Free Essay Describing The United Kingdom Economy

In 2017, the UK economy sluggishly grew by a margin of 0.3% from the previous 0.2% in the first three months in the initial quarter. According to the National Statistics, the improved performance in the UK economy was due to the underpinned service sector that dominated the market representing more than three-quarters of the output. In precision, the service sector that dominated was attributed to the retail and film industries. Restaurants, hotels and distribution services grew by 11%, adding 0.15 % points on the overall GDP of the UK. The motion picture was the second most significant contributor to the service sector with increased growth of 8.2% and boosting the UK GDP by 0.07%. However, the UK economy stagnated due to the 0.9% slides in the construction and 0.5 in the manufacturing sector ("GDP grows 0.3% as sluggish start to 2017 continues", 2018).

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According to Sir Vince Cable, a liberal democrat leader, the cause of the macroeconomic shrinks in the country's growth was due to the exit from Brexit. This is article is true because of the vivid economic recession, stagnation, and shocks experienced since the exit from Brexit by the UK ("GDP grows 0.3% as sluggish start to 2017 continues", 2018).Other publications and research backs the macroeconomic decision (exit from the EU) led to the reduction and sluggish growth in the UK economy. Studies have analyzed the overall macro and microeconomic impacts of the UK's exit from the European Union. Some of the areas affected by this Brexit exit are the public finances and employment in the UK despite the debate and intervention of the OECD and IMF organization. Since UK is a first world economy that has the international significance of other nations, the effect of the European exit by the UK had several international macroeconomic implications ("GDP grows 0.3% as sluggish start to 2017 continues", 2018).

There have been attempts to modify the long-term effects of the Brexit exit by the UK, many of which have affected the GDP compared to the status quo if they would have been in the EU and its market. It is essential to note that the sluggish economic growth in the UK is a great attempt. This was because of the threats and chances of economic breakdown when they chose to exit from the UK. As a result, the figure displayed concerning the sluggish economic growth is truly correct and are projected to go for a long-term since the economic forces will take a long time to adjust to the new condition (absence of the EU market). The UK's GDP will continue to decrease than it would instead be, not immediately drop in the prosperity; for example, if the United Kingdom maintained its rate of growth until 2030, there would be a 30% economic growth, and this loss is envisaged in the GDP projection. Therefore, a loss of 6% in GDP would imply a 24% growth rather than 30% but would still mean that the economy of UK will continue to fall and become small indefinitely. This would be an arithmetic approximation of the impact of Brexit on the economics of UK against its economy in 2030 if it stayed in the EU ("Brexit triggers uncertainty over future of research in UK", 2016).

Another cause for this sluggish growth is the restriction of UK in entering the EU market that was its primary market for her products. Due to the exit, the UK faces stiff regulation since it is not a member of Brexit and cannot make trade relationship with her neighboring countries. As a result, the only products seen to continue to increase the UK's GDP is the service sector compared to the production and construction sector. According to the treasury, some of the short-term effects of the Brexit are the uncertainties surrounding the decision of exiting and its impact on investment. Investments are an income generator to the government since it provides employment, an increase of liquidity and money circulation in the economy ("GDP grows 0.3% as sluggish start to 2017 continues", 2018).

The absence of Investment will lead to shrinking of economic activities like trade reduction in job opportunities in the UK. This will affect the household incentives save per capita that will make the economy to have an economic shock. These shocks translate to the 0.3% economic growth that would not be the case if the nation stayed a member of the EU.

According to the IMF, UK citizens have started to feel the pinch of Brexit since the country's economy has register less than 2% increase in the GDP that is sluggish to economic growth. The exit makes Britain industrial sector among the weak industrialized nations since the workforce from EU will not be able to work since they exited Britain besides the strict regulation of exit and entry into the EU. There is weak productivity in the UK since the real wages were squeezed before the consideration of the post-vote period. Therefore, there are little prospects that the chancellor can impose significant reforms on the UK economy due to the referendum and election in June. As a result, the GDP of the UK economy will continue to grow slowly with an approximation of less than 2% annually compared to the growth recorded initially before the decision to exit the European Union ("GDP grows 0.3% as sluggish start to 2017 continues", 2018).

Reference

Brexit triggers uncertainty over future of research in UK. (2016). Prescriber, 27(7), 14-15. http://dx.doi.org/10.1002/psb.1477

GDP grows 0.3% as sluggish start to 2017 continues. (2018). Sky News. Retrieved 13 April 2018, from https://news.sky.com/story/slight-improvement-as-uk-economy-grows-03-10962239