Financial Advice UK - UK economy News - Has The UK Economy Unhooked From The US Economy?

While the Bank of England has faced the dilemma of how much funding assistance to give to the UK markets without allowing backs to benefit directly, this situation is now being replicated in Europe...
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UK economy News - Last Updated Tuesday 3rd June 2008

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Has The UK Economy Unhooked From The US Economy?

Tuesday 3rd June 2008

As the US economy started to show signs of strain towards the end of 2007 there were many economies and stock markets around the world which fell in sympathy – the famous US / UK relationship seemed to be very much intact. However, while the US economy is still falling there are signs that the UK may be ‘unhooking’ from the US and could actually suffer to a greater degree.

The UK and US economies have always been very closely connected, something which has been very good for the UK when the US was performing well but not so helpful on the way down. In the past we have seen the interest rates of the UK and the US often move in tandem in order to try and control the relevant economies. However many people are now asking if that ‘special’ relationship between the US and UK economies is over?

While it would be foolish to suggest that the US economy was at the recovery stage, many analysts believe that the UK could actually underperform the US over the next couple of years. In affect the UK will have suffered a double whammy whereby the initial fall on fears of a US recession has been followed by a further slowing of the UK economy.