The UK Economy in Europe When talking about a strong economy, some key economic indicators will be mentioned; inflation, unemployment and economic growth. These are considered the three main macroeconomic indicators of any economy. To define a strong economy in the simplest form you need to have a low inflation rate, low unemployment and constant economic growth. During this essay other European countries (e.g. France, Germany, Luxembourg, Belgium, Spain, Italy) will be compared and these economic indicators mentioned as well as others. We will start looking at inflation rates. “Britain's economy has slowed over the past 12 months but remains among the strongest in the developed world, says report” (BBC News Online). The UK's underlying inflation rate remained unchanged at 2.3% last month, which is below the government's target rate of 2.5%, which is positive for the economy. The headline inflation rate, which includes mortgage interest payments, fell last month from 0.4% to 1.7%. These figures show the rate at which prices are increasing. When we compare the UK's annual inflation rate of 1.2% with that of Germany and France (-0.6% in October), which is around 2%, it appears that our rate is quite low and therefore positive for our economy. Inflation in the Eurozone is forecast at 2.1%; this is measured by the Monetary Union Consumer Price Index (MUICP). Looking at this we can see that this figure is very close to the UK inflation rate. Overall inflation in the UK is at a lower rate than its European neighbours, which is an indicator of a strong economy. If we look at unemployment in the UK we can see that it is around 900,000, or 2.3%. This is the lowest level since the 1970s and is at a lower percentage rate than Japan and the United States. Germany, which recently announced that it had just entered recession, has a very high unemployment rate of around 8.0%, and France, Finland and Spain are even higher. The UK, Netherlands and Luxembourg have among the lowest unemployment rates in Europe. “Unemployment is rising again in France and Germany, a sign that the eurozone's two largest economies are still in the grip of a recession” (BBC News Online). France and Germany are Europe's largest economies and recent data shows that unemployment rose by 15,000 in... middle of paper... long performance is reflected by indicators such as solid growth and forecasts for next year which predict annual growth of 2.75% - 3.75%. Inflation currently at 2.3% is lower than expected, which is a strong indicator of a strong economy. Our unemployment is at its lowest level since the 1970s and lower than the world's two largest economies, currently at 2.3%, or about 900,000. Interest rates remain unchanged at 4%, a low level and the reason why the UK economy has a stable property market. The UK's main economic problem is manufacturing. It could be argued that this sector of the economy is in recession following negative growth data over the last two quarters. As a result, the UK suffers from a high trade deficit, which is also due to the high value of the pound. But overall the UK economy is in good shape and is benefiting from the global economic slowdown taking place around it. References: www.bbc.co.uk Sources: · www.bbc.co.uk · www.bized.ac.uk · www .europa.eu.int · www.ukonline.gov.uk · The Daily Mail · The business environment - Brooks/Weatherston