TOPIC: ECONOMY OF THE UNITED KINGDOM

Part I: GENERAL INFORMATION

United Kingdom of Great Britain and Northern Ireland

Flag Coat of arms

Anthem: God Save the Queen

(1) The United Kingdom of Great Britain and Northern Ireland (usually shortened to the United Kingdom, the UK, or Britain) is a country and sovereign state that is situated in west Northern Europe. Its territory and population are primarily situated on the island of Great Britain and in Northern Ireland on the island of Ireland, with additional settlements on numerous smaller islands in the surrounding seas. The United Kingdom is bounded by the Atlantic Ocean, the North Sea, the English Channel, the Celtic Sea, and the Irish Sea. The mainland is linked to France by the Channel Tunnel.

(2) The United Kingdom is a political union made up of four constituent countries: England, Scotland, Wales, and Northern Ireland. The United Kingdom also has several overseas territories, including Bermuda, Gibraltar, Montserrat and Saint Helena among others. A constitutional monarchy, the United Kingdom has close relationships with fifteen Commonwealth Realms that share the same monarch — Queen Elizabeth II — as head of state.

(3) The United Kingdom is a member of the G8, and is a founding member of the North Atlantic Treaty Organisation (NATO) and the United Nations (UN), where it holds a permanent seat on the Security Council. The UK is also one of the world's major nuclear powers with its own nuclear weapons.

(4) After the end of the British Empire, the UK retains influence throughout the world because of the extensive use of the English language as well as through the world-spanning Commonwealth of Nations, headed by the Queen. A member of the G8, the United Kingdom is the third most populous state in the European Union with a population of 60.2 million.

Part II ECONOMY

(1) Great Britain is a highly developed country, one of the world's leading industrialized nations with the fifth largest economy in the world and the second largest economy in Europe (after Germany). The British economy is often described as an 'Anglo-Saxon economy'. It is made up of (in order of how much they contribute), the economies of England, Scotland, Wales and Northern Ireland.

(2) The British were the first in the world to enter the Industrial Revolution, and, like most industrialising countries at the time, initially concentrated on heavy industries such as shipbuilding, coal mining, steel production, and textiles. The empire created an overseas market for British products, allowing the United Kingdom to dominate international trade in the 19th century. However, as other nations industrialised and surplus labour from agriculture began to dry up, the United Kingdom started to lose its economic advantage. As a result, heavy industry declined throughout the 20th century.

(3) The service sector is the dominant sector of the UK economy, normally a sign of an advanced economy. Banking, insurance, business services, and other service industries have grown substantially, and now make up about 73% of GDP and employ almost 70% of the workforce.

(4) London, the capital, is, along with New York City, one of the two largest financial centres in the world and Europe's foremost financial city, with financial services based around two districts 'The City' (the City of London) and the Docklands (particularly around Canary Wharf). It also has the largest concentration of foreign bank branches in the world (over 500).

The City houses the London Stock Exchange (shares and bonds), Lloyds of London (insurance), and the Bank of England. The Docklands began development in the 1980s and is now home to the Financial Services Authority, as well as several important financial institutions (such as Barclays Bank, Citigroup and HSBC). The Scottish capital, Edinburgh also has one of the large financial centres of Europe.

(5) Tourism is very important to the British economy. It is the 6th largest industry in the UK, and employs 6.1% of the working population (2002 figures) .With over 27 million tourists a year, the United Kingdom is ranked as the sixth major tourist destination in the world.

(6) The British manufacturing sector has greatly diminished since World War II. However, it is still a significant part of the economy, but only accounted for 16% of national output in the UK and for 13% of employment .

Within the manufacturing sector, the largest industries include machine tools; electric power, automation, and railroad equipment; ships; motor vehicles and parts; aircraft; electronic and communications equipment; metals; chemicals; petroleum; coal; food processing; paper and printing; textiles; and clothing. Since the 1980s, and particularly under the Government of Margaret Thatcher, many state enterprises, which since the 1940s had been nationalised, were privatised.

The British motor industry is a significant part of this sector, although all large-volume producers are now foreign-owned. Civil and defence aircraft production is led by the United Kingdom's largest aerospace firm, BAE Systems, and the pan-European consortium known as Airbus. Rolls-Royce holds a major share of the global aerospace engines market. The chemical and pharmaceutical industry is also strong in the UK, with the world's second and third largest pharmaceutical firms (GlaxoSmithKline and AstraZeneca, respectively) being based in the UK.

Another important component of manufacturing sector is electronics, audio and optical equipment, manufacturing a wide range of TV, radio and communications products, scientific and optical instruments, electrical machinery and office machinery and computers.

(7) The Creative Industries including advertising, film and television production, product design, book and music publishing and the fine art and antiques markets have seen some of the largest growth in the UK economy in the last two decades. English as the international standard of film and television market supports the market for both product and talent.

(8) The United Kingdom's agriculture sector is small, but intensive, highly mechanised, and efficientby European standards. It contributes only 1.0 % of GDP, while producing about 60% of food needs with less than 2% of the labour force. About 25% of Britain's land is arable, and almost half is suitable for meadows and pastures. Around two thirds of production is devoted to livestock, one third to arable crops. The main crops that are grown are wheat, barley, oats, potatoes, sugar beets, fruits and vegetables. Beef cattle and large numbers of sheep, as well as poultry and pigs, are raised throughout much of the country. The widespread dairy industry produces milk, eggs, and cheese.

Agriculture is heavily subsidised by the European Union's Common Agricultural Policy and it is not known how large a sector it would be under free market rules .

(9) The UK is one of the world's leading fishing nations. Its fleets bring home fish of every kind, ranging from sole to herring.

(10) The UK has large coal, natural gas, and oil reserves; primary energy production accounts for 10% of GDP, one of the highest shares of any industrial nation. Production of oil from offshore wells in the North Sea began in 1975, and the country is self-sufficient in petroleum. Due to North Sea oil, the UK has become the second largest producer of oil in western Europe after Norway. Other mineral resources include iron ore, tin, limestone, salt, china clay, oil shale, gypsum, and lead.

(11) About 80% of UK electricity is currently generated from fossil fuels; nuclear power and an increasing contribution from wind turbines make up the bulk of the remainder. The UK is the world's 7th greatest producer of carbon emissions, producing around 2.3% of the total generated from fossil fuels. The government is a signatory to the Kyoto Protocol and has launched a Climate Change Programme to reduce emissions significantly beyond the Kyoto commitments.

(12) The currency of the UK is pound sterling, represented by the symbol £. The Bank of England is the central bank and is responsible for issuing currency, although banks in Scotland and Northern Ireland retain the right to issue their own notes. The UK chose not to join the Euro on the currency's launch, although the government has pledged to hold a public referendum for deciding membership.

(13) The country’s prosperity has always been dependent upon the export of manufactured goods in exchange for raw materials and foodstuffs. The country's chief exports are manufactured goods, machinery, fuels, chemicals, semifinished goods, and transport equipment, as well as beverages and tobacco.

The chief imports are now manufactured goods, machinery, semifinished and consumer goods, and foodstuffs (about 40% of its food suplies). Since the early 1970s, Great Britain's trade focus has shifted from the United States to the European Union, which now accounts for over 50% of its trade. Germany, the United States, France, and the Netherlands are the main trading partners.

(14)The British economy has in recent years seen the longest period of sustained economic growth for more than 150 years, and is one of the strongest European Union economies in terms of inflation, interest rates and unemployment, all of which remain relatively low. Two of the richest 10 areas in the European Union are in the United Kingdom. (Inner London is number 1 with a €66 761 GDP per capita.) However it has one of the highest levels of income inequality within the EU.

British GDP grew by by 2.2% in 2006 (1.8 % in 2005) and is expected to increase in subsequent years.

Part III Statistics

• Capital

London 51°30′N 0°7′W

• Official language(s)

English

• Government

Constitutional monarchy

 - Queen

HM Queen Elizabeth II

 - Prime Minister

The Rt Hon Tony Blair MP

• Area

-Total

244,820 km² (79th)/94,526 sq mi

 - Water (%)

1.34%

• Population

 - Total (2005 est.)

60,209,500 ⁶ (21st)

- Density : 243/km² (48th)

• Currency

Pound sterling (£) (GBP) = 100 pence (p)

• GDP

2005 estimate

 - Total

$1.869 trillion (6th)

 - Per capita ranking

$30,3 (18th)

 - By sector (2006)

Agriculture (1%), industry (26.5%), services (72.6%)

-GDP growth (2006)

2.2%

• Income distribution (2000)

lowest 10% 2.1% highest 10% 28.5%