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| UKstate.info - UK
Business |
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| Unemployment has started to rise. Unemployment
often lags changes in the economy. Therefore,
unemployment is likely to rise to close to 3 million
by the end of 2009, even if the economy recovers in
the last half of the year. Jobs are being lost in a
range of different sectors, from manufacturing to
retail and finance. However, the hardest hit sectors
are finance, construction, estate agents. |
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4.
Balance of Payments
The UK
continues to run
a large current
account deficit.
(over 3% of GDP)
- despite a fall
in sterling and
economic
slowdown.
However, 2009,
should see a
narrowing in the
current account
deficit as the
effects of a
lower pound and
lower consumer
spending take
hold.
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5. Interest
Rates |
| Interest
rates have
fallen
significantly in
2008. 2009, is
likely to see
even lower
rates, as the
MPC try to avoid
inflation
slipping below
their inflation
target of 1-3%.
Base Interest
rates could fall
to 1.5% in 2009.
[desperate times
call for drastic
measures]
However, it is
not just the
base rate that
is important. It
is also
important to
know whether
commercial banks
actually pass
these lower base
rates onto
consumers. There
has been a
marked
divergence
between the base
rate and libor
rate. |
House
prices
continue
to fall,
well
below
their
2007
peak.
This
graph
shows
the
sharp
reversal
in the
state of
the UK
housing
market.
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6.
Government
Borrowing.
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Government
borrowing
in 2009,
is
forecast
to be a
dire
£120bn
or 8% of
GDP.
This is
a record
level of
government
borrowing
reflecting
- the
recession,
nationalisation
of banks
and
expansionary
fiscal
policy.
It will
increase
UK
National
Debt.
7.
Savings
Ratio.
The UK
Savings
ratio
fell to
1% in
October
2008.
The
savings
ratio
will
rise
during
the
recession,
but, the
Government
is
trying
to
maintain
spending
through
tax cuts
and the
MPC
cutting
interest
rates.
UK
Savings
Ratio.
8.
Consumer
Debt.
Consumer
debt
levels
in the
UK
reached
record
levels
in 2008 |
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Back To Home Business
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