Does the government of the day really control the direction of the UK economy?
As we enter what is becoming a serious downtrend in the UK economy many people are starting to ask whether the government of the day really do have control over the direction of the UK as a whole. While undoubtedly there have been mistakes made by the government, the onset of the credit crunch and collapse of the property market has not helped what was already a difficult situation. But could the government have really made a difference?
The simple answer is yes. The UK economy over the last decade has been built on debt and property investment with everything else a side-effect of these two issues. As people made more from their property investments and were able to access greater debt this encouraged consumer spending which led to increased economic activity, higher employment and a general feelgood factor.
The problem with building an economy on such a foundation is the fact that once the debt issue is taken away and finance is no longer easily obtainable the rest literally falls like a pack of cards. The credit crunch has magnified the impact but in reality the situation has been evolving for some time.
Share this..
Related stories
Debt counsellors ready for surge in new year
The debt counselling sector is set for a surge in demand in the New Year with as many people return to reality after the demands of the festive period. This year more than any other year will see more and more of the UK population heading towards serious financial distress with debts rising and income levels under pressure. We should begin to see a constant growth in IVAs and bankruptcies over the...
Read MoreUK consumers can't do without their holidays
Despite the fact that the UK economy is still struggling and many consumers have found it difficult to fund their Christmas spending, it appears that holidays are top of the list when it comes to the spending habits of UK consumers. A survey by Thomas Cook, the holiday giant, confirmed that an annual holiday is top of the list of the vast majority of the UK population. So how will the holiday sect...
Read MoreConcerns about deflation prove premature
Today's announcement that the retail price index was unmoved in February caught many analysts by surprise. A significant number had expected inflation to fall into negative territory with estimates of between 0.5% and 0.8% deflation. When you also consider that the consumer price index rose to 3.2% during February, many people are now starting to believe that the threat of deflation may be recedin...
Read MoreEDF is latest Energy Company to hike Prices
EDF Energy has become the latest in a long line of providers to hike their energy prices, after moves by British Gas, SSE, Scottish Power and npower to do the same in the past month. There seems to be little doubt that energy companies have used one another as an excuse to up prices, and have found safety in numbers, leaving consumers with nowhere to turn. EDF say that there are around 1 mi...
Read MoreRBS told to reduce bonus pot by £500 million
Royal Bank of Scotland directors have been told they need to reduce the estimated £1.5 billion bonus pot for 2009 by £500 million. This would appear to be the behind-the-scenes deal which the Treasury has agreed with Royal Bank of Scotland directors as a way for both parties to keep face and to maintain the Royal Bank of Scotland board of directors as it is. So what next? The very fact that b...
Read More