UK ECONOMY

Rebalancing the UK economy

Rebalancing the UK economy

2. What factors might account for the fall in the UK saving ratio between 1993 and 2008?

In the post war era, the saving ratio of UK was on the upward trend. Although the saving ratio had created low graph and making the decline trend line. The ratio was cut down up to 2% low all the time (Church, et al, 2000, pp.106-122).

Main reason for fall

During the period of 1992 to 2008, the UK saving ratio was reducing time to time because the country has utilized all his economy on all the governmental sectors and the other lavish facilities. There were certain factors due to which the saving ratio of UK always targeted and saved little amount from the fiscal policies. The certain features are as follows;

Accessibility of acclaim from 1993 to 2007 always confident to people to cash their loans to any financial and banking sectors. The sectors had provided loans to the peoples from their personal belonging to increase their goodwill of the organization. This creates an enormous downfall in the economy and as a loss in saving ratio.

Increasing in the house charges in the year 1993 to 2008 had provided confident to the landowner. The expanded prices were affluent for the home owners due to their optimistic prosperity effect. The home owners demanded more money in advance for their properties. This left a bad trade mark for the economy, and reduces the graph of saving in the UK economy.

Cultural and communal gatherings cheering an approach of scrounging and expenses. The UK people had an aspiring feeling for celebrating the cultural and social festivities on a topnotch priority. This highly affected the economy because people and the government were diverted for celebrating these events. This reduced the saving cost in UK economy.

Small interest rates were also highly affected the UK saving ratio. In the period of 1991-1992, the interest rates were 12% and maintained his position up to many years. But this rate was decreased by 3% in 2000 which negatively impact the UK saving ratio. This pessimistic actual interest rate disheartens saving.

These are all the factors that affected the fall of UK saving in the year 1993 to 2008.

3. Why is a business investment so weak at present? What policies could the government use increase business investment?

UK has lost his power in many investments sectors of the world. This country is tripping down the positions of the most advantageous assets setting according to the present research report of a worldwide investigation of commerce from specialized services organizations. The mediocre UK organizations are gradually enhanced and being pressurized to UK to seem overseas for assets openings to cover up the weak economic prospects nationally. The saving ratio of UK was too low in the previous which left a negative impact on the country's economy. In 2011, the UK was on 5th position globally in the biggest assets place, but now due to ...