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Evaluate the current status of the UK economy

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Evaluate the current performance of the UK economy Unemployment: The definition of this is: Number or percentage of a set group with out paid employment, but are able, available and willing to work. In recent months unemployment has been on the rise in the UK. However over the past 10 or more years unemployment has fallen and the UK has a lower rate of unemployment than most of Europe and a similar one to the USA. This is surprising considering the large decrease in the production sector of the UK economy. Manufacturing has lost jobs every year for the last 7 years. The Graph opposite shows the number of people in millions unemployed over the last 10 years. As manufacturing and production has decreased other sectors have increased, such as service providers and restaurants and hotels. Inflation: The rise in general prices and the reduction in value of money. ...read more.


The output of the production industries fell by 0.2 per cent in the latest quarter, following growth of 0.8 per cent in the previous quarter. While output of manufacturing industries grew by 0.6 per cent, this was more than offset by a 4.0 per cent decline in mining and quarrying and a 3.0 per cent fall in the output of utilities. This shows that although some areas of our economy have been in decline other areas have been growing and therefore compensating, adding into this the growth of the service sector by 1% in the second quarter, it means that the economy is still growing. Trade and Exchange Rate: The exchange rate is the price of one currency in terms of another currency. For example, the exchange rate between the � and the $ may be �1=$1.65. This means that you need to pay a price of �1 to get every $1.65. ...read more.


The rate of interest can be thought of as the price of money. It is the extra proportion that has to be paid when borrowing money or the extra that a saver receives when putting their money aside for the future (unless they keep it under the mattress). The level of the rate of interest is determined by the Monetary Policy Committee of the Bank of England that meets each month. They decided the Bank of England Base rate; this is the rate of interest on which financial institutions base their lending rates. It is used to set all their other interest rates. Their loan rates will be a certain percentage above the base rate, and their savings rates below. When they change their base rate, this will then automatically change all their other rates. The current Base rate is 4.75%. This has been gradually increasing this year but has remained the same since august when it rose by 0.25%. Real interest is the expression given to the interest charged by lenders after taking inflation into account, the actual interest received. By Matt Elliman ...read more.

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