The Economic Recovery Of The Uk Economy

Better Essays

Anderton A (2008) defines economic recovery as when the rate of growth of GDP begins to pick up as consumers and firms regain confidence and start to spend more again which also results in a decline in the unemployment rate. It is the period which takes place following a recession in the economy. The economic recovery occurs after a recession and there was a recession in 2007 as shown in the graph below. A balanced economic recovery means that the economy hasn’t recovered primarily because of one aspect for example in the case study it is revealed the UK economy is very much dependent on household consumption and government spending, so in order for the recovery to become more balanced, exports and investments must also increase. In …show more content…

An example of this would be Burberry who are a well-known fashion brand who revealed that if it adjusted its 2014 profit according to the current exchange rate, it would be £55m lower. It is also revealed that if the pound continues to rise then it will become “material “for Burberry which means it would have a significant impact. In terms of the current account, it could also affect it as exports are more expensive, so we get a fall in exports. Imports are cheaper and so we see an increase in imports. This will cause a bigger deficit on the current account as spending on imports is greater than income from exports and having a huge deficit means the economy is weak . Riley G(2012) states that although in the short term it would improve living standards, in the long term it means that they must ‘ must rely on foreign direct investment or borrow money to make up the difference’ Outline at least six possible benefits to the UK economy of the strong British pound Firstly, one of the main benefits of the strong British pound is to the British holidaymakers as it enables for a stronger purchasing power. From the case study: ‘Strong currency makes travel overseas much more affordable and cheaper and leads to a rise in demand for overseas vacations’. According

Get Access