What has happened in Great Britains economy over the last two years Essay

What has happened in Great Britains economy over the last two years - Essay Example The ability of the British Government and Bank of England to manage the British economy can be closely monitored by carefully observing and analyzing the historical trend of UK’s unemployment rate, gross domestic product (GDP), balance of payment, and price stability. Between 2011 and 2012, the unemployment rate in UK remains as high as 8.02% and 8.13% respectively (Statista, 2013a). The fact that the unemployment rate in this country has increased by 0.11% is already a sign that the economy of UK has not really been good after all. (See Appendix I – Historical Trend: Unemployment Rate in UK on page 13) produced within a country in a given period of time† (Mankiw, 2012, p. 494). It means that UK’s yearly GDP can be used to closely monitor the actual economic activities that had taken place in this country (Office for National Statistics, 2013a). Based on the current market prices, GDP in UK has somehow been showing a flat trend between the 1st and 2nd quarter of 2011 and the 3rd quarter of 2011 to the 2nd quarter of 2012. During the 4th quarter of 2012, the GDP of UK has declined by 0.3% as compared to the previous quarter (Bank of England, 2013; Office for National Statistics, 2013b). Basically, the sudden decrease in domestic demand, the presence of the Olympic and Paralympic Games, and the sudden reduction of the North Sea oil output explains why the GDP fell by 0.3% during the last quarter of 2012 (Bank of England, 2013; Office for National Statistics, 2013b). (See Appendix II – Historical Trend: GDP on page 14) Balance of payment provides the â€Å"summary of transactions between domestic and foreign residents for a specific country over a specified period of time† (Madura, 2010, p. 27). It means that the balance of payments would show the summary of import and export of goods and services including the financial transfers between UK and other countries (Sloman, 2004, pp. 516 –