Will The Great British Economy Ever Return To Former Glory?

As the Eurozone crisis continues to threaten fiscal unity, British economy suffers as a result of the rippling effects caused by the potential Greek bailout; leaving mortgage rates rising, lending at an all-time low and fifteen of the world’s biggest banks downgraded, three of which are Britain’s principal firms.

The ripples are indeed devastating and have left Britain’s businesses, big and small, crippled with debt, with one question left unanswered; is the British business sector going to continue upon the downhill spiral or will it ever manage to see a boost?

In the first quarter of 2012 it was revealed that an astonishing 670 UK businesses had gone bust as the country slumped into a double dip recession and despite continuing please from retail specialists that SME businesses required assistance with commercial mortgages; the government failed to take action. The continuing EU crisis has indeed had a phenomenally negative effect on the UK business market as banks and lenders across the country tighten the reigns of over lending restriction and remain reluctant to extend credit to struggling businesses…it is hard to see a way out.

There have been numerous high profile casualties at the height of the double dip recession and as a result of the EU power members failing to find common ground it seems as though the struggle is set to continue as fiscal unity reaches breaking point however all may not be lost.

In June it was announced that the Bank of England will finally breathe life into the economy with an unconfirmed cash stimulus injection designed to assist business mortgage and home mortgage owners by enabling banks to ease their lending restrictions. The plan aims to, over the coming months, inject Britain’s struggling banks with an unknown stimulus sum on the basis that mortgage rates are lowered and an increasing number of small business are offered commercial mortgage and business loans. Alongside the cash stimulus, the Bank of England has also introduced a £5billion lending scheme that will see it auction off a £5billion injection to one bank a month beginning from July on the basis that the winning bank substantially lower interest rates.

The past few years have been a struggle for the overall British economy and the business sector however in wake of the ever deepening EU crisis; Chancellor Osborne and the monetary committee have finally begun to prove that Britain is strong, can with stand and come out the other end.

Many may argue that the British business sector has suffered far too much to ever fully recover and one cannot help but agree. Such action should have been taken in immediate wake of disaster and indeed it was in the form of quantitive easing (QE) although it did create a level of ease on the economy it did not have the ultimate effect on British economy as saver rates were hit severely, small businesses were continuously denied loans and struggling businesses failed to see credit extended. The monetary committee have decided to take further action, despite the threat facing savers, by beginning the next ‘batch’ of quantitive easing with a reported £50billion to be injected into the economy.

Unlike our struggling EU Partners; Britain has the means to stand tall however as with all difficult tasks; nothing is achieved with ease, in fact this is the most danger our economy has faced in a long time which means escape will be far from easy. Only time will tell whether Britain will return to former glory however with continuing efforts, governmental support and monetary aid we have a good a chance as any.

 

Author Bio: I have spent over twenty years working in the finance sector, advising those with business or personal financial needs on the right financial path to take, whether it is a home or commercial mortgage or loans. I go against the stuffy financial image by being a bit wild! I am an avid rock climber and love to scale the world’s greatest buildings!

 

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