Jersey economy: Anxious times.

Jersey is another overseas British Territory that has made Offshore Banking and finance the engine for its growth and development.

While earlier it was agriculture, fishing and knitwork that sustained its economy, today, it is high finance that contributes nearly 50% of the territory’s GDP, apart from 60% of the Government’s tax accruals. Liberal laws relating to establishment of firms and low tax rates have attracted a host of Banks and financial services companies to establish their offices here. British nationals subject to high taxes at home have found it convenient to base themselves in Jersey to escape the tax rigors at home. Nearly 35000 firms, including Banks and financial services companies are said to be registered in Jersey. The proximity to U.K. and the E.U. markets, as also free access to them have played an important part in boosting the economic prospects of Jersey.

Agriculture continues to be an important economic activity, with vegetables and flowers attracting major buyers in the U.K. And of course, the world famous Jersey cow that has been cross-bred with local varieties in various parts of the world is a native of Jersey. Special mention may also be made of the Jersey Royal Potatoes and dairy products that are exported from Jersey, mainly to the U.K and the E.U. Tourism is another area that continues to grow, and contribute to the economy in increasing measure. The majority of the tourists are from Britain.

The Jersey administration is also encouraging light industry and has succeeded in developing a small but thriving electronics industry. However, Jersey has to import raw materials, foodstuffs, machinery and equipment, chemicals, etc.

Presently, there is a sense of anxiety among the denizens of the Island about their future, especially in terms of the current global economic doom.

British economy: A toss between recovery and recession.

The British economy is tantalizingly poised between recovery and more recession. This, in essence, is the reading of the British Chambers of Commerce.

The major issues for the British economy now are the high unemployment rates, the critical state of public finances, with a huge public debt, and trade and commerce that refuses to move north in spite of historically low rates of interest.

In spite of the Central Bank having reduced the prime rate in succession to the lowest level so far, to 0.50%, the low demand for goods and services has kept production and output low, resulting in poor offtake of credit, and lack of fresh employment opportunities.

With profits taking a hit, businesses are finding different and innovative ways to survive by cutting costs, apart from the standard job cuts response. This cycle of unemployment, over indebted consumers, high public debt, and general downtrend in the market has combined to pull back Britain from a recovery that was expected and is still within reach.

But given the current situation, it is a toss between recovery and more economic troubles. One step forward, one step back, has been the trend of economic developments in Britain in the last few months. The result being the country is not able to break free of the recessionary grip and get moving towards a genuine and sustained recovery, that is not hostage to clever and manipulative statistical tools.

Unless the British Government gets its economic act together, and fast, Britian may continue to be in the grey zone for a much longer than expected time.

Great Britain in a great mess.

Great Britain, the closest ally of the United States in the “war on terror”, is also America’s closest ally in the war on economic recession. With unemployment touching an all time high of 2.50 million, and the financial services industry still out of its elements, Great Britain is really in a great mess.

A couple of months ago, the scene looked encouraging for the British economy, and there was hope of the worst being behind them. It was not to be. To add to the gray skies in London, came more gray news from the Bank of England that enlightened the British citizenry that the bad times were not over yet, and celebrations were a long way away.

The present concern about the British economy is said to be deflation, rather than inflation, which is reported to be well under 2%. So far the British Government has pumped in nearly USD 250.00 billion into the economy to prevent it from sliding off the abyss, into a black hole, as it were.

But the results of this exercise have been slow in coming, and in the meantime, the negative factors ruling the economic kingdom right now, have gained an upper hand over the situation. With the Bank of England prime rate fixed at 0.50%, it is doubtful if it could be pulled down any further. The Government seems to be running out of options.

With the situation as it is, the best of Britain’s economic and financial brains seem to be stretched to the limits, and still not able to come up with a viable plan of action that could see them out of the woods. To make matters worse, is Britain’s involvement, even if not as the ring leader, in the invasion and occupation of Afghanistan and Iraq incurring heavy expenditure, that could have gone into more worthwhile causes within Her Majesty’s Kingdom.