Political, Legal and Economic Framework

Political, Legal and Economic Framework

Political, Legal and Economic Framework

Introduction

Introduction

The population of the United Kingdom has drastically increased in 2011. The overall population density of the United Kingdom is one of the highest in the world. The firms are in direct relation with the environmental factors of the country. Thus, the critical evaluation of the macro economic factors is necessary. This makes it easy for firms to design an effective strategy or work according to the policy. United Kingdom has undergone many significant political and the economic changes after the elections of April, 2010 (Aldashev, 2009, Pp. 5-16). Description

Current Economic Condition

The United Kingdom economy faced the recession in the first three months of the 2012 by 0.2%. This surprise fall in the economy was because of the contraction of two consecutive quarters. In 2011, the situation was even worse, and the economy shrank by 0.3%. However, the economy situation is better than that of 2010. In the 2010, the economy collapsed and faced an exceedingly recession (www.state.gov, 2012, Pp. 2-20).

Figure 1: Showing the comparative GDP growth. Retrieved from: http://www.bbc.co.United Kingdom/news/business-17836624, Retrieved on 19th Dec, 2012.

The reason to the recession which the United Kingdom is going through is because of the under production of the industries. The rate which was observed of the decline in the production was 0.4%. Construction and the development also play a crucial role in the economy development (Aldashev, 2009, Pp. 5-16). The United Kingdom region faced challenges in every field. The construction decreased by 3%. In addition, the support was gain by the service sector when their output increased by 0.1% (www.state.gov, 2012, Pp. 2-20).

Hence, these figures directly related to the current economy situations because they are even worse than the government expectations. In addition, the inadequate allocation of funds by the government forced the situations on the more down the track. Furthermore, the United Kingdom economy is bumping along the bottom of the economy, and it will need a year more to gain the momentum back. The GDP is marked along the negative curve, for which the most responsible is the construction sector. However, the downward moment of the production sector cannot be ignored (www.state.gov, 2012, Pp. 2-20). The average earnings in the United Kingdom have fallen dramatically in the recent years because of the effect of inflation. Although, the rate was comparatively higher than the last year by 1.5%.

The GDP turned negative in the end of the 2010; however, the growth was recovered by the 2011 by 0.7% and it declined again by the 2012.

Figure 2: Showing different GDP rates in the economy of the United Kingdom. Retrieved from: http://www.parliament.United Kingdom/briefing-papers/RP12-75, Retrieved on 19th Dec, 2012.

The inflation has covered the United Kingdom, and it can be witnessed in every sector. The consumer prices, construction crunch, lower production, less development, downward fall of the wages, financial risks and loans, every factor accumulated in the United Kingdom fall of the economy ...