@2010IntroductionThe great recession is said to have started in the United States of America during the year 2007. This was according to the National Bureau of Economic Research. This later on spread to most of the developed nations of the world resulting into a major slowdown in economic activities. The recession crisis has been going on within the economic environment distinguished by a number of inequalities which were ignited by the occurrence of the crisis since the year 2007-2010. In July 2009, it was proclaimed by a rising number of economists that the financial crisis might have come to an end.
Nonetheless, in the United States, the requisite two successive quarters of growth in the Gross Development Product did not in fact take place until the end of 2009.This crisis that started in the US has proved to be one of the major economic downturn since the World War II (Drews, 2010). The UK economy has undergone a period of recession from the year 2007.The Gross Development Product has gone through two successive quarters of negative growth. In the year 2008, however, the economy grew by a reasonable 0.7% in the overall Gross Development Product, with the economy undergoing a period of recession within the next half of the year.
The recession stayed on covering much of the year 2009, with current government figures representing a record of approximately 4.8% decline of the Gross Development profit over the year (Beenstock, 2009). The economy however moved out of recession, with the Growth Development Profit going up by 0.3%. This was after it had shrinked for the last six years in a row.
Total output production went up by about 0.4% in the last quarter of the year 2009 as compared to the fall of 1% in the past quarter. Among most of the developed nations, year 2009 provided the hardest hit on the UK economy with the GDP going down by about 1.9% within the fourth quarter of the previous year. This is in comparison with the previous year and assumed as the worst ever performance since the year 1991.Consumer spending went down sharply with the manufacturing as well as the production output also demonstrating a decline of about 4.5%.
The household spending had also experienced a decline of 0.7% within the fourth quarter due to the wage rate which had not shown any indications of getting better since 2008 (Beenstock, 2009). The manufacturing output later on went up by 0.2% during the month of January of the year 2010 in comparison with the same month of January of the previous year. This did not include the energy production. The output from the service sector however went down by 1.4% during the month of December 2009 as compared to the same month of the previous year.
The present situation financial crisis facing the UK economy has been as a result of negligent as well as reckless lending of real estate mortgages In North America. The lending practices are conducted by the financial institutions as well as being encouraged by the UK government. These were being given to people who had small incomes as well as poor credit histories and whose probabilities of repaying the credits were uncertain. Some of these people would fail to pay their first payment forcing their assets to be taken over by the lenders.