United Kingdom: Economy Overview

16 November 2009
by Ina Dimireva -- last modified 17 November 2010

The UK, a leading trading power and financial center, is one of the quintet of trillion dollar economies of Western Europe.

Economy Overview

Over the past two decades, the government has greatly reduced public ownership and contained the growth of social welfare programs. 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, account by far for the largest proportion of GDP while industry continues to decline in importance. Since 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. Sharply declining 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 BROWN government to implement a number of measures to stimulate the economy and stabilize the financial markets; these include nationalizing parts of the banking system, cutting taxes, suspending public sector borrowing rules, and moving forward public spending on capital projects. Public finances, weak before the economic slowdown, deteriorated markedly during 2009, as did employment. The Bank of England periodically coordinates interest rate moves with the European Central Bank, but Britain remains outside the European Economic and Monetary Union (EMU).

GDP (purchasing power parity):

$2.128 trillion (2009 est.)
country comparison to the world: 7
$2.238 trillion (2008 est.)
$2.24 trillion (2007 est.)
note: data are in 2009 US dollars

GDP (official exchange rate):

$2.184 trillion (2009 est.)

GDP - real growth rate:

-4.9% (2009 est.)
country comparison to the world: 189
-0.1% (2008 est.)
2.7% (2007 est.)

GDP - per capita (PPP):

$34,800 (2009 est.)
country comparison to the world: 36
$36,700 (2008 est.)
$36,900 (2007 est.)
note: data are in 2009 US dollars

GDP - composition by sector:

agriculture: 1.2%
industry: 23.8%
services: 75% (2009 est.)

Labor force:

31.37 million (2009 est.)
country comparison to the world: 18

Labor force - by occupation:

agriculture: 1.4%
industry: 18.2%
services: 80.4% (2006 est.)

Unemployment rate:

7.6% (2009 est.)
country comparison to the world: 75
5.6% (2008 est.)

Investment (gross fixed):

14.9% of GDP (2009 est.)
country comparison to the world: 136

Budget:

revenues: $880.8 billion
expenditures: $1.129 trillion (2009 est.)

Inflation rate (consumer prices):

2.2% (2009 est.)
country comparison to the world: 81
3.6% (2008 est.)

Commercial bank prime lending rate:

0.63% (31 December 2009)
country comparison to the world: 152
4.63% (31 December 2008)

Stock of domestic credit:

$5.151 trillion (31 December 2009)
country comparison to the world: 6
$4.436 trillion (31 December 2008)

Agriculture - products:

cereals, oilseed, potatoes, vegetables; cattle, sheep, poultry; fish

Industries:

machine 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

Industrial production growth rate:

-9.8% (2009 est.)
country comparison to the world: 140

Oil - production:

1.502 million bbl/day (2009 est.)
country comparison to the world: 20

Natural gas - production:

87.45 billion cu m (2009 est.)
country comparison to the world: 8

Current account balance:

-$32.68 billion (2009 est.)
country comparison to the world: 180
-$39.9 billion (2008 est.)

Exports:

$357.3 billion (2009 est.)
country comparison to the world: 10
$467.3 billion (2008 est.)

Exports - commodities:

manufactured goods, fuels, chemicals; food, beverages, tobacco

Exports - partners:

US 14.71%, Germany 11.06%, France 8%, Netherlands 7.79%, Ireland 6.89%, Belgium 4.65%, Spain 4% (2009)

Imports:

$486 billion (2009 est.)
country comparison to the world: 7
$641.3 billion (2008 est.)

Imports - commodities:

manufactured goods, machinery, fuels; foodstuffs

Imports - partners:

Germany 12.87%, US 9.74%, China 8.88%, Netherlands 6.94%, France 6.64%, Belgium 4.86%, Norway 4.84%, Ireland 4.01%, Italy 3.99% (2009)

Debt - external:

$9.088 trillion (30 June 2009)
country comparison to the world: 2
$9.041 trillion (31 December 2008)

Stock of direct foreign investment - at home:

$1.032 trillion (31 December 2009 est.)
country comparison to the world: 3
$986.4 billion (31 December 2008 est.)

Stock of direct foreign investment - abroad:

$1.586 trillion (31 December 2009 est.)
country comparison to the world: 3
$1.567 trillion (31 December 2008 est.)

Exchange rates:

Source: CIA - The World Factbook