Is the UK economy out of recession Essay Example | Topics and Well Written Essays - 2000 words - 3

Is the UK economy out of recession - Essay instanceThe wealth of the households residing in UK had increased drastically mainly because of the housing bubble and an increase in source market. Aggregate demand nurtured the level of employment with its major portion stemming from the public domain. However, the recent financial ruckus undermined the economy and it was forced to sink into a serious recession.The percentage increase in GDP of UK had been unchangeable over the past decade. According to the data it has been observed that a recessionary phase has been experienced well-nigh after 18 years in the end time it was observed in 90s which is unpatterned from Figure 1. As we know that, recessions are marked by a percentage decrease in GDP generally over two to three quarters thus we can draw a valid inference from the figure that UK plunged into the recession in year 2008.The crisis traces its root in the financial sector which is the flagship of the UKs economy. Since the f inancial sector is closely interlinked to all the other sectors, it exerted a detrimental effect on the other parts of the economy. As we know that financial sector mainly assist individuals and businesses in acceptance and lending of funds therefore this crisis had its impact on the ability of households and businesses to finance their needs. Public finances were fringe hard by this upheaval which limited the ability of UKs government to use fiscal polity to monitor the situation.The current economic scenario is pointing an auspicious beginning for UK as the financial turbulence which swept across the world has subsided to a quite large extent. After six consecutive quarters of recession from April 2008 to family line 2009, UK has finally unfettered from the recession since it has experienced a 0.1% growth in its GDP in the last quarter of the year (Figure 2) (Cook & Hayman, 2010). Technically, it is clear that UK has recovered from a recession. However, this financial turmoil has left a groovy deal of damage in its wake. Banks have become