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United Kingdom: Economy#

The UK, a leading trading power and financial center, is the third largest economy in Europe after Germany and France. 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; the UK has been a net importer of energy since 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.

In 2008, 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. Facing burgeoning public deficits and debt levels, in 2010 the CAMERON-led coalition government (between Conservatives and Liberal Democrats) initiated an austerity program, which has continued under the new Conservative majority government. However, the deficit still remains one of the highest in the G7, standing at 5.1% of GDP as of mid-2015. London intends to eliminate its deficit by 2020, primarily through additional cuts to public spending and welfare benefits. It has also pledged to lower its corporation tax from 20% to 18% by 2020.

In 2012, weak consumer spending and subdued business investment weighed on the economy, however, GDP grew 1.7% in 2013 and 2.8% in 2014, accelerating because of greater consumer spending and a recovering housing market. As of late 2015, the Bank of England is examining when to begin raising interest rates from historically low levels while being cautious not to damage economic growth. While the UK is one of the fastest growing economies in the G7, economists are concerned about the potential negative impact if the UK votes to leave the EU. The UK has an extensive trade relationship with other EU members through its access to the single market and economic observers have warned an exit could jeopardize its position as the central location for European financial services.

Economic Facts#

GDP (purchasing power parity)$2.788 trillion (2016 est.)
$2.737 trillion (2015 est.)
$2.677 trillion (2014 est.)
note: data are in 2016 dollars
GDP (official exchange rate)$2.65 trillion (2015 est.)
GDP - real growth rate1.8% (2016 est.)
2.2% (2015 est.)
3.1% (2014 est.)
GDP - per capita (PPP)$42,500 (2016 est.)
$42,000 (2015 est.)
$41,400 (2014 est.)
note: data are in 2016 dollars
Gross national saving11.4% of GDP (2016 est.)
11.9% of GDP (2015 est.)
12.7% of GDP (2014 est.)
GDP - composition, by end usehousehold consumption: 65.8%
government consumption: 19.5%
investment in fixed capital: 17.4%
investment in inventories: 0.1%
exports of goods and services: 28.8%
imports of goods and services: -31.6% (2016 est.)
GDP - composition, by sector of originagriculture: 0.6%
industry: 19.2%
services: 80.2% ++ (2016 est.)
Agriculture - productscereals, oilseed, potatoes, vegetables; cattle, sheep, poultry; fish
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, t
Industrial production growth rate0.3% (2016 est.)
Labor force33.17 million (2016 est.)
Labor force - by occupationagriculture: 1.3%
industry: 15.2%
services: 83.5% (2014 est.)
Unemployment rate5.1% (2016 est.)
5.4% (2015 est.)
Population below poverty line15% (2013 est.)
Household income or consumption by percentage sharelowest 10%: 1.7%
highest 10%: 31.1% (2012)
Distribution of family income - Gini index32.4 (2012)
33.4 (2010)
Budgetrevenues: $996.3 billion
expenditures: $1.097 trillion (2016 est.)
Taxes and other revenues37.6% of GDP (2016 est.)
Budget surplus (+) or deficit (-)-3.8% of GDP (2016 est.)
Public debt92.2% of GDP (2016 est.)
89% of GDP (2015 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 in
Fiscal year6 April - 5 April
Inflation rate (consumer prices)0.5% (2016 est.)
0% (2015 est.)
Central bank discount rate0.5% (31 December 2014)
0.5% (31 December 2013)
Commercial bank prime lending rate4.6% (31 December 2016 est.)
4.51% (31 December 2015 est.)
Stock of narrow money$95.88 billion (31 December 2016 est.)
$106.7 billion (31 December 2015 est.)
Stock of broad money$2.669 trillion (31 December 2014 est.)
$3.491 trillion (31 December 2013 est.)
Stock of domestic credit$2.704 trillion (31 December 2016 est.)
$3.195 trillion (31 December 2015 est.)
Market value of publicly traded shares$3.019 trillion (31 December 2012 est.)
$2.903 trillion (31 December 2011 est.)
$3.107 trillion (31 December 2010 est.)
Current account balance-$157.3 billion (2016 est.)
-$153.3 billion (2015 est.)
Exports$412.1 billion (2016 est.)
$436.2 billion (2015 est.)
Exports - commoditiesmanufactured goods, fuels, chemicals; food, beverages, tobacco
Exports - partnersUS 14.6%, Germany 10.1%, Switzerland 7%, China 6%, France 5.9%, Netherlands 5.8%, Ireland 5.5% (2015)
Imports$581.6 billion (2016 est.)
$627.7 billion (2015 est.)
Imports - commoditiesmanufactured goods, machinery, fuels; foodstuffs
Imports - partnersGermany 14.8%, China 9.8%, US 9.2%, Netherlands 7.5%, France 5.8%, Belgium 5% (2015)
Reserves of foreign exchange and gold$129.6 billion (31 December 2015 est.)
$107.7 billion (31 December 2014 est.)
Debt - external$8.126 trillion (31 March 2016 est.)
$8.642 trillion (31 March 2015 est.)
Stock of direct foreign investment - at home$2.069 trillion (31 December 2016 est.)
$2.04 trillion (31 December 2015 est.)
Stock of direct foreign investment - abroad$1.975 trillion (31 December 2016 est.)
$1.959 trillion (31 December 2015 est.)
Exchange ratesBritish pounds (GBP) per US dollar -
0.7391 (2016 est.)
0.6542 (2015 est.)
0.607 (2014 est.)
0.6391 (2013 est.)
0.6324 (2012 est.)