ECONOMICS

Economics

Economics

1) Cutting Government Budget in U.K.

The recent years has highlighted the economic performance shown by the United Kingdom, as well to report one of the highest GDP growth among the G 7 countries, has managed to balance its strategy of expansion of per capita income with stability policies macro economy. In this regard, the United Kingdom was one of the first countries that adopted the scheme objectives inflation and monetary policy, which has remained in constant coordination with the policy fiscal and has resulted in increased efficiency of it. On the other hand, despite the UK government debt remains one of the major risk factors present; the economy has set goals to reduce by fiscal deficit reduction, so that the debt reaches a smaller share of 40% of GDP in the coming years. Finance Minister George Osborne ordered government ministries to prepare a plan to reduce their spending by 25-40 percent by the end of July (Raja, 2010, pp. 32).

The enormous size of the adjustment, which the opposition considered to be more ideological impulses of conservatives, defenders always reduce the weight of the state, which inevitable necessity of ending the deficit at that speed, it will translate into the loss of nearly half a million public sector jobs, an average reduction of 19% in four years in the spending departments, additional cuts of 7,000 million pounds (8,000 million) of social assistance and advance in four years of schedule in delaying the retirement age for men, which will become the 66 years instead of the current 65 from 2020. Today's announcements are aimed at reducing the so-called "structural deficit" state, which has soared as a result of the economic crisis. While Labor went to the May election with a commitment to reduce the deficit in half in four years, conservatives hide behind the crisis in Greece to legitimize its position that it was necessary to reduce the deficit completely to avoid crisis credibility as suffered by Greece, with consequences in Ireland, Portugal and to a lesser extent, Spain (Jingwen, 2011, pp. 15).

2) The Bank of England's Monetary Policy Committee

The Bank of England has set the script to keep rates at 0.5% and its bond-buying program unchanged in the 275,000 million. This decision is a key day for Europe and the euro, which also coincides with the meeting of the ECB. The Monetary Policy Committee Bank of England (BoE) has decided to keep interest rates at 0.5% and the amount of its asset buyback program by issuing stocks, which reaches the 275,000 million pounds (322.426 million Euros). The BoE keeps interest rates stable for the pound sterling at a historical low since March 5, 2009, the date on which the institution has also established a program of asset purchases by issuing stocks, which was extended on 5 November 2009 to 200,000 million pounds (234,511,000 Euros), which is expanded to its current amount last October. Inflation in the UK in October stood at 5%, two tenths below the level reached last month, but ...