The influence of financial crisis in UK

The influence of financial crisis in UK

1 The banking in UK

The par value of England bank have a great decrease and heavy debt. Since 2008 to 2009, the market value of banks all over the world have dropped suddenly.

Until now, The percentage of government loan and GDP is 54%. If the value of bank continue shrink, government will rescue the bank which means the percentage will be doubled or tripled in this situation. It will cause the UK’s creditworthiness dive to below 3A. Once this happened, citizens begin to dump pounds and the pound crisis will happen.

                                            The decrease of market value

2 The value of Pound

The value of Pound decline persistently. The exchange rate between Pound and Dollar has decreased 27% since 2008. At the same time, the range of exchange rate between Euro and Pound increased over 32%. It means the exchange rate between Euro and Pound is close to fair price.

3 The subprime mortgage lending institutions in UK

With the influence of subprime crisis in USA, the profits of British subprime lending institutions fell sharply. Lead in these institutions, depositors who have saving accounts in these institutions began to pick up cash insanely. And while a number of banks have stopped offering credit cards to the debt-challenged, there are still companies handing out subprime plastic. This makes the subprime lending institutions cannot achieve a balance of payment. There will be more and more subprime lending institutions forced to file for bankruptcy.

4 The enterprises in UK

The enterprises in UK are suffering a formidable situation. For example, The MARKS AND SPENCER. Compare with 2010,The year’s sales figures in 2011 is reduced by 7.1%. Then in Jan. 7th ,2011,The company announced that they will closed their 25 food stores in UK. There are more enterprises have the same situation in UK.

5 The people's life
After the financial crisis happened, the prices of products is higher than before. Such as milk, eggs,meat, vegetables, even the cooking oil. All of these products' prices were increasing. They can not afford it any more. They have to living with austerity. And  also because the crisis, some companies bankrupt one by one ,more and more people lose their job. This made the situation more worse.  It looks like a vicious circle.

In my next blog, I will talk about the measures of UK government during the crisis.