THE ECONOMY OF

UNITED KINGDOM

By: Batool Mehdi

The United Kingdom is the sixth largest economy in the world by nominal GDPThe sixth largest by purchasing power parity The United Kingdom is the second largest financial economy in the World

About United Kingdom Currency: Pound sterling (GBP) Trade organizations: 1. European union2. Berkshire County Network/ 3. Organization for Economic Co-operation

and Development4. World Trade organization/ Population: 64,105,654, ranked 22nd

Labour force (by occupation):1. agriculture: 1.4%; 2. industry: 8%; 3. services: 90.6% Unemployment: 8.4% Average net salary: €2,749 / $3,712,

monthly

Main industries of UK1. Aerospace2. Automotive3. Business and professional services4. Chemicals5. Construction6. Consumer goods7. Defense equipment8. Education9. Electronics10. Energy and utilities

GDP: $2.634 trillion (PPP, 2014) $2.902 trillion (Nominal, 2014)

GDP growth:  +0.9% Q2 2014 GDP per capita: $41,092 ( PPP, 2014)

$45,273 ( Nominal, 2014) GDP by sector: Agriculture: 0.7%

Construction: 6.3% Production: 15.2% Services: 77.8% (2013 est.)

Inflation (CPI): 1.2% (September 2014)

(RPI):  2.3% (September 2014)

Imports and Exports of UK Exports: $813.2 billion Main export partners: Germany 11.3%,

  United States 10.5%,  Netherlands 8.8%,  France 7.4%,  Ireland 6.2%,  Belgium 5.1% (2012) 

Imports: $782.5 billion Main import partners: Germany 12.6%,

  China 8%,  Netherlands 7.5%,  United States 6.7%,  France 5.4%,  Belgium 4.4% (2012)

History of the UK economy The period of time from the 1770s to the

1820s is known as the “industrial revolution”. The new industries proved to be far more

efficient in producing goods After 1840 Britain committed its economy to

free trade, with few barriers or tariffs. Foreign trade tripled in volume between

1870 and 1914 By the 1870s, financial houses in London had

achieved an unprecedented level of control over industry.

London became the world’s financial capital

The export of capital was a major base of the British economy 1880 to 1913.

This period was known as the "golden era" of international finance.

The Thatcher era This era brought a new approach

to the economic policy Which included,privatisation,

deregulation, reform of industrial relations, and tax changes.

Competition policy was emphasised

deindustrialisation and structural unemployment was accepted

The Government applied monetarist policies to reduce inflation

Major state-controlled firms were privatised

UK today The Bank of England is

the central bank, responsible for issuing currency

The currency of the UK is the pound sterling (£)

In recent years, the UK economy has been managed in accordance with principles of market liberalization and low taxation and regulation.

Since 1997, the Bank of England's Monetary Policy Committee, has been responsible for setting interest rates

In order to achieve the overall inflation target for the economy

In January 2009, UK was officially in recession

Unemployment rates also increased from 5.2% in May 2008 to 7.6% in May 2009.

Poverty in UK The poverty line in UK is commonly

defined as being 60% of the median household income

4.0 million children, 31% of the total, lived in households below the poverty line, after housing costs were taken into account.

The UK service sector It grown substantially and makes up about

73% of GDP. The service sector is dominated by

financial services, especially in banking and insurance.

London is the world's largest financial centre with : 1. London stock exchange

2. Lloyd's of London insurance 3.london international

financial futures and options exchange

Tourism in UK Tourism is very important to the UK

economy. With over 27 million tourists arriving in

2004 The United Kingdom is ranked as the sixth

major tourist destination in the world. London, is the most visited city in the

world with 15.6 million visitors in 2006

Resources in UK The UK has a small coal reserve along with

continuously declining natural gas and oil reserves.

Over 400 million tones of proven coal reserves have been identified in the UK.

In 2004, total UK coal consumption (including imports) was 61 million tones

Allowing the UK to be self sufficient in coal for just over 6.5 years

North Sea oil and gas have supplied much of the UK's energy needs in recent decades

However the country now increasingly depends on imported fossil fuels.

Entrepreneurship in UK Many multinational companies that are not

primarily UK-based have chosen to site their headquarters in London

An example is the US financial services firm Citigroup.

Rolls-Royce holds a major share of the global aerospace engines market.

The chemical and pharmaceutical industry is strong in the UK, with the world's second and sixth largest pharmaceutical firms; GlaxoSmithKline and AstraZeneca respectively

Manufacturing remains a significant part of the economy

However it only accounts for one sixth of the national output in 2003

The British motor industry is a significant part of this sector

Civil and defense aircraft production is led by the second largest defense contractor in the world

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