The economy of the United Kingdom in the 1970s was on a slow growth rate with increased unemployment and high inflation rates. This is similar to the early 2000s but recently the United Kingdom has experienced better economic growth increased trade and relatively low unemployment levels as compared to other European nations.
During the 1970s the economy was considered to be faced with structural and functional problems with an inflation of about 27% (1). There was also rise in the power of trade unions which resulted in wage inflation and strikes among workers. Despite this the unemployment rose to a record 700,000 in the end of 1970s (2). During this period there were also increased government debt. In the 1970s the UK economy grew at a slower rate than that of the neighbouring European competitors.
Britain's share of world trade at the same time halved between the period between 1990 and early 1970s. Inflation in this period was given exacerbated by hike in oil prices in1973. The UK microeconomic performance also declined in relation to other economies and previous periods.
During these two periods i.e. between 1970s and 2000 there are two steps used to evaluate the economy this definitely cannot be purely objective (3). The following performance indicators have been used for evaluating the economy in these two periods. Economic growth; This is best expressed by looking at the Gross national product which compares the population size to the value of both goods and services produced and consumed.
Economic stability: This refers to the extent of fluctuations and variations in employment levels economies, currency, prices and inflation. International balance of trade: This looks at the performance of the economy internationally by its trade balance exchange rates. Balance of payment and trade.
In the year 2009 the United Kingdom was ranked as the sixth biggest economy in the world with a GDP of US$2,646 (4). The UK also received the highest number of FDI in Europe In the same year 2008. The economy also grew at a faster rate than that of the neighbouring economies. In the year 2008 the level of employment in the UK was also lower than that of the European Union. The economic growth at the European Union was at 0.6% in 2008.
The United Kingdom has greatly progressed in the 2000s as compared to the 1970s when there was economic experimentation in terms of policies and ideologies. The united kingdom has shown increased and better improvement as compared to the European union this is because of solid programmes and favourable policies. The rate of inflation has been high during both periods. However during the same period global inflation rates were also high.
(1) Holden, K. Matthews, K. & Thompson, J. The UK economy today. Manchester: Manchester university press.1995
(2) Bowler, AL Wages in the united kingdom in the 19th century: Notes for the use of students of social and economic questions Michigan: Michigan University press.2005
(3) Morris, D. Economic system in the UK.3rd edition. London, Oxford university press 1985.
(4) Morris, D. Economic system in the UK.3rd edition. London, Oxford university press 1985.