Tag Archive: UK


In January 2009 Consumer Prices Index (CPI) inflation fell to 3%, in December 2008 the CPI was 3.1%. For the last four months the CPI has fallen from a high of 5.2% in September, to 3%.

As well as the falling energy prices, the reduction in VAT from 17.5% to 15%, announced in the pre-Budget report in November, also had an effect. A zero or negative RPI could result in the extraordinary occurrence of average pay increases also falling towards zero with the current strain on government finances some are calling for a freeze on public sector pay.

The decline in CPI wasn’t expected – the consensus forecast among analysts had been for an annual rate of 2.7%. the decline in energy bills were slightly offset by rises in the price of household equipment, such as furniture, and alcohol, clothing and footwear. the smaller than expected drop was also due in part to a reluctance by retailers to slash prices further after heavy discounting in December. One of the reasons why the Bank of England delayed cutting interest rates last year was concern over inflationary pressures in the economy; the bank has already cut interest rates to 1% in an attempt to stimulate the economy. They believe that CPI inflation will drop to 0.5% this year and will remain below its 2% target for two years.

The “Credit Crunch” is the term used to describe the economic status which 1st became a problem in 2008. Basically the problem is that the banks are refusing to lend because they can’t afford it. This is causing a domino effect throughout the country.I should point out that it is not just the UK that are in the middle of this economic crisis. One problem which keeps cropping up is that public spending has been reduced this is creating problems for businesses as they are unable to borrow from the bank the next logical move would be to rely on public spending but as this had declined businesses are unable to get the cash that they
need from this source which can affect their long term cash flow. This in turn means that businesses have had to make some staff redundant but this is not without consequences; as if you make staff redundant it will not improve public spending as if you don’t have a job any money you do have goes on paying bills so you have no disposable income.

In some cases this is not enough and the business goes into liquidation as we have seen with Woolworths. This ultimately makes the problem worse as unemployment figures rise, thus decreasing the number of people with disposable income and increases the number of people relying on government schemes such as the dole just to make ends meet. Which is not without problems as the government does not have an infinite amount of cash, they are attempting to fix the economy with a number of things such as reducing the rate of VAT but this is not really ideal as demonstrated in the article about VAT changes. Another thing that you may not be aware of is that the government is borrowing money from other areas such as the NHS in an attempt to fix the banking crisis.

This creates even more problems such as the NHS having to make cut backs on some of the services that they offer which can impact on the public when they need treatment and waiting times are increased as they like everywhere else are having to make some staff redundant. The only plus side I am aware of is those lucky enough to have disposable income are able to purchase things fairly cheaply due to cuts in VAT and also businesses are so desperate to stay solvent that they are having massive sales which basically means that for the duration of the sale they have a fairly good cash flow unfortunately it is not good for business to have a permanent sale. So as you can see there are good points in between all the doom and gloom but when you look at the bigger picture the good points don’t seem quite so great.

Health care in the United States is provided by several separate legal entities it is estimated that the U.S. spends more on health care than any other nation in the world. In 2007, the U.S. spent a projected $2.26 trillion on health care, or $7,439 per person. In the U.K that would equate to approximately £3,700 per person. This is due to the sheer size of the U.S.A and the fact that it is divided into many states therefore a system such as the NHS would be impractical.

According to the Institute of Medicine, the U.S. is the only wealthy, industrialized nation that does not have a universal health care system. Around 84.7% of U.S citizens have some form of health insurance; either through their employer, purchased individually or provided by government programs. There are a few publicly-funded health care programs to provide for the elderly, disabled, children, veterans, and the poor. There is a federal law in place that basically states that the public are entitled to emergency treatment regardless of their ability to pay.

As with any system the U.S healthcare system is not without problems. For example it is estimated that 47 million U.S citizens, 8.7 million of which are children, are without any health insurance with this figure rapidly increasing as employers are shifting the cost to employees who are unable to meet the cost of the premiums. The costs of healthcare are rising at 5 times the rate of inflation. As a result of employers shifting the cost to employees there are strikes taking place all over the U.S such as the Southern California grocery workers’ strike and lockout in which nearly 60,000 workers saved health care benefits and beat back employer demands to freeze pension funds after holding strong on the picket line for five months. Under grocery management’s original proposals, a worker making slightly less than $20,000 a year would have had to pay nearly $5,000 to maintain the same level of benefits they had in the previous contract. Other cost increases hitting workers include larger hikes in the cost of family coverage, less access to needed prescription drugs through stricter HMO formularies and higher prices for more comprehensive coverage. According to the statistics consumers are using more prescriptions, at younger ages and for more conditions, and substituting newer, more expensive medications for established products.

In the U.K on the other hand healthcare is provided by the central government and is mostly free but there a few areas where costs apply; although there are private practices within the healthcare sector. Forming the basis of healthcare in the United Kingdom, each system—National Health Service, NHS Scotland, NHS Wales and the Health and Social Care in Northern Ireland—operates independently, and is politically accountable to the relevant devolved government of Scotland (Scottish Government), Wales (Welsh Assembly Government) and Northern Ireland (Northern Ireland Executive), and to the UK government for England.

The NHS is divided into two sectors the primary sector which includes the following:

  • NHS Direct
  • NHS walk in centres
  • GP practices
  • Dentists
  • Opticians
  • Pharmacists

The secondary sector includes the following:

  • Emergency and urgent care
  • Ambulance Trusts
  • NHS Trusts
  • Mental Health Trusts
  • Care Trusts

The NHS is also not without problems for a start the NHS is over budget in several areas by as much as £105 billion. It is also understaffed. As a result waiting times are at an all time high, although some argue that it is due to the credit crunch and the growing immigration to the U.K. As previously mentioned in the article “The privatization of the NHS” the government’s idea to resolve some of the problems with the NHS is to privatise healthcare; the question is will this actually help or is just a social construction created to justify increasing taxes to make more money for the government?