United Kingdom (UK) was undergone the longest recession on record, which was 18 months since began the UK recession in April to June quarter of 2008. Moreover, because the UK undergoes the recession, the vacancies become less and less, people will compete fiercely for a little job offered and the existing long-term unemployed, especially for those who were graduated with no experience and skills. In addition, Gross Domestic Product (GDP) is the most commonly used to measure the national income. Therefore, long-term unemployed cause the productivity of the nation become lower and continuous decrease in UK’s GDP. Furthermore, this will lead to lose confident in economy of UK by the international investors because the interest rate returns on assets become lower. The UK’s government had used a few of policies to overcome the issues those were stated.
First and famous, the policy that UK’s government applied to solve the issues is by ...view middle of the document...
This action will help the UK’s central bank to increase the amount of money in the economy. As the quantity of money supplied increase will lower the interest rate and tend to increase the demand in goods and services. In other words, the increase in needs of the market, the firms and industries need to hire more labours to increase the quantity supplied of goods and services; because the raises the number of labours will tend to increase the job opportunities, the unemployment rate will fall.
Besides that, the government of UK also adopt the work and family reconciliation policies in solving the problems of the unemployment. This policy encourages the participation of women in labour force and directly increases the nation’s GDP. With the participate of women, the unemployment rate will decrease because the unemployment rate is calculate by using the formula which is number of unemployed divide by the labour force and then multiply 100%. Furthermore, by implement this policy, firms and industries can promote childcare provision with a flexible working period, together with reform of leaves that permit labour market exit in order to take care for their children and family by following the Labour’s Law. Regarding to the advantage, women can have no family worries in the future; therefore, they have more incentive to involve themselves into labour force for purpose of gaining more income to reduce the family’s burden.
Besides applied the policies, UK’s government also make injection to solve the problems of unemployment rate. The central bank of UK reduced the interest rates to 1.5 percent for purpose to driving downs the cost of lending and making it easier for consumers and businesses to access credit. Additionally, the banks of UK have been unwilling to lend sufficiently with a 37 billion pound injection into major banks; and, to against the potential losses on risky loans, an offer of the insurance to banks was mapped out. Moreover, the UK’s government also carry out a temporary cut in value added tax (VAT),which was from 17.5% to 15%. The purpose of government of UK carry out the action was to attempt to encourage consumers to spend and boost the retail sector and expand the economy.