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International Macro Post
The article “UK growth slows to 0.7pc as services sector falters” was authored by Szu Ping Chan for the Telegraphy UK on October 24, 2014. The article explores the economic growth of the United Kingdom (UK), which according to the author, is among the fastest growing economies despite slow growth in the service sector. From the article, the UK’s economy increased by 0.7 % between July and September which was a drop from 0.9% in the second quarter of 2014. The slow growth is as a result of the triple-dip recession experienced in the Eurozone.
The primary economic issue under discussion in the article is economic growth in the UK. In the third quarter of 2014, the economic growth of UK slowed down as a result of increased business cycles experienced in the euro area. In addition, there was a decline in gross domestic product from 0.9% to 0.7% which was as a result of inflationary pressures and unemployment levels. However, policy makers and economists are positive that the economic growth of UK shall increase rapidly after the euro crisis is overcome.
From an economic perspective, the major causes of the decline in economic growth in the third quarter in UK are recession in the Eurozone, economic deficits of its trading partners, and inflation (Aghion and Durlauf 17). Since UK operates in the euro block, recession experienced in the region and economic deficits from its trading partners have effect on its economic growth (Goodwin 23). For example, euro crisis have impacted UK’s services sector. On the other hand, weak inflation saw the UK’s economy grow by 3 % in the third quarter, declining from 3.2% in the second quarter (Chan para 5).
The article is beneficial as it provides an insight on the economic situation in UK in terms of economic growth. In addition, it is informative and educational because it analyses the economic situation from economic point of view. The article provides a normative position since the opinions of the Chancellor and other economists that have been used. The normative position provided is that UK’s economic growth has plummeted as a result of slower growth in the services sector. The article has had a positive impact on individual view about UK’s economic growth. For example, it has influenced my personal opinion what is affecting UK’s economic growth. Based on the article, I have realized that UK is the fastest growing economy among the Great Seven (G7) members.
The article provides an accurate portrayal of the economic situation in UK because it uses facts and statistical evidence to support the arguments made. For example, charts showing the economic growth of UK. This is backed by economic figures from the Bank of England and the perception of policy makers, and economists.
Aghion, Philippe and Steven N. Durlauf. Handbook of Economic Growth: 1a. Amsterdam: Elsevier, 2005. Print.
Chan, Szu Ping. “UK growth slows to 0.7pc as services sector falters”. The Telegraph UK. 24 Oct. 2014. Web. 25 Oct. 2014. < http://www.telegraph.co.uk/finance/economics/11184540/UK-growth-slows-to-0.7pc-as-services-sector-falters.html>.
Goodwin, Andrew. “The UK Economic Outlook.” Institute for Fiscal Studies, 2013. PDF file. 2013. < http://www.ifs.org.uk/budgets/gb2013/GB2013_Ch2.pdf>.