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In the years that followed the Great Depression, there was a likely risk of the UK economy falling in recession. In attempts to alleviate this risk, the government opted for a policy that required authorities to spend heavily while cutting the taxes that the consumers paid. This strategy was coupled with training professionals to obtain all the necessary and relevant skills that facilitated the improvement in the economic performance. These attempts were meant to encourage the citizens to contribute to the economic recovery as the government endeavored to foster growth in the money supply. These stabilizing ideas and policies have substantially evolved over time, resulting into improved living standards among the citizens. Nevertheless, the souring interest rates coupled with high unemployment and inflation rates resulted in the government opting to drop several fiscal policies that controlled the pace of the economy. In their place, a series of occasional credit tightening maneuvers were designed to tackle the inflation. This notwithstanding, the government still sustained a high trade deficit as compared to some industrialized nations. The economic challenge has persisted, and by 2006, the saving rates had gone below the 1933 level (Grant 2005, 12-15).
This and other difficulties culminated into the 2008 crisis which was largely blamed on the decline in dollar value as well as highly speculative subprime mortgages in and financial malpractices in the UK and the rest of Europe. The crisis led to the 2008/09 declaration of recession, following an extended period of low production and employment figures. It is for this reason that the acquisition of skills is viewed as an important factor to the performance of the UK economy. In this regard, this paper addresses the benefits of the acquisition of skills in the economic performance. Moreover, it also addresses the issue of bankers’ bonuses in the light of the principle-agent theory.