United Kingdom: Economy#

The UK, a leading trading power and financial center, is the third largest economy in Europe after Germany and France. Over the past two decades, the government has greatly reduced public ownership. Agriculture is intensive, highly mechanized, and efficient by European standards, producing about 60% of food needs with less than 2% of the labor force. The UK has large coal, natural gas, and oil resources, but its oil and natural gas reserves are declining and the UK became a net importer of energy in 2005. Services, particularly banking, insurance, and business services, are key drivers of British GDP growth. Manufacturing, meanwhile, has declined in importance but still accounts for about 10% of economic output. After emerging from recession in 1992, Britain's economy enjoyed the longest period of expansion on record during which time growth outpaced most of Western Europe. In 2008, however, the global financial crisis hit the economy particularly hard, due to the importance of its financial sector. Falling home prices, high consumer debt, and the global economic slowdown compounded Britain's economic problems, pushing the economy into recession in the latter half of 2008 and prompting the then BROWN (Labour) government to implement a number of measures to stimulate the economy and stabilize the financial markets; these included nationalizing parts of the banking system, temporarily cutting taxes, suspending public sector borrowing rules, and moving forward public spending on capital projects. Facing burgeoning public deficits and debt levels, in 2010 the CAMERON-led coalition government (between Conservatives and Liberal Democrats) initiated a five-year austerity program, which aimed to lower London's budget deficit from about 11% of GDP in 2010 to nearly 1% by 2015. In November 2011, Chancellor of the Exchequer George OSBORNE announced additional austerity measures through 2017 largely due to the euro-zone debt crisis. The CAMERON government raised the value added tax from 17.5% to 20% in 2011. It has pledged to reduce the corporation tax rate to 21% by 2014. The Bank of England (BoE) implemented an asset purchase program of £375 billion (approximately $605 billion) as of December 2013. During times of economic crisis, the BoE coordinates interest rate moves with the European Central Bank, but Britain remains outside the European Economic and Monetary Union (EMU). In 2012, weak consumer spending and subdued business investment weighed on the economy, however, in 2013 GDP grew 1.4%, accelerating unexpectedly in the second half of the year because of greater consumer spending and a recovering housing market. The budget deficit is falling but remains high at nearly 7% and public debt has continued to increase.

Economic Facts#

GDP (purchasing power parity)$2.387 trillion (2013 est.)
$2.343 trillion (2012 est.)
$2.341 trillion (2011 est.)
note: data are in 2013 US dollars
GDP - real growth rate1.8% (2013 est.)
0.1% (2012 est.)
0.9% (2011 est.)
GDP - per capita (PPP)$37,300 (2013 est.)
$37,100 (2012 est.)
$37,300 (2011 est.)
note: data are in 2013 US dollars
GDP - composition, by sector of originagriculture: 0.7%
industry: 20.5%
services: 78.9% (2013 est.)
Population below poverty line16.2% (2011 est.)
Household income or consumption by percentage sharelowest 10%: 1.7%
highest 10%: 31.1% (2012)
Labor force - by occupationagriculture: 1.4%
industry: 18.2%
services: 80.4% (2006 est.)
Exports - commoditiesmanufactured goods, fuels, chemicals; food, beverages, tobacco
Exports - partnersGermany 11.3%, US 10.5%, Netherlands 8.8%, France 7.4%, Ireland 6.2%, Belgium 5.1% (2012)
Agriculture - productscereals, oilseed, potatoes, vegetables; cattle, sheep, poultry; fish
Budgetrevenues: $1.023 trillion
expenditures: $1.112 trillion (2013 est.)
Imports - commoditiesmanufactured goods, machinery, fuels; foodstuffs
Imports - partnersGermany 12.6%, China 8%, Netherlands 7.5%, US 6.7%, France 5.4%, Belgium 4.4%, Norway 4% (2012)
Exchange ratesBritish pounds (GBP) per US dollar -
0.6391 (2013 est.)
0.6307 (2012 est.)
0.6472 (2010 est.)
0.6175 (2009)
0.5302 (2008)
Exports$813.2 billion (2013 est.)
$801.7 billion (2012 est.)
Debt - external$9.577 trillion (31 December 2013 est.)
$9.457 trillion (31 December 2012 est.)
Fiscal year6 April - 5 April
Imports$782.5 billion (2013 est.)
$777.6 billion (2012 est.)
Industrial production growth rate-0.3% (2013 est.)
Industriesmachine tools, electric power equipment, automation equipment, railroad equipment, shipbuilding, aircraft, motor vehicles and parts, electronics and communications equipment, metals, chemicals, coal, petroleum, paper and paper products, food processing, textiles, clothing, other consumer goods
Inflation rate (consumer prices)2% (2013 est.)
2.7% (2012 est.)
Labor force30.15 million (2013 est.)
Unemployment rate7.2% (2013 est.)
7.8% (2012 est.)
Distribution of family income - Gini index32.3 (2012)
34 (2005)
Public debt91.1% of GDP (2013 est.)
88.7% of GDP (2012 est.)
note: data cover general government debt, and include debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities, as well as intra-governmental debt; intra-governmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are not sold at public auctions
Current account balance-$93.6 billion (2013 est.)
-$93.6 billion (2012 est.)
Reserves of foreign exchange and gold$87.48 billion (31 December 2013 est.)
$105.1 billion (31 December 2012 est.)
GDP (official exchange rate)$2.49 trillion (2013 est.)
Stock of direct foreign investment - at home$1.557 trillion (31 December 2013 est.)
$1.321 trillion (31 December 2012 est.)
Stock of direct foreign investment - abroad$1.884 trillion (31 December 2013 est.)
$1.81 trillion (31 December 2012 est.)
Market value of publicly traded shares$3.019 trillion
$2.903 trillion (31 December 2011)
$3.107 trillion (31 December 2010 est.)
Central bank discount rate0.5% (31 December 2013 est.)
0.5% (2012 est.)
Commercial bank prime lending rate4.4% (31 December 2013 est.)
4.22% (31 December 2012 est.)
Stock of domestic credit$3.636 trillion (31 December 2013 est.)
$3.756 trillion (31 December 2012 est.)
Stock of narrow money$111.6 billion (28 February 2014 est.)
$101.8 billion (31 December 2012 est.)
Stock of broad money$2.881 trillion (28 February 2014 est.)
$3.401 trillion (31 December 2012 est.)
Taxes and other revenues41.1% of GDP (2013 est.)
Budget surplus (+) or deficit (-)-3.6% of GDP (2013 est.)
GDP - composition, by end usehousehold consumption: 66.5%
government consumption: 21.4%
investment in fixed capital: 13.8%
investment in inventories: 0.4%
exports of goods and services: 31.1%
imports of goods and services: -33.2%
(2013 est.)
Gross national saving10.5% of GDP (2013 est.)
11% of GDP (2012 est.)
13.7% of GDP (2011 est.)