The Great Recession had such a lasting effect on the economy that most countries are still recovering even today. In the UK, business investment fell over 20% during the Great Recession. This is important because investment drives growth in an economy.
Economists from around the world and the International Monetary Fund believe that the global economy faces secular stagnation, when low investment holds back growth in the economy. A forecasting group believe the UK will destroy the trend because in 2015 business investment hit 11 percent of national income, the highest point since 2000. The point of the large spending on investments is to create new technology that boosts efficiency and therefore drives growth in an economy.
The interest rates are also very low in the UK, at only 0.5%. Some experts predicted the bank of England's base rate will remain at this point until the middle of 2016. This rate is a record low and some experts believe the rate increases will be very gradual, with expectations of 2% in 2020.
http://www.dailymail.co.uk/news/article-3251414/UK-economy-grow-world-slows-Report-forecasting-group-predicts-Britain-buck-trend.html
2 comments:
Obviously the Pope is a very influential figure in the world and brings excitement to wherever he is on any given day. Because of this, he brings a positive economic impact to the cities he visits so it's not surprising to see the large revenues brought to Philadelphia, New York, and Washington DC. I do believe his message of not partaking in the "idolatry of money" in the American society was ineffective because the United States is a market-driven society and we assume that most people are rational thinkers which is the complete opposite line of thinking as the Pope.
The U.K. seems to be experiencing similar difficulties to the U.S. in terms of interest rates. For saving to be encouraged in the future this will have to appreciate. Since saving and investment drive future growth and future efficiency it is important that the U.K. encourage these. Investment as 11% of national income is a great start and a foot in the right direction. On the plus side, low interest rates will most likely continue to drive investment.
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