Essay about Inflation and Inflation United Kingdom

Submitted By atheerk
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Inflation

United Kingdom Inflation Rate
The inflation rate in the United Kingdom was recorded at 2.70 percent in December of 2012. Inflation Rate in the United Kingdom is reported by the UK Office for National Statistics. Historically, from 1989 until 2012, the United Kingdom Inflation Rate averaged 2.81 Percent reaching an all time high of 8.50 Percent in April of 1991 and a record low of 0.50 Percent in May of 2000. In the United Kingdom, the most important categories in the consumer price index are Transport (16.2 percent of the total weight) and Housing, Water, Electricity, Gas and Other fuels (14.4 percent). Recreation and Culture accounts for 13.4 percent; Restaurants and Hotels for 11.4 percent and Food and Non-alcoholic Beverages for 11.2 percent. The index also includes: Miscellaneous Goods and Services (9.6 percent); Clothing and Footwear (6.5 percent); Furniture, Household Equipment and Maintenance (6.1 percent). Alcoholic Beverages and Tobacco; Health, Communication and Education account for remaining 11.2 percent of total weight. This page includes a chart with historical data for the United Kingdom Inflation Rate.

Consumer Prices Index and Retail Prices
CPI in 2000 = 0.8%
RPI in 2000 = 2.0%
CPI in 2012 = 2.7%
RPI in 2012 = 3.1%

What is inflation?
It is the amount by which prices rise over time. The inflation rate gives us a snapshot of how much prices have risen over a 12-month period.

How is it measured?
Each month the Government announces the Retail Prices Index (RPI) — also known as the headline rate of inflation — which shows the percentage price rise over the past 12 months.
This was set at 100 in January 1987. The index for March this year is 220.7. In March last year it was 211.3. This is a rise of 4.4%.
The RPI is used when calculating increases in State pensions, many private pensions, some State benefits and student loan rates.
It is also used by National Savings & Investments to calculate returns on Index linked Savings.

Unemployment

The unemployment rate from 2003 gradually decreased up until 2005 as this may be due to there being an increase in jobs in the UK. At 2005 the unemployment rate increased and was consistent over the next few however there was a significant increase in 2009 where the unemployment rate increased due to the recession.

Balance of payments
A record of all transactions made between one particular country and all other countries during a specified period of time. BOP compares the dollar difference of the amount of exports and imports, including all financial exports and imports. A negative balance of payments means that more money is flowing out of the country than coming in, and vice versa.

United Kingdom Current Account
The United Kingdom recorded a Current Account deficit of 12834 GBP Million in the third quarter of 2012. Current Account in the United Kingdom is reported by the UK Office for National Statistcs. Historically, from 1946 until 2012, the United Kingdom Current Account averaged -2098.20 GBP Million reaching an all time high of 2752 GBP Million in March of 1981 and a record low of -20767 GBP Million in…