Fiscal Situation Facing the Current UK Government

Fiscal Situation Facing the Current UK Government

Introduction

The main purpose of this paper is to make an analysis on the fiscal situation being faced by the UK government and make appraisal of the government approach to deal with these situations. The main aim of the economic policies is to provide the economic support to the nation. Economic policies are categorised into the micro economic policies and the macroeconomic policies.

Fiscal problem faced in UK

United Kingdom had been facing the fiscal problems since a long history. The main areas of these policies were: accumulated indebtedness, interest rates, government budget deficiencies and inflation (Genest 2009 89). The UK government is facing the financial crisis these days. In their review of British inequality, (Chiu 2005) draw attention to the fact that high inequality levels may be indicative of the failure of fiscal policy in terms of its redistributive function—one of (Byrne 2003 09) classical three. This corresponds to a government's ability to correct for socially adverse distributive results via net transfers adjustment. The authors find fiscal authorities of industrial economies to be more effective at this function than in the developing world. Derived from a national income identity, the concept of twin deficit has been more often tried on developed economies rather than in the context of a developing or transition economy. Much of the twin deficits theory spurred in the developed world, in the United Kingdom in particular, in the early part of the 1980s.

2010: political transitions and catch our breath from the recession to continue through difficult economic recovery

The British economy, the long history during 2010 that for all that he is capable of coping here is recovered after the worst recession since World War II after suffering lasted a year and a half during the credit crunch.

But joy is not complete has dominated new crisis of its kind on the market, that is the sovereign debt crisis in the euro area and fell Greece and Ireland in a dilemma inability to pay its public debt and build up the crisis to become Spain, Portugal and other European countries on Leno falling into the same dilemma and this, in turn, prompted various European economies passage strict austerity Procedures and the United Kingdom led these economies than lose the royal economy enough momentum to continue to grow as the pace of growth slowed in the third quarter.

Control a wave of bitter cold on the European continent and remained under the influence of low air accompanied by annihilating prolific snow even that killed several people and caused complex problems of traffic throughout the Kingdom in full, and disrupted the movement of aircraft and rail and cars and even walk on roads (where the height of the snow reached 50 centimeters in some European countries).

Not only great achievements in 2010 on economic terms, but extended the political has been elected the first government coalition between the Conservatives and Liberal Democrats since the forties, and managed this government ...