UK’s Economy has remains one of the fastest growing economy’s of the world in recent years, but there are now concerns that the economic recovery is losing momentum.
The British economy showed a slight decrement in the first quarter of 2016 and GDP has expanded 0.4 % on a sequential basis. Similar to the previous year’s services continued to hinder the growth however other sectors of the economy has shown much increment but most of the time it shows a slowdown and that slowdown was due to contractions in industrial and similar other sectors.
Moreover, there are other concerns that the UK’s economy is being mostly affected by uncertainty around the European Union referendum. Latest economical data shows that the economy of United Kingdom will remain affected to a considerable loss of confidence, in case the country leaves the European Union, but the expectation are that UK’s voters will support the United Kingdom’s continued membership of EU. Whatever the outcomes will be UK’s politics will enter into a period of instability.
In latest Economic activity further details shows that growth in both Scottish and UK’s economy is further set to slow down hence negatively impacting the Scottish compared to the rest of the United Kingdom. GDP’s Rose by 0.1 % increment in Scottish land while the UK’s GDP rise up by 0.4%. Also the pattern of the growth of economies for UK and Scotland also differed in third quarter but the differentiation was quite less than in some earlier quarters.
United Kingdom’s rapidly falling unemployment rate has been one of the key factors for making success stories of the past year, but the pace of improvement has slowed in recent years notably. But for UK’s economy, inflation has been noted very low, largely because of the sudden increase in the prices of depots of Oil’s and the strength of sterling Pound keeping down the cost of imports becoming a boon for finances.
Consumers’ spending has been one of the main driven force for the UK’s economical recovery, but still concerns remains about the spending ; if UK’s people are using up their savings and taking loans even for the shorter need then this could cause future problems for them and will suddenly become the threat for the economy.
For any developed country service sector is the real power producing agent of the economy for UK this accounting for more than 70 % of the GDP. In that thing the service sector of the UK is showing some positivity in comparison to the other sectors of the economy, so suppressing the recession period. Despite many schemes and the political pressure to the banks of UK to improve their access to finances for business activity the lending figures shows very little sign of improvement.
Construction accounts for only about 5- 6 % of the economy for UK, but it was very hardly hit by the recession, contracted by 15 % from peak and is still hindrance the growth of United Kingdom. In last quarter after a sudden period of growth driven by housing industry the construction sector has begun falling again.
Despite of these negative statements some positive outcome is also there which spreading happiness among the individuals is. Domestic demand is still growing because of low price of Oil; domestic inflation is nearly close to Zero so boosting the real income of economy, interest rates remains low and household demands is increasing day by day which is pushing the economy to positive side. An external demand to services and goods is being boosted by continued efforts made by the UK’s economy.
However the need is to put some eyes on the trading sector because the net trade is still shoeing the negativity, although it is not as high as in case of China and USA.