UK escaping woes of Euro-zone

While the many stories have carried the ongoing Greece debt crisis, the United Kingdom seems to remain aloof to issues of the other Euro-zone nations. UK GDP grew .6% during Quarter 4, an increase of previous estimates by .1 percent. Overall the UK grew an estimated 2.8% in 2014. This level of growth has almost surpassed 2008 levels. Furthermore UK exports grew around 4.6% and Household income expanded .6%. These impressive gains come in response to decreases in fuel and consumer prices as well as higher wages.

It is interesting to see such growth while the rest of Euro-zone struggles to make any significant increases in growth. As this graph shows the UK has continued to overshadow anemic growth in the Euro-zone.

UKGDPEUROPE

As seen in the the UK has continued to grow past Euro-zone levels. Though the Euro-zone seems to be closing the gap. Whether that trend will continue is yet to be seen

Source:

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q4-2014/index.html

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5 thoughts on “UK escaping woes of Euro-zone

  1. ericafleming

    As you mentioned in your post, it is very interesting to watch the trends of the UK while considering the poor performance of Greece and others in the Euro-zone. I wonder if UK’s strength is due to an exceptionally strong factor of its GDP, or if they are just outperforming based on country demographics. As well, the currency of the UK has remained very strong — even in relation to the strengthening American dollar. I wonder how long this performance will last.

    Reply
  2. nrgood17 Post author

    I think the UK’s economic strength is a product of its insistence on being part of the Euro-zone yet not completely buying into all their policies. In that regard they may have escaped/not been hit as hard by the problems of other Euro-zone members. It may also be in the manner that they responded to the global recession compared to the Euro-zone’s strict austerity. All in all, a strong UK means a strong trading partner for us in the US, hopefully the tepid growth in the Euro-zone will soon give way to a more robust recovery and everyone can reap the benefits of increased prosperity.

    Reply
  3. ddowen17

    Based solely on the graph, it looks as though the Euro-zone’s growth rate will overlap or be equal to that of the UK in years to come. That said, it is clear that Great Britain has benefited from their own national policies as opposed to the Euro-zone’s policy. It is interesting to note that Iceland withdrew their bid to the Euro and has maintained a strong economy in its own right. Overall, it looks like countries out of the Euro-zone are still able to make economic gains.

    Reply
  4. piotrbroda17

    One of the major contributing factors to the UK’s growth could be its monetary policy. We mentioned in class how a single currency for multiple nations can complicate monetary issues. While some Euro-zone countries experience low inflation, others can be going through the exact opposite. The UK is able to avoid this problem by maintaining its own currency. The British pound has not seen the decrease in value exhibited by the euro in the past few years.

    Reply
  5. Victor Matheson

    I think Derek and Piotr are right. Having your own currency has been helpful to Iceland, US, and UK in that germany has not been able to dictate its monetary policy to everyone else.

    Reply

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