To what extent has Britain been affected by the financial crisis and what efforts contribute to recovery of the British economy?

The worldwide financial crisis of 2007-2008 almost brought down the global financial system. The fundamental cause agreed broadly was the combination of credit and the housing bubble crunch (Acharya and Richardson, 2009). Most people are placed on the same side of credit ranking relaxing area; however, the question may be raised that why the housing bubble would bring the financial system instead of having an effect on just on the housing sector of the economy. The answer is assigned to the bankers and regulators on the Wall Street. In this global economic crisis, banks had shirked regulatory capital requirements with the temporarily placed assets increasing and the reduction on the number of holding capital requirement allowed by the regulators.

The financial crisis began to out of control after September 2008 and led to a number of fairly large financial institutions bankrupt or takeover by governments. As a financial industry and service oriented country, although Britain has a smaller size of economies of scale than America, financial industry accounted for a greater proportion of the national economy, the real estate market existing bubble as well. Therefore, the British economy suffered a massive hit by the crisis and shaped the current British commercial and business scene (Hodson and Mabbett, 2009, pp. 1041–1061). These factors are making a huge influence on the public now, either at national or individual level. Under such circumstances, Britain tends to cut government expenditure to repay debt rather than cause inflation. In terms of the latest data from the Office for National Statistics, the British economy is picking up by 0.2% and confidence of consumers is being improved.

This essay will contain two main parts. The first part aims to give an overview of the British economy has been affected by the financial crisis on the following aspects. They are currency devaluation, housing and mortgage market bubble as well as the employment policy. In the second part, this essay will demonstrate the consequences of these aspects and efforts contributing to the British economic recovery, especially for employment policy. For a better understanding, efforts and consequences will follow behind by introducing the three aspects.