The Economies State

The economies state

The UK economy is currently in recession however is on its way out. It is said to take up to 6 years for Britain to be out of it, however this may take longer if European leaders fail to address the single currency crisis.

The big question is whether the economy can take the Government's austerity cuts and tax rises: VAT was raised from 17.5% to 20% in January 2011, plus there were changes made to National Insurance and income tax in April which helped low earners but penalised middle-income and high-income workers.

Current rate of inflation

The rate of Consumer Prices Index (CPI) inflation in the UK matched its record high in September, rising to 5.2% from 4.5% the month before.

The 5.2% rate is the highest CPI measure since September 2008, and it has never been higher since the CPI measure was introduced in 1997.

The Retail Prices Index (RPI) - which includes mortgage interest payments - rose to 5.6% from 5.2%.The latest RPI measure is the highest annual rate since June 1991.

Over the last year you can see that that CPI (Consumer Price Index) has gone from 4.0 (January 2011) to 5.2 (September 2011) this is showing an increase, however through the year, CPI has varied from

4.0 t 4.5, only in September did it rise dramatically to 5.5.

RPI (Retail Price Index) started at 5.1 at the beginning of the year (January 2011) fluctuating from 5.0 to 5.5 over the months, to reach 5.6 nearer the end of the year (September 2011). Therefore this shows that inflation is increasing.

Imported/exported of goods/services

The UK are the second largest exporter and the third largest importer of commercial services, also being the eighth largest exporter and fifth largest import of merchandise, making them on of the leading nations in the world. (2005)

Leading destinations include

* the USA (15 per cent of all exports),

* Germany (11.6 per cent) and

* France (9.8 per cent).

Exports to the European Union as a whole accounted for around 58 per cent of all UK exports (2005).

Exports of goods/services equal $468.8 billion (2006) including products such as; manufactured goods, fuels, chemicals; food, beverages, tobacco, the chemical industry being Britain's largest export earner.

Export Partners (2006):

US 13.9%,

Germany 10.9%,

France 10.4%,

Ireland