Britain: Frugal Under The New Economic Policy

In 2010, it was hard to get from Recession Britain, struggling in the quagmire, is also carrying the heaviest public debt burden since World War II. The whole of Britain, to the government royal family, to the dealer, the biggest feeling is two words: lack of money.

Heavy debt leads to regime change.

Britain's fiscal deficit reached 154 billion 700 million pounds in the 2009 to 2010 fiscal year, equivalent to 11% of GDP. European Union The prescribed 3% ceiling. It can be said that it is a high debt that has dragged down the Labour government for 13 years.

Thanks to the lesson from the past, the coalition government of the Conservative Party and the Liberal Democratic Party took the main direction of economic policy in the struggle against the deficit after taking office in May. After careful planning, George Osborne, the chancellor of the exchequer, announced in October the details of the government's budget cut of 83 billion pounds in the next few years. The plan is called the most stringent austerity policy launched by the British government after World War II.

According to the plan, the budget of the British police will be reduced by 4% in the next four years, the defense budget will be reduced by 8%, the Ministry of justice's annual expenditure will be reduced by 6%, and the diplomatic budget will be reduced by 24%. In addition to the sharp cuts in government departments' spending, the royal family's expenditure will also be greatly reduced. In addition, social welfare spending has been cut by 7 billion. The retirement age of the British will rise to 66 by 2020, thereby saving 5 billion pounds per annuities.

From the students sitting in the classroom, to the policemen patrolling the streets, the children from cradles to the pensionable old people, all of Britain is affected by the austerity plan.

　　 consumer market Total atrophy

The consumer market is also bleak. The real estate market is the first to be affected. Data released by Nationwide, the UK's authoritative house price watchdog, showed that house prices continued to fall from July this year. For consumers whose wallet is shrunken, low housing prices can hardly arouse their desire to buy. Let's not talk about buying a house. People's spending on decorating and gardening has also been reduced by 1%.

In order to save money, the British, who had been eating out of the restaurant because of poor cooking skills, had to go into the kitchen more. According to a survey, 64% of British wage earners bring their own lunch with an unprecedented proportion. Every day after work, 32 friends in the street pub came to a glass of whiskey or black beer, which is the most popular way of leisure for the British. It is predicted that although the sales volume of beer during the world cup in South Africa has increased a lot, the consumption of alcohol in the UK is still down 1.4% this year.

Compared to housing and catering, the impact of the clothing industry is not large at the moment. But the price of commodities has skyrocketed in the international market recently, and the prices of raw materials such as cotton have also soared, which means rising costs for clothing and other consumer goods.

In addition, the British government, which is struggling financially, will increase the consumption tax by 2.5 percentage points in January next year. In order to transfer costs, Next, one of the largest clothing retailers in Britain, has announced that it will raise its price by 5% to 8% in the first quarter of next year.

Enterprise Nuggets turn overseas

Angela Arendt, chief executive of luxury brand Burberry, has not made a clear statement about the intention of clothing retailers to increase their prices. In the headquarters building on the river Thames in London, Ahrendt was in high spirits. The tall, blonde woman is like "fashion devil," with black suits and narrow side glasses. Although the end of the year is coming, her face is not serious and critical, and smiles are hanging from the corners of her eyes. Because Burberry's recent achievements are enough to make this business and fashion woman strong.

In the last half of the fiscal year, Burberry's famous luxury brand profit rose by 49% compared to the previous year, and its pre tax profit amounted to 129 million.

　　 Ahrendt Of course, the good momentum of the group is mainly due to the rapid growth of sales in emerging market countries such as China and Brazil, but not much in relation to the British market in which the headquarters are located, even though it is the most characteristic brand in the UK. For some British companies such as Burberry, even though the British economy will continue to be as miserable as London's winter in the future, they have already dug up sunny gold mines such as the Chinese market.