UK ECONOMY

UK Macro Economic Environment

UK Macro Economic Environment

Introduction

The main purpose of this paper is to make discussion on the macro economic environment of UK, and discuss its impact on each of different asset classes. The paper makes discussion on the issue that how UK Government uses the various measures that in place to evaluate current economic performance. The paper also discusses the usefulness of these measures in predicting the future performance, and how they may impact on advice issues for both retail and corporate clients.

Macro Economic Environment of UK and its impact on each of different asset classes

The United Kingdom (UK) is the 5th largest economy with a nominal GDP of 2.3 trillion dollars. Like other developed countries in the world, UK is a country-oriented service economy (mostly financial services: insurance, banking, etc.). UK has a close relationship with the Euro zone, as exports and imports between them are about 50% of total UK trade balance. The Bank of England (BoE) is responsible for UK monetary policy. The main objective is to maintain price stability (inflation at a comfortable level). There has been a controversial debate about whether UK should join the Euro zone (countries adopting the EUR and local currency). The current policies have been successful in the new global economy, will not have total control of monetary policy if they join, dissenting arguments: the ECB's power would increase dramatically. The British Pound (GBP) is among the most liquid currencies in the world. Given the high rate of interest, traders and investors are very interested in this currency for operations such as "carry trade" (to earn interest), even when other currencies at higher interest rates. In the third quarter of 2009, the U.K. labour force was 154.4 million people. Of these employees, 81% have a job in the service sector. With 22.4 million people, the government is the main field of employment. Approximately 12% of workers unionized, compared with 30% in Western America. The World Bank ranks the United Kingdom in the third place in the ease of trading and settlement of workers. Between 1973 and 2003, the working year for the average Britain grew by 199 hours. Partly as a result, the country maintains the highest labour productivity in the world. In 2008, also reached the top spot in productivity per hour, ahead of Norway, France, Belgium and Luxembourg, which had over taken the United Kingdom most of the past decade. While, Compared to Europe, corporate and property taxes are higher, while consumer taxes are lower.

Real GDP

The GDP for the year 2010 $ 2,250.2 billion, in 2011 it estimated at $ 2,481.0 billion. The GDP represents all value of all final goods and services produced within a nation in a given year. Vast country, providing many natural resources, the United Kingdom has a GDP per capita among the highest in the world. Their major economic power, due to productivity, a rate of employment and working hours important, and more than 150 million workers, allows them to maintain the most ...