance is reflected by such indicators as solid growth and forecasts for next year predicting an annual growth of 2.75% - 3.75%. Inflation currently at 2.3% is lower than forecasted which is a strong indicator for a strong economy. Our unemployment is at the lowest it has been since the 1970's and lower than that of the two biggest economies in the world at present at 2.3% or around 900,000. Interest rates are remaining unchanged at 4%, which is low, and the reason for the British economy having a firm housing market. The UK's main economic problem is the manufacturing output. It could be argued that this sector of the economy is in recession after figures of negative growth in the last two quarters. As a result of this the UK is suffering from an all time high trade deficit, which is also due to the high value of the pound. But overall the UK economy is in a good state taking into advantage the global economic slowdown which is going on around it. References: www.bbc.co.uk Sources:  · www.bbc.co.uk  · www.bized.ac.uk  · www.europa.eu.int  · www.ukonline.gov.uk  · The Daily Mail Newspaper  · The Business Environment - Brooks/Weatherston