The Financial Crisis

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The financial crisis in 2007-2008 caused many kinds of significant problems for small businesses and large businesses alike and I am concerned that this may occur again. Due to the inflation rate, on average, you would have to spend 2.70% more money in 2018 than in 2017 for the same item. In other words, £100 in 2017 is equivalent in purchasing power to £102.87 in 2018. The 2017 inflation rate was 2.13%. The current inflation rate for 2017 to 2018 is now 2.70%. This is going to cause more problems for businesses and due to the rising costs of similar items, less people will buy the same products as previous times. This means that business sales will go down and less money will be spent. This could cause problems because there isn’t money going into businesses, which means they will close and thus will not have the money to support inflated costs for food and their homes. This could then result in them losing their homes. I believe the government needs to become more involved in the Bank of England in 2018 to ensure that this doesn’t happen again. England is coming out of the EU, which means things are not secure for us anymore and the inflation rate could rise again. The Bank of England and the government need to make sure that people’s money is safe, even when the current financial situation isn’t.

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