Étude d'un document sur la situation économique en Angleterre (document en anglais)

Abstract

This document is an essay about the economic situation in England and is based on an article wrote in the New York Times as well as the chapter 7 (Economic environment) of the textbook “Global Business Today” by Charles W. L. Hill. It will show how a powerful country as Britain is currently facing difficult economic conditions and how these difficulties are painful for everyone in and outside the country.

Introduction

Economics factors are important influences on a company’s motivation when the time to start creating business comes. Indeed, it allows estimating the potential benefits and risks of a launch in the domestic market (Hill 2008, p258).

The Gross Domestic Product (GDP) and inflation are two factors which allow measurements of the economy health of a country (Hill 2008, p261). According to NYT, England’s inflation is currently at more than 3, 5 percent, rather it was targeted at 2 percent for the middle of the year. In addition with the fall in GDP, Britain economy had and will continue to be badly affected for the next months.

The assessment starts by showing the link between the New York Times article and the chapter 7 of the textbook compared to additional articles chosen from academics journals. It is followed by the implications of England’s economic difficulties for British domestic businesses and international businesses.

Article précis

This article wrote by Werdigier Julia is from the New York Times and has been published in May 2012. It is about the British economy and more particularly its evolution which has been pointed since the beginning of the year. It shows how the weak growth and high inflation give gloomy outlook for Britain.

Link between article and chapter of the book

Governments generally have four main objectives with regard to the economy of their country: A positive economic growth, low inflation, minimum level of unemployment and a good balance of international payments and receipts (Hill 2008, p267).

Let’s focus on the two first goals. The recession is a characteristic of an unstable economy (Hill 2008, p267). For England after seeing its growth rate shrank by 0.3 percent during the last quarter of 2011, it underwent a further decrease that registered a decline of 0, 2 percent. Signs of its economic instability, it is the first time since 1970 that the country recorded a double-dip recession (NYT).

Inflation, which is “an increase in the general price level over time” must be maintain between an average of 1 to 3% to guarantee a price stability and to support positively the economy of a country (Hill 2008, p270). Britain has seen its inflation exceed the 3% during the first quarter of the year and even if some predictions say that the inflation would decline later in the year, it should stay above the central bank’s 2 percent target (NYT).

According to Hill (2008, p271) “high inflation can lead to the depreciation in the value of a currency”, England does not escape to the rule. Indeed, the country saw the pound fall against the American dollar and the euro in April.

Link with others articles

Now it has been shown that this article is well linked with the chapter 7 of the textbook, this essay will follow with the correlation between the Britain economic environment and others articles found from academic journals.

An instable economy often means a loss of jobs in the country. And British are perfectly aware about this situation, indeed between the year 1980 and 1990 the nation lost more than two millions jobs in manufactory (Greenaway 1998).

The government launched a plan of austerity to try to fight the recession. Austerity is attached to an economic policy which aims to slow the demand for goods and services to reduce the various deficits and overall debt of the State. England is not the first country which is using this kind of plan. Indeed recently Greece also launched a plan of austerity to try to slow down the recession (Kinsella 2011). Further in the past the IMF had demanded to Russia a plan of austerity to try to go out from the economic crisis they had in their country (Mc Carthy 2000)

The fall of the pound against the dollars and the euro could make more difficult for companies to borrow, and in some cases it is better to lower the interest rate (Aghion 2000). This is why the bank of England said face to a difficult choice. Curbing inflation or helping the

...