The Economy of England

Is the largest economy of the four countries of the United Kingdom, and the seventh largest in the world if the countries of the United Kingdom were compared with other countries. England is a highly industrialized country. It is an important producer of textiles and chemical products. Although automobiles, locomotives, and aircraft are among England's other important industrial products, a significant proportion of the country's income comes from the City. Since the 1990s, the financial services sector has played an increasingly significant role in the English economy and the City of London is one of the world's largest financial centers. Banks, insurance companies, commodity and futures exchanges are heavily concentrated in the City. The service sector of the economy as a whole is now the largest in England, with manufacturing and primary industries in decline. The only major secondary industry that is growing is the construction industry, fuelled by economic growth provided mainly by the growing services, administrative and financial sector. The British pound sterling is the official currency of England and the central bank of the United Kingdom, the Bank of England, is located in London.

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The Economic Situation of England

Since August last year, the economic situation of England has changed considerably and this is true not only in case of England, but the same principle is also applicable to other major economies of the world. There has been a dramatic change in the economic landscape of England over the period and the economy is not very favorable at present.

Recession in England:
With the recession occurring in England, the effects are going to be felt in peoples lives and their lifestyles and spending habits. The economy of England has shrunk by a greater level than what was forecasted and it is because of this reason that it might probably take it longer for the economy to recover and come to a normal state. The economies of the world have been working to try and avoid going into a recession, but it is a fact now evidently clear that the economy, indeed, has gone into a recession. The rates on loans are increasing and so is unemployment, which is affecting the spending power of people and people are facing larger debt burdens than they were doing before. The bank of England has been taking desperate measures to fend off recession, but have not succeeded in this. The pound is at its lowest; the property market is stagnant. Consumer spending has gone down and so has bank borrowing. The recession is going to last through 2011 and no one can predict when will there be an upturn in the economy. Orders from abroad for UK goods have declined and everyone has been hit by the recession.

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The current situation of England

GDP USD QOQ YOY 2246 BILLION 0.10% 0.70%

Interest rate

0.50%

Inflation rate

5.20%

Jobless rate

8.10%

Government budget

-10.40

Debt to GDP

80.00

Current account

-2.50

Exchange rate

1.60

Population

62.25

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GDP
The strength of the English economy varies from region to region. GDP and GDP per capita are highest in London. The following table shows the GDP (2009) per capita of England as a whole and each of the nine regions. Rank GDP per capita in Euros England 26 904 London 44 401 South East 31 300 East of England 27 778 South West 27 348 East Midlands 26 683 West Midlands 25 931 North West 25 396 Yorkshire and the Humber 25 300 North East 22 886 Place

1. 2. 3. 4. 5. 6. 7. 8. 9.

Two of the 10 economically strongest areas in the European Union are in England. 1. Inner London is number 1 with a 71 338 GDP per capita (303% above EU average); 2. Berkshire, Buckinghamshire & Oxford shire is number 7 with a 40 937 GDP per capita (174% above EU average).

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ECONOMIC PERFORMANCE
This is how the economy has performed since 2007 (figures in US dollar trillion):

Although the recession brought down the economy significantly and England was one of the worst hit nations in the world, the Brown administration, through nationalizing, tax cuts and other financial instruments, was able to contain the losses. The services sector helped as well, with its rich contribution to the GDP of 75%, followed by the industry sector and agriculture. The following graph shows the performance of each sector in comparison to the others (in percentage):

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FORECASTS

The Bank of England said on Wednesday that it had downgraded its forecast GDP (gross domestic product) in 2011 to 1.4% down from its estimate of around 1.8% in May, 2012 from 2.5% to nearer 2%. The Bank said there was a good chance that inflation would reach 5% later this year. However, in its quarterly Inflation Report the Bank said inflation may undershoot the 2% official target in coming years and the UK has flexibility to adjust policies if growth is weaker than expected. Governor Meryvn King said headwinds buffeting the UK economy are intensifying by the day and officials can expand stimulus if the outlook for growth deteriorates further.

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References:
www.google.com www.wikipedia.com www.scribed.com www.yahoo.com www.worldeconomies.com www.Tradingeconmics.com www.economicsbulletin.com
www.bbc.co.uk/news/business/

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