The British Economy Essay Example | Topics and Well Written Essays - 1500 words - 5

The British Economy - Essay Example In this process, the accuracy and efficiency have enhanced but complexities have also increased significantly. International trade has a great economic importance as it helps to bring economic prosperity to a country. International trade activities include import and export which influences foreign and domestic exchanges. Besides, certain economic risks are also associated with international trade and hence, the government always try to control international trade-related activities. This paper will attempt to deal with foreign exchanges policy of UK. Earlier, the UK pound was used to be determined using the fixed exchange rate policy by comparing to other foreign currencies. However, due to certain shortcomings of fixed exchange rate policy, the UK Government has shifted to floating exchange rate policy. This paper will present explanations on fixed and floating rate policies and how the UK Government plays a crucial role in controlling and deciding the foreign and domestic currency policies. The UK is one of the leading economies in Europe and it belongs to the category of first world country. It is a â€Å"leading trading power and financial center is the third largest economy in Europe after Germany and France†. Since last two decades, the Government is playing a very crucial role in the growth of agriculture, services, and industrialization. Its GDP as per purchasing power parity was nearly $2.189 trillion and GDP as per official exchange rate was nearly $2.259 trillion. The per capita GDP was nearly was $35,100 with real GDP growth rate of 1.6% in 2010. Regulatory authorities including the central bank (Bank of England) is responsible for managing and controlling the economic affairs. The inflation and unemployment in 2010 were 3.3% and 7.9%. During the financial crisis of 2007-2008, the UK’s economy was heavily affected.