Britain became the world's first industrialized nation in the 19th and early 20th centuries and was the world's greatest power. In the 21st century, Britain has considerable economic, cultural, military, scientific, technological, and political influence. One of the most developed countries, the United Kingdom, has frequently been appearing in the media recently. This work will introduce the economic situation in the United Kingdom.

First, it is necessary to focus on the inflation rate in the United Kingdom. In September, the consumer price index increased by more than 10 percent from approximately a year ago , and food prices rose by more than 15 percent. It showed the highest rate since April 1980, 42 years ago.It was so severe that a report said inflation cut the number of people's meals by half.

The reason for this has to go back to the past, with the United Kingdom leaving the European Union being the main reason. The United Kingdom was providing a significant contribution to the EU, but the EU had a financial crisis and had to withdraw from the EU by a referendum. The people of the United Kingdom believed it was better to put only British interests ahead of being a member of the EU, paying large contributions, and implementing common laws and policies.. In addition, there was a change in the pound's value according to the possibility of Brexit, and the pound's value depreciated after leaving the EU. The war between Russia and Ukraine also significantly impacted the British economy. As Britain opposed Russia and supported Ukraine, Russia cut off the natural gas supply, resulting in a surge in energy prices and a sharp rise in electricity and gas costs for ordinary households: an increase in the consumer price index. Moreover, energy prices skyrocketed due to the global coronavirus pandemic, subsequent inflation, and the Ukraine war. The pound depreciated further due to interest rate hikes and a strong dollar that started in the United States.


In such an economic situation, the British Prime Minister changed, and Leeds Truss took office in September 2022. She rose to the post of prime minister, dreaming of the 'second Margaret Thatcher. In her inaugural address, she said, "I am confident that together we can ride out the storm, rebuild our economy and become the modern, brilliant Britain that I know we can be." She was also the last prime minister to be appointed by Queen Elizabeth II; therefore, Queen Elizabeth paid attention to her.

Truss has made a great challenge to ease the burden on the people and has developed a policy. At the end of last month, Prime Minister Truss announced a massive tax cut without a specific fiscal outlook, saying it would drive economic growth. The surprise announcement threw the financial markets into chaos. The pound plummeted immediately after the policy announcement, and U.K. government bond yields soared. As a result, approval ratings for the ruling Conservative Party fell, leading to the resignation of high-ranking cabinet officials, and the arrows of accusation against Prime Minister Truss rained down worldwide. She then said she could not deliver what she had promised and resigned after 44 days as prime minister, making it the shortest tenure in British history. She announced that she would remain prime minister, until a new leader is elected.
The following election for the new Prime Minister will take place within the governing party and is due to be completed next week. King Charles III will invite the election winner to become the next prime minister.

The recent economic crisis regarding Liz Truss, the resigned Prime Minister, can also affect other countries. For instance, generally, the U.K. is at the top of the list of countries that invest in South Korea from abroad. However, Britain's economic confusion has forced the British to recoup their investments, which means that foreigners who play an essential role in the Korean stock market are leaving. Furthermore, as British government bonds, which were considered safe, fell, financial markets worldwide, including Korea, are shaking. In such ways, an economic crisis in one country can also significantly impact other countries.

Events inside and outside a number of countries significantly impact the economy. Moreover, the economies of developed countries are the center of the global economy. Their influence is so substantial that decisions about the country's economy must be made carefully.