The most notable element of the two economies is the size of their populations and the similarities in their economies. Both the US and the UK tend to rely on the service sector to boost their economy because of the huge annual sales growth in this sector. Additionally, the post-crisis era saw the two governments increase their liquidity, which lead to the decrease in the lending rates in the countries.

The Economic Status of the UK and the US

The US economy took a turn as the year 2014 began. The country’s economy kept on soaring as it continued its recovery from the 2008/9 financial crisis that had hit the country. Indeed, the gross domestic product for the country has steadily grown at 2.8 % for the past two years. This is an increment of 0.8% from 2% in previous years. This raise led to the improvement in the labor market as this market improved consistently in 2014. This was reflected in the increasing job opportunities in 2014 since 1999. This was also a huge decrease in the rate of unemployment since 1982. Overall, the private sector 12 million jobs in fifty-nine successive months. This was the longest strip of continuous growth of jobs from the private sector in the history of America. The result was the decline of the unemployment rate at 1.1 percent. The 2008/9 fiscal crisis became a blessing in disguise for the US as the GDP rose to unexpected heights. However, the rise of the economy and the substantial progress in several sectors of the economy has The US government needs to stimulate growth in other sectors of the economy.

In 2007, the economies in both the US and the UK were steady at 1.8% and 2.6% respectively. However, the growth is seen in the US was falling in 2007 mainly because of the housing bubble.effects of high fuel prices. In 2008, the GDP for both countries fell to -0.3, which was among the lowest GDP growth in the history of the two countries. The similarity in the drop of the growth rate indicates the similarity in the dependence of oil in both countries. Several economic discrepancies such as deregulation and predatory lending were also the cause of the fiscal crisis that ended up affecting the economies all over the globe. The following year was worse in Europe than in any other parts of the world because the growth rate dropped to -4.3 % while in America it fell to -2.8%. The situation was saved by the government through bank bailouts. This was done after the realization that the crisis was deepening. Nevertheless, the rate improved in the year 2010 as the US astonishingly achieved a growth rate of 2.5% while that of the UK was at 1.9%. However, this rate was not sustainable as the solutions offered to curb the crisis were short term.

This is a similarity with the growth of the UK GDP, which boasted a GDP growth of 2.6% in the first three-quarters of 2014. This growth was among the highest GDP growths in the country since 2007, and the best compared to other major economies. However, this growth slowed down in the last quarter of 2014 as the country experienced a 0.5 – 0.7 % drop from the previous 2.6%. Indeed, official statistical data indicated that the final quarter of 2014 had a negative impact on the economy as the gross domestic product reduced to 0.5 quarterly rates. This was lower than the third quarter of 2014 where the growth rate was at 0.7%. However, analysts state that the continued reduction in oil prices is likely to bring a positive impact on the economy as the costs of household items are forecasted to reduce.

The reduced growth in the UK’s economy was attributed to the unreliability and the erratic nature of industries such as Although several nations in the UK have tried to reduce the reliance on service industries to balance their economy, some have received huge blows. This is because the benefits from industries such as construction and manufacturing fell by 1.8 and 0.1% respectively.

The drop in the UK GDP is comparable to that in the US as the gross domestic product fell to 2.6% from 2.9%. The drop meant that the overall growth of the US economy would be at 2.4 % below the United Kingdom’s growth of 2.6% over the year.

The GDP per capita has been on a steady rise in the US with the country being ranked the tenth country in the planet. The US GDP per capita has changed over time with the changes evident in 2007 to 2010 period. The GDP per capita was at the highest in 2007 at 50,000 $. However, it began falling in 2008 to approximately $48,000, and it was lowest in 2009 at approximately $46,500. This period saw the rise in the GDP per capita halted by the 2007/8 fiscal crisis. Even so, the country’s per capita resumed its upward spiral in 2010, and now its estimated GDP per capita is at $49, 811.

Similarly, the UK GDP per capita had been in a constant improvement prior to the crisis in 2007 and 2008. However, the UK was ranked the 26^th country in GDP per capita in 2014 compared to the US tenth. The country was also affected by the financial crisis as the GDP per capita was at 41,567.40 USD in 2007. However, the GDP per capita began to fall in 2008 and 2009, with 2009 being the lowest in this period at 39,036.35 USD. All these occurrences are attributed to the 2007/2008 fiscal crisis, which had ravaged the country. Just as the GDP per capita began improving, UK’s per capita started improving the same way. In 2010, its value was at 39,471.85 USD. This value improved to 40,231.02 USD at the end of the last quarter of 2014. This is a distinct indication of the efforts by both governments to improve their citizen’s standards of living by improving their respective economies. The similarities posted in the GDP per capita for both countries show that the financial crisis had affected their operations in a similar manner. This is also due to the similarity in the major r industries in the UK and the US. The major industry that influences most of the operations of these economies is the service industry whose improvement has done a lot for these economies.

Another economical fact that can be compared between the US and the UK is the unemployment rate in the two countries. Prior to 2007, the two countries had the lowest rates of unemployment in the universe (Appendix). The unemployment rate in the UK was less approximately 5%, the lowest value in the period between 2007 and 2014. However, the rate began increasing 2008, escalating to 8% in 2009. This was considered the highest rate of unemployment at the time. However, the rate grew dangerously towards the ten percent mark before beginning to reduce considerably during 2013 and the first quarter of 2014. The unemployment rate in the US is comparable with that in the UK during this period mainly because of the effect of the fiscal crisis and its after-effects. However, the US rate rose gradually from 2007 to 2009 before beginning to to an estimated value of 7.5% in 2009. This was the highest unemployment rate in the period of 2007 to 2014. However, it was lower than the UK’s where the unemployment rate, which was at the peak at 8% in 2009.

The 2007/8 financial crisis had a huge impact on the rate of inflation in the two countries. The prices of important prices went up meaning that the available money was not enough for the purchase of these goods. The statistical information for these countries indicates that the US had an inflation rate of 4.1% in 2007. This rate would drop to 0.1% in 2008 before beginning to rise again in the year 2009 to 2.7% in 2010. Currently, the inflation rate in the US is at 0.1%. This good news for all the businesses and firms in the country because the stability of the dollar. Similarly, the rate of inflation was at four percent in the UK in the year 2007 before reducing considerably between 2008 and 2009. However, this rate was short-lived as the rate began climbing again in 2010 to 5.5% in 2012. The rate was currently at 2.3% in 2014.

The 2007/08 fiscal crisis marked the beginning of a new era in economic politics in the two countries. They had to define different ways of dealing the crisis that had threatened the stability and sustainability of their major institutions. The US began by bailing out its major banks using federal banks. This would see the country be impacted in lesser proportions than the UK. Both countries had to increase their liquidity rates in order to curb any eventualities such as another escalation of prices of essential items.

Conclusion and Recommendations

The economy is a very vital component in every country because it is concerned with the status of the livelihoods of its residents.

Therefore, in a bid to escape such crises again, the countries should increase liquidity of their wealth in readiness for any eventualities. Moreover, all the plans devised should work for the long-term rather than the short-term. This will ensure that all the occurrences in the future are planned for instead of just reacting when they arise.

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