United Kingdom GDP for 2010 is Flat

The economy of United Kingdom is the sixth largest in the world. It was the first to industrialize in 18^th century. In 19^th century, it has the predominant role in the global economy. However, during Second Industrial Revolution, the United States and the German Empire began to challenge its dominant role. Then, due to extensive war efforts in two world wars, and the dismantling of the British Empire, USA completely deposed it a major player in world economy. However, it still plays an important role in global economy.

There was a UK property boomed for seven years prior to the 2008 economic crisis. The cause of this boom are-

•· economic growth and low interest, the growth in property investment,

•· increase in property investment,

•· good planning in housing.

First-time buyers of residential properties, whose credit standing prevented them to get a housing loan before are now have a better chance of getting one.

With many sellers reluctant to drop their price, there is a chronic over-supply of housing on the market at prices in excess of demand. This situation has arisen partly because of the deferred repayment windows created by the government forcing the courts to delay possession orders

Due to deferred payment policies of UK financial institution on property loans, many sellers were reluctant to drop the selling prices in spite of the over-supply of properties for sale in the market.

This has caused apprehensions for some observers that there is a real estate bubble in UK that has not yet busted, up to this time.

Economists opined that UK GDP for 2010 would be flat to slightly negative at 1.1% drop. Bank of England interest rate at 1%; inflation rate will be under 1%; and Treasury rate at 1.3%. But the budget deficit will be at 13% of GDP, which will lead its national debt to 70% of GDP.

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