A Pence and a Pound

The history of the money system used in England can be divided into two periods; before and after Decimal Day (1971).  Each period’s currency was accepted as a means for trade, durable, and portable.  The main difference between them was in the divisibility of the money.

Before Decimal Day in 1971, the British Pound originated from the value of one pound of sterling silver.  The silver penny, or pence, was also set so that the weight of 240 pence is one sterling pound.  There were 20 shillings to a pound, and 12 pence to a shilling.  Here is some common slang used to describe currency before Decimal Day (http://www.learnenglish.de/culture/britishmoney.htm):

Farthing = copper coin value 1/4 penny
Ha'penny = copper coin value 1/2 penny
Penny = copper coin, one of the basic units = 1d
Thrupenny bit = brass coloured twelve sided coin value three pence = 3d (thrupence) 
Sixpence (tanner) = silver coin value six pence = 6d
Shilling (bob) = silver coin second basic unit, value 12 pence =1/- 
Florin (two bob) = silver coin value two shillings = 2/-
Half-crown (half a dollar) = silver coin value two shillings and six pence = 2/6d
Ten shillings (ten bob) = banknote value 10 shillings = 10/-
Pound (quid) = third basic unit, banknote value 20 shillings or 240 pence = £1
Five pounds (fiver) = banknote value five pounds = £5

After Decimal day, the value of the penny was set to be 100 pence to a pound (similar to the penny used in American currency).  This effectively increased the value of a penny and made the pound divisible in a more standard way for global trade.  Coins now are available in 1 pence, 2 pence, 5 Pence, 10 Pence, 20 Pence, 50 Pence, One Pound (Quid) and Two pounds (two quid).  Paper money (notes) is issued in denominations of 5, 10, 20 and 50.  At this time, England does not have a 100 note.  Here is some common slang used to describe currency after Decimal Day – you may notice a lot of it is similar to pre-Decimal day (http://www.learnenglish.de/culture/britishmoney.htm)

Nicker or quid=	£1
Lady=	£5 (fiver).
Tenner=	£10
Score=	£20
Pony=	£25
Ton=	£100
Monkey=	£500
Grand=	£1000

Word Count: 226

Works Referenced:

http://www.learnenglish.de/culture/britishmoney.htm

http://www.lonympics.co.uk/new/1009.htm

http://en.wikipedia.org/wiki/Pound_sterling

Unemployment in England

There has recently been a rapid decline in the unemployment rate for the United Kingdom during the last quarter this year.  About 88,000 people are now employed that were previously unemployed.  It has not fallen this sharply since the first quarter of 2000.

Most of the new jobs have been created in the private sector, as the public sector (government) begins to cut jobs and reign-in spending.  Almost 90% of the unemployment rate decline can be attributed to young adults (16-24 years old), bringing their numbers down to a two-year low.

In addition, the number of people claiming Jobseeker's Allowance (JSA) has risen by 19,600 people during the same quarter; this is the highest amount of new claimants in over a year.  Interestingly, the majority of the new JSA claimants have been men (11,500 of them).

So, breaking it down, the current available jobs are being filled at a quick pace, and more people are applying for benefits.  It would stand to reason, then that the job market is "drying up" and more people are looking for work than there is available.  However, recently there have been changes in the benefits and qualifications for Jobseeker's Allowance, so it is unlikely that the two (decrease in unemployment and increase in JSA Enrollment) are as related as they might seem.

Word Count: 218

Works Cited:

http://www.independent.co.uk/news/uk/home-news/uk-unemployment-total-falls-by-88000-2297636.html

http://www.bbc.co.uk/news/10604117

http://www.newcastle.gov.uk/core.nsf/a/wr_bench2011

Week 3: The 2% Goal

Inflation, the sustained rise in the average level of prices, is a natural and necessary part of every economy (Boyes and Melvin).  The amount of money in circulation within an economy has a direct relationship to the inflation rate.  Too much money in circulation results in a higher inflation rate, and too little results in a lower one.  It stands to reason, then, that there is a level of inflation that is the most conducive towards promoting a healthy economy.  England has decided a 2% inflation rate is ideal to keep the supply of money on par with the growth in the economy.

There are a couple of tools that the Bank of England uses to help steer their economy towards a 2% rate of inflation.  The first step the Bank takes is to raise or lower interest rates.  If inflation is expected to be higher than 2%, interest rates will be raised.  This in turn makes borrowing less attractive, saving more attractive, and lowers the amount of money in circulation.  Eventually, this will lower the level of inflation.  The opposite is done if inflation is not expected to reach the 2% target.

The second tool used by the Bank of England is used when the interest rate cannot be lowered any more.  Since the goal of a lower interest rate is to promote borrowing and spending, and make saving less attractive, the Bank can inject money directly into the economy; this is called Quantitative Easement (Quantitative Easing Explained).  No new bank notes are printed in the Quantitative Easement process; the Bank simply buys stocks and government bonds and puts cash directly into the economy.

Through monitoring and constant fluctuation, the Bank of England uses the interest rate and quantitative easement to push England’s economy towards a 2% rate of inflation annually.

Word Count: 299

Works Cited:

Boyes, William, and Michael Melvin. Macroeconomics. 7. Canada: SouthWestern Cenage Learning, 2008. eBook.

England. Quantitative Easing Explained.

"Bank of England." The Bank of England, n.d. Web. 8 Jun 2011. <http://www.bankofengland.co.uk/monetarypolicy/framework.htm>