Tuesday, February 19, 2013

Not a Bad Start to 2013 for UK's Economy

There is understandably cause for concern across the land. The last few years have not been excessively kind to our local economy, which is partly understandable. We are so interconnected with the rest of the world, that problems halfway across the globe will still have an impact on us. With major countries such as the United States and the entire Eurozone having had a wide variety of problems in recent years, our ability to trade with them effectively has diminished. Fortunately, the United States is beginning a small but important rebound, but the Eurozone continues to be stuck in neutral.

Actually, it's worse than neutral. According to recently published reports, the overall economies in the Eurozone have contracted for three consecutive quarters. It only takes two consecutive quarters for the trend to be deemed a recession. So, unfortunately, we can now say that the Eurozone is officially in a recession. Not that that is surprising news to anyone who tries to export products made in the UK across the Channel. Several of the major countries, such as Spain and Italy are going through economic convulsions and demand has dropped off significantly. Now, even Germany and France are beginning to go backwards, which does not bode well for anybody.

A Lukewarm Economic Spring

Fortunately England doesn't count only on Europe for its economic survival. There is a robust internal market, as well as a long-standing relationship with the United States and even parts of the Pacific Rim. As a result, despite the problems that Europe is struggling with, the UK can expect a slight, but important economic growth pattern in 2013. Granted, there are many variables at this time which could affect the ultimate outcome substantially. If conditions in Europe worsen, which is not completely out of the question, it could have a negative impact on the UK. If the modest economic recovery that United States is enjoying should stall, that too would have serious consequences for our local economy.

Looking For Viable Markets

Many experts in the UK are also counting on the Pacific Rim region to boost exports from the UK. This is a somewhat dangerous gambit, as China continues to grow at a snail’s pace, and Japan appears to actually be sliding into a recession itself. The UK cannot count on its own economy for growth unfortunately. With the average household spending power limited by an unemployment rate which is close to 8%, a lot of the retail spending that fueled the economy a decade ago just isn't there anymore, at least not for the moment.

Therefore, many experts feel that UK overall can expect a growth of only 1% this year. That does not leave a whole lot of margin for error, as described above. We can only hope that our trading partners are able to get their economic house in order, so that we may continue to prosper.

Chris Harlepp is a US-based lifestyle writer covering some of the latest trends in modern consumer habits and tendencies, such as researching how to sell your house fast. He writes on a freelance basis for many of the major lifestyle blogs.

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