The paper "Economic Overview of the UK" is a great example of a macro and microeconomics case study. The UK is one of the strongest economies in the European market and around the world that is fundamentally supported by the service industry. The Australian department of foreign affairs and trade- DFAT (2010) says that the UK is the 7th largest economy in the world. With a fairly large population that provides labour and a market for goods and services produced within and without, the country is well-positioned economically for foreign enterprises suited to set up base there.
However, this does not capture the whole economic suitability of the country more so given that the recent global economic recession has shaken up the traditional belief that traditionally strong economies such as the US and the UK perform well economically by default (Office of National Statistics 2010). Since 1992, the UK has had a long period of economic prosperity with the 1990’ s decade recording an average of 4% in unemployment. Such a constant level in the unemployment rate is attributed to constant GDP growth i. e.
demand side. Nonetheless, the high GDP growth rate is also associated with high inflation rates especially when aggregate demand increases at a higher rate than aggregate supply which is often termed as unsustainable growth. Sustainable growth, as witnessed in 2000 to around 2005, requires that AD and AS grow at an equal pace to avoid inflation. In this period, the UK GDP growth rate averaged 2.75% while inflation averaged 2%. However, there are other factors on the supply side of labour that have contributed to the constant level in unemployment.
These are frictional unemployment, structural unemployment and real wage unemployment (Office of National Statistics 2010). The supply side has also played its role through other elements such as improved technology and lower raw material prices. Technology has played its role in the production filed where robots and efficient methods of production have reduced the cost in production, time used, processes required and amount of labour. Although technology may be viewed to reduce the amount of labour demanded and somehow force labour wages down (Paliwoda & Ryans 2008), this has not been reported in the UK.
Despite the 2008/2009 global recession, weekly wages for full-time employees grew by 2.0% in April 2009 to stand at £ 489. Median weekly male wages were relatively higher at £ 531 while for females was £ 426 over the same period. Only 10% of full-time employees earned more than £ 971 and a similar percentage earned less than £ 271 weekly. The 40 to 49-year-olds reported the highest earnings averaging £ 551 weekly. Median weekly earnings for full-time employees in London averaged £ 627 which was higher than in other areas which ranged from £ 436 in the North East to £ 514 in the South East.
Fulltime employees in the healthcare sector reported better weekly pay with a median of £ 1,031, followed by managers in corporations at £ 745 with salespersons reporting the lowest at 278 a week (Direcgov 2010). The UK boasts of a superior infrastructure network that allows efficient distribution channels. Most notable is the growth in popularity of e-commerce as facilitated by increased computer usage, increased internet availability and high internet speeds. This implies that firms considering operations in the UK have the opportunity to explore opportunities presented by such high technology growth.
According to the Office of National Statistics, 18.3 million (70%) households in the UK had access to the internet as of 2009 which was an 11% increase over the previous year figures with increased access to broadband (see Appendix A). Sixty-four per cent of all adults who had accessed the internet over the past three months prior to the survey reported that they had made online purchases within the year while 83% of them had made purchases within the previous three months.
On the general terms, internet accessibility and usage for commercial purposes by households is growing (Office of National Statistics 2010).
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