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重要的当前经济分析
要评估任何经济方面的成就，就必须对全球经济领域进行一个总体的概述，这样可以在一定保证评估的公平性。要论政府和英国央行(bank of England)在经济运营上成功与否，后续需要对许多经济因素进行细致的研究。事实上,英国经济经历了很多跌宕起伏，而且最近与其他发达国家相比，英国的增长速度处于停滞状态。
作为欧盟的一员,任何国家成员经济衰退的出现都可能会很大程度上拖累英国经济。然而从经济角度上说，相比许多欧洲国家英国还是发展得很不错的。
国内生产总值(gdp)
有一些经济措施如国内生产总值，是用于分析一个国家的经济的。这一措施是一个很能说明问题的宏观经济指标，它是所有经济的寒暑表，因为它是收入、 开支或在给定的经济范围内的生产总量的体现，并且大多数时间都依赖这个指标来评估一个经济的表现。
Material Current Economic Analysis Economics Essay
In order to assess the success of any economy, it is necessary to have a general overview of the global economic sphere to make that assessment fair to a certain extent. To say that the government and the bank of England were successful or not in running the economy; this latter requires a meticulous study of many economic factors. Indeed, UK economy has gone through many ups and downs, and recently its status witnesses stagnation compared to the pace of growth of other developed countries.
As a member of the European Union, any economic downturn witnessed in the state members is likely to drag UK economy deep down. However, it is, economically speaking, doing well, compared to many European countries.
Gross domestic product
There are some economic measures that are used in order to analyze the economy of a country, such as GDP. This measure is a very revealing macroeconomic indicator; for it is the thermometer of any economy since it is the embodiment of the total of income, expenditure or production within a given economy and it is most of the time relied on to assess how well an economy is doing. Therefore, a country recording a high GDP is considered to be a performing and growing economy, bearing in mind that recession is defined as two consecutive quarters of low GDP.
According to the IMF world economic outlook (2010), UK was ranked as the 6th largest economy in the world, its GDP in trillion US Dollars reached 2.3. In 2011, UK GDP increased to 2.4 trillion US dollars; however it stepped back to the 7th rank. While in 2012, the GDP remained the same (2.4) but UK got its 6th rank back. Nonetheless, comparing UK economy performance(2.4 GDP in 2011) within the EU itself shows that it is not a lot behind the leading economies in Europe in the recent years, namely Germany in the first rank with a 3.6 GDP in 2011and France with a 2.8 GDP in the same year.
Trade deficit / UK borrowing
There is no doubt that UK economy is recovering from the world economic crisis but the pace remains very slow in terms of the international level of competition. This slow motion is due to many factors; for instance, UK suffers from trade deficit despite recent attempts that government is trying to reduce it. And since 2011, UK’s monthly trade deficit recorded more than 4 billion per month.
Thus, the government is in a great need to borrow since its spending outnumbers its tax revenue receipt. And in order to finance this deficit, the government via the Debt Management Office sells bonds, gilts and treasury bills.
Recently, UK is fighting with its national debt, and as borrowing mirrors is a great inequality between expenditures and tax revenue, this latter may guide to unmentionable debt levels in the future, and its rise could result in a crisis.
Since 2009, the Bank of England has purchased gilts. During this period, the percentage of gilts held by UK insurance and pension funds has fallen. While on 15th September, 2012 The Bank of England has bought ￡356bn worth of UK gilts.
The graph below from the Bank of England shows that by Q2 2011, this bank held ￡200bn of government gilts, which is a large share of the increase in gilts. These bonds have to be refunded in full, with interest, and interest rates that are low in UK. In other words, the cost of financing national debt is low, which is a plus since the government is likely to spend relatively small percentage of GDP on debt financing.
Source: Bank of England
Furthermore, UK Public sector net debt was ￡1,032.4 billion at the end of July 2012, equivalent to 65.7% of GDP. The level of government borrowing is quite worrying but it is a manageable challenge. So, the following is a graph tracking the net borrowing rates:
With regard to the annual amount that the government has to borrow, this latter was at the peak during the global crisis, but it decreased gradually during the last three years. However, the government has undertaken a positive measure of reducing the budget deficit by the percentage of 25 in the past two years (2009-2010/2011-2012) which is a decrease of 25% in annual borrowing between 2009-10 and 2011-12. The cut in public investment sector remains the most important factor behind deficit reduction.
Government spending 2009-10 +4.6%
Government spending 2010-11 +0.3%
Government spending 2011-12 -1.5%
Though it is the world's sixth richest country, UK owes over ￡1trillion, excluding bank bailouts, according to the Institute of fiscal studies standing at 770 billion euro, with an annual interest payment of 70 billion that is to rise even more. Osborne says that this is “unavoidable”. It seems that the government spends more money than it can tax. Borrowing remains the only way to finance any spending that can't be supported by taxation. Therefore, if the economy health prospects are less than expected, tax revenues decreases and the state has recourse to more debt to cover the deficit.
The Government needs to stop borrowing and spend less. Hence, it is true that debt doesn't have to be a constraint on growth but it doesn’t guarantee growth either.
Since 2010, the government has claimed that reducing debt level is the most pressing economic problem. That is why; government has pursued austerity leading to lower growth.
The following is a graph showing the escalation of the rate of debt over the last three years:
Inflation
UK economy experiences an inflationary Pressure. As there is a fear that elevated levels of national debt can bring about inflation. If debt augments sharply, there won’t be sufficient investors to purchase the government securities, which is habitually the best manner to payback debt. Thus, the government will find itself obliged to overcome the deficit in revenue by printing money, which leads consequently to inflation. When investors are faced with a growing inflation, they lose confidence in holding bonds. Even worse, foreign investors as well tend to sell their securities, causing devaluation in the currency.
The following a graph of the inflation rates over the last two years.
In 2010, the inflation rate was closer to 4%, and it was the highest record since the global economic downturn.It is well above the target of the central bank (2%) and even higher than the maximum normally allowed (3%). And even among the major economies, UK held the highest inflation (December 2010 USA: +1.5%/ euro zone +2.2%). This was a real surprise for analysts who expected 3.4% at max. So much as the Bank of England (BoE) forecasts have always been too low for inflation. In 2011, the situation got worse, recording an inflation rate of 4.4%, a clear sign that the situation is out of control.
The loose monetary policy of the BoE with an interest rate of 0.5% doesn’t seem to absorb this inflation. The bank is thus under pressure and should resolve to tighten monetary policy.
David Kern, chief economist at the British Chambers of Commerce (2012), expected inflation to fall to about 2% by the end of the year, relieving the squeeze on businesses and household consumption. But he warned nevertheless of the continuing upward pressures on inflation because of the recent surge in world food prices.
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Unemployment
But above all, though UK enjoys a large mass of labor force, forth in the world with 28.988 million workers, unemployment is still very high, and is likely to keep rising regardless of the UK’s austerity plan and in the absence of effective measures to reduce it.
UK government has warned in many occasions that the public sector alone will witness a loss of half a million jobs as it continues its cut on public spending.
The unemployment rate in 2011 was 8.1 per cent and increased to 8.4 in 2012.
The following graph shows the rise of unemployment especially during the last three years: |
