An article looking at whether the slow growth, rising inflation and mounting debt in European countries may be affecting the UK economy and its climb out of recession.
The current UK government blames rising unemployment and the slow economic growth in the UK on the current Eurozone problems. Here we investigate that claim.
Growth forecasts for the UK economy have been consistently downgraded over the last two years. Having missed a triple dip recession and with current growth figures at around 1%, there is no good news coming soon for consumers in the way of new jobs and heavier pockets. The cost of the bailouts for Greece, Ireland and Cyprus have made everyone in the Eurozone very wary. UK analysts are watching what happens next with concern.
The UK government currently says the Eurozone is largely to blame for the rise in unemployment in its market because of the drop in exports to the region. UK exports may have indeed dropped to the EU, but it is still the UK’s biggest export market taking 50% of our exports, ahead of the USA and Japan.
Sluggish growth in the UK does predate the Eurozone crisis. Fewer exports to the EU started occurring pre crisis and while there has been a downturn this figure has not continued to go down year on year. Even after the drop the EU region still accounts for taking half of our exports. However the amount the UK is exporting globally has reduced and with the closures of many factory plants around the UK lots of jobs have been lost.
The issues in the Eurozone may well be affecting British confidence the most. The UK may not be part of the Eurozone but with so many exports going to this area then the investment in Euros is severely impacted.
Consumer spending continues to fall which shows that normal individuals like you and me are feeling the pinch of rising inflation and daily living costs. The rise in unemployment means more people are looking for work and are having to rely on state handouts to get by. Debts that were taken on while consumers were employed are struggling to be paid back. Low interest rates are helping but if your credit card payments or overdraft payments are only having the bare minimum paid off each month then the capital debt still remains. And it may continue to remain for quite some time if your own personal circumstances are unable to be changed. Don’t be afraid to look for professional debt management advice from the like of Consolidated Credit.
Slow growth and rising unemployment may well predate the Eurozone crisis but the crisis certainly isn’t helping the UK’s efforts to climb away from another recession.
Despite record breaking low interest rates, consumers continue to be hit by the rising cost of living and have less in their pockets to spend on the high street. This in turn means businesses aren’t making profits, so their prices are being put up, or they are being forced out of business. Either way there is a long climb ahead for the UK economy.
About the Author
Rosette is a freelance writer who writes regularly on consumer debt problems. Her advice is dont be afraid to look for professional debt management advice from the like of Consolidated Credit.