The United Kingdom, a leading trading power and financial centre, is the fourth largest economy in the world, is one of the four largest economies of Western Europe, and a member of the European Union.
Since the 1980s, and particularly under the Government of Margaret Thatcher, many state enterprises that were nationalised in the 1940s have been privatised.
GDP growth slipped in 2001–2002 as the global downturn, the high value of the Pound Sterling, and the bursting of the "new economy" bubble hurt manufacturing and exports. However the UK economy is one of the strongest in Europe; inflation, interest rates, and unemployment remain low.
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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.
Due to North Sea oil, during the 1990s the UK became a net hyrocarbon exporter, and the second largest producer of oil in western Europe after Norway. In June 2004 hydrocarbon exports fell below imports for the first time, although they are not expected to do so permanantly for some years.
Around 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 8th 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.
Due to the island location of the UK, the country has great potential for generating electricity from wave power and tidal power, although these have not yet been exploited on a commercial basis.
Service industries, particularly banking, insurance, and business services, account by far for the largest proportion of GDP and employ around 70% of the working population.
Manufacturing continues to decline in importance.
Tourism is the 6th largest industry in the UK, contributing 76 billion pounds to the economy. It employs 1,800,000 full-time equivalent people — 6.1% of the working population (2002 figures) [1] (http://www.visitbritain.com/).
Agriculture is intensive, highly mechanised, and efficient by European standards, producing about 60% of food needs with only 1% of the labour force. It contributes around 2% of GDP. Around two thirds of production is devoted to livestock, one third to arable crops.
The Labour government has increased funding of education, transport, and the National Health Service, at a cost in higher taxes. The government has been criticised by the Conservatives and Liberal Democrats for its stealth tax raises.
The relatively good economic performance has complicated the Blair government's efforts to make a case for Britain to leave the Pound Sterling and join the Euro. The British Prime Minister has pledged to hold a public referendum if membership meets Chancellor of the Exchequer Gordon Brown's "five economic tests". The tests are:
When assessing the tests, Gordon Brown concluded that while the decision was close, the United Kingdom should not yet join the Euro. In particular, he cited fluctuations in house prices as a barrier to immediate entry. The tests will be reassessed in the future. Public opinion polls show that a majority of Britons are currently opposed to the single currency.
| GDP (PPP) | $1.53 trillion (2002 est.) |
| GDP growth rate (real terms) | 1.4% (2003 est.) |
| GDP per capita (PPP) | purchasing power parity - $25,500 (2002 est.) |
| GDP composition agriculture industry services | (1998) 1.7% 25.3% 73% |
| Population below poverty line | 17% |
| Income distribution lowest 10% highest 10% | (1986) 2.4% 24.7% |
| Consumer prices inflation | RPI: 3% (2004), CPI: 1.6% (2004) |
| Labour force | 28.3 million (2004) |
| Labour force composition services government manufacturing/construction energy agriculture | (2004) 46% 28% 24% 1% 1% |
| Unemployment rate | 4.8% (2004) |
| Budget revenues expenditures capital expenditures: | (FY98/99) $541 billion $507.5 billion $35.1 billion |
| Industries | production machinery including 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, and other consumer goods |
| Industrial growth | -0.3% (1999) |
| Electricity production | 343,099 GWh (1998) |
| Electricity production composition fossil fuel hydro nuclear other | (1998) 68.24% 1.49% 28.48% 1.79% |
| Electricity consumption | 331,565 GWh (2003) |
| Electricity exports | 200 GWh (1998) |
| Electricity imports | 2,160 GWh (2003) |
| Agriculture products | cereals, oilseed, potatoes, vegetables; cattle, sheep, poultry; fish |
| Exports | $271 billion (f.o.b., 1998) |
| Exported commodities | manufactured goods, fuels, chemicals; food, beverages, tobacco |
| Export partners | EU 58% (Germany 12%, France 10%, Netherlands 8%), US 13% (1998) |
| Imports | $305.9 billion (f.o.b., 1998) |
| Imported commodities | manufactured goods, machinery, fuels; foodstuffs |
| Import partners | EU 53% (Germany 13%, France 9%, Netherlands 7%, Italy 5%), US 14% (1998) |
| External debt | unknown |
| Donated economic aid | ODA, $3.4 billion (1997) |
| Currency | 1 British pound (£) = 100 pence (p) |
| Exchange rates | |
| £ per US$1 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 | 0.5495 (August 2004) 0.5601 0.6208 0.6872 0.6699 0.6182 0.6087 0.6071 0.5841 0.6464 0.6396 |
| £ per EU€1 2004 2003 2002 2001 2000 1999 | 0.6597 (August 2004) 0.7048 0.6523 0.6128 0.6311 0.6248 0.7038 |
| Fiscal year | April 1 – March 31 |