Economy of England

The economy of England is the sixth largest economy in the world and the largest economy of the four countries of the United Kingdom. England is a highly industrialisation country. It is an important producer of textiles and chemical products. The service sector of the economy as a whole is now the largest in England, with manufacturing and primary industries in decline.

The British Economy as with other developed economies entered 2009 in recession and on the rim of Depression, after unlimited bailouts, hitting the Quantitative Easing panic button and running a huge 15% of GDP budget deficit, the UK economy has managed to claw its way back out of recession. The Euro crisis has affected England to a large extent. The 'Eurozone' is the name given to the 17 European countries which use the Euro as their official currency, including Ireland, Spain, Germany, Portugal and Greece. The debt crisis basically came about because several Eurozone countries have lost control of their finances since the global recession - borrowing and spending more than they could realistically afford. As a result of this, other European countries have had to bail them out - to the tune of billions of Euros. Greece was the first country to accept a bailout in May 2010, followed by Ireland and Portugal. However, before these loans were approved, the Governments of these countries had to agree to adopt 'austerity measures' to show they were doing what they can to tackle their economic problems themselves. This has led to mass public protests in Greece, with many people demonstrating against more job losses and tax rises as a result.

A major concern is that if Greece is unable to keep repaying what it owes to other countries, the country could effectively go bankrupt - which would have an even more damaging effect on Greece's economy, and restrict its citizens' spending power even more.

This could also have a knock-on effect on other Eurozone countries. It could damage their credit rating, meaning their Governments would have to pay more to borrow money - and might have to introduce their own austerity measures. It all started when Greece had borrowed money from some British banks – which priced billions if Greece does eventually go bankrupt. Moreover, the banks lost and more countries like Italy and Spain were affected.

In this is the case, the UK - and other countries - saw another credit crunch, making it much harder for both individuals and businesses looking for mortgages, loans and other forms of credit.

Plus, most of the UK's exports went to European countries, so the more those countries were struggling, the more likely they were to see exports from British companies’ fall, which became bad news for the economy.

Prajakta Kavde

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