| Economy of the United Kingdom |
| Currency | Pound sterling (GBP) |
| Fiscal year | 6th April - 5th April |
| Trade organisations | EU, BCN, OECD and WTO |
| Statistics |
| GDP | $2.674 trillion (2008 est. nom.) |
| GDP growth | 0.3% (Q4 2009) and 0.3%(Q1 2010) |
| GDP per capita | $43,785 (2008 est. nom.) (20th) |
| GDP by sector | agriculture (1%), industry (23%), services (76%) (2008 est.) |
| Inflation (CPI) | 5.7% (September 2009) |
Population
below poverty line | 14% with household income below 60% of UK median income (2006 est.) |
| Labour force | 31 million (includes unemployed) (2007 est.) |
Labour force
by occupation | Services (81%), industry (18%) and agriculture (1%) (excludes unemployed) (2007)[citation needed] |
| Unemployment | 7.8% (Q4 2009) |
| Main industries | machine tools, industrial equipment, scientific equipment, shipbuilding, aircraft, motor vehicles and parts, electronic machinery, computers, processed metals, chemical products, coal mining, oil production, paper, food processing, textiles, clothing and other consumer goods. |
| External |
| Exports | $442.2 billion (2007 est.) |
| Main export partners | USA 15%, Germany 11%, France 10%, Ireland 7%, Netherlands 6%, Belgium 6%, Spain 5%, Italy 4% (2007) |
| Imports | $621.4 billion (2007 est.) |
| Main import partners | Germany 14.2%, US 8.6%, China 7.3%, Netherlands 7.3%, France 6.9%, Belgium 4.7%, Norway 4.7%, Italy 4.2% (2007) |
| Public finances |
| Public debt | 51.8% of GDP (2008 est.) |
| Revenues | $1.056 trillion |
| Expenses | $1.214 trillion (2008 est.) |
| Economic aid | $8 billion (donor) |
|
The United Kingdom is a major developed capitalist economy. It is currently the world's sixth largest by nominal GDP[ and the sixth largest by purchasing power parity. It is the third largest economy in Europe after Germany's and France's in nominal terms, and the third largest after Germany's and Russia's in terms of purchasing power parity. Its GDP PPP per capita is the 18th highest in the world. The United Kingdom is also a member of the G7, G8, G-20 major economies, the Commonwealth of Nations, the Organisation for Economic Co-operation and Development, the World Trade Organisation, and the European Union.
The UK was the first country in the world to industrialize in the 18th and 19th centuries, and for much of the 19th century possessed a predominant role in the global economy. However, by the late 19th century, the Second Industrial Revolution in the United States and the German Empire meant the they had begun to challenge Britain's role as the leader of the global economy. The extensive war efforts of both World Wars in the 20th century and the dismantlement of the British Empire also weakened the UK economy in global terms, and by that time Britain had been superseded by the United States as the chief player in the global economy. At the start of the 21st century however, the UK still maintains an important role in the global economy, due to its large gross domestic product and the financial importance that its capital, London, possesses in the world.
The United Kingdom is one of the world's most globalised countries. The capital, London (see Economy of London), is a major financial centre for international business and commerce.The British economy is made up (in descending order of size) of the economies of England, Scotland, Wales and Northern Ireland. In 1973, the UK acceded to the European Economic Community which is now known as the European Union after the ratification of the Treaty of Maastricht in 1993. The UK entered it's worst reccession since World War 2 in 2009 but climbed it's way back into growth by Q4 of 2009.
| Contents - 1 Overview
- 2 Recent economic performance
- 3 Macroeconomic trend
- 4 Industries
- 4.1 Agriculture, hunting, forestry, and fishing
- 4.2 Production
- 4.2.1 Mining and quarrying
- 4.2.2 Manufacturing
- 4.2.3 Electricity, gas and water supply
- 4.2.4 Construction
- 4.3 Service industries
- 4.3.1 Wholesale and retail trade
- 4.3.2 Hotels and restaurants
- 4.3.3 Transport, storage and communication
- 4.3.4 Financial intermediation
- 4.3.5 Real estate and lettings
- 4.3.6 Public administration and defence
- 4.3.7 Education
- 4.3.8 Health and social work
- 4.3.9 Other social and personal services
- 5 Currency
- 6 National and regional variation
- 7 Taxation and borrowing
- 8 Exports
- 9 Poverty
- 10 See also
- 11 References
- 12 External links
|
Overview
Following the end of World War II, there was a long interval without a major recession (1945–1973) and a growth in prosperity in the 1950s and 1960s. According to the OECD, the annual rate of growth (percentage change) between 1960 and 1973 averaged 2.9%, although this figure was far behind the rates of other European countries such as France, West Germany and Italy.
However, following the severe shock of the 1973 oil crisis and the 1973–1974 stock market crash, the British economy had fallen into recession by the time Edward Heath's Conservative Party government had been ousted by the Labour Party as Harold Wilson moved into office for the second time. GDP had fallen by 1.1%, recording weaker growth than other European nations in the 1970s overall; even when the recession ended in 1975, the economy was still blighted by double-digit inflation and unemployment was rising.
However, the 1980s saw a strong reversal of fortunes for the British economy. A new period of neo-liberal economics began with the advent of the government of Margaret Thatcher who was elected in 1979. Most state-owned enterprises in the industrial and service sectors, which since the 1940s had been nationalised, were privatised. As a result, the British Government owned very few industries or businesses by the mid 1980s. GDP fell 5.9% at first then rose to 5% at its peak in 1988, according to the IMF, one of the highest rates of any European nations. as banks and other financial institutions in the UK enjoyed the liberalisation of the regulatory structures and greater freedom to explore new investment vehicles with less oversight. However, Mrs Thatcher's modernisation of the British economy was far from trouble free; her battle against inflation resulted in mass unemployment with the jobless count passing 3,000,000 by the start of 1982 and remaining above that level until the spring of 1987. This was largely due to the closure of many outdated factories and coalpits which were inefficient and no longer viable to keep open. Unemployment peaked at nearly 3,300,000 during 1984 but fell dramatically during the final three years of the decade, standing at just over 1,500,000 by the end of 1989.
Another severe recession hit the British economy at the start of the 1990s, beginning in the summer of 1990 and lasting until the end of 1992. This recession was a global one, brought on by the savings and loan crisis in the United States of America, which caused the economy to shrink by 8%, while unemployment increased from around 1,700,000 at the start of the recession to nearly 3,000,000 at the end of it. The recession ended at the turn of 1993 and subsequent economic recovery was extremely strong. Furthermore, unlike the previous recession, there was a practically instant and substantial fall in unemployment, though it was not enough to prevent the Tory government (led since November 1990 by John Major) from a landslide election defeat to Tony Blair's Labour in May 1997.
Blair was in power for 10 years and during his rule he saw 40 successive quarters of economic growth. In the second quarter of 2008, the economy finally endured a quarter of detraction. The previous 15 years had seen one of the highest economic growth rates of major developed economies during that time and certainly the strongest of any European nation.
GDP growth had briefly reached 4% in the early 1990s, gently declining thereafter. Peak growth was relatively anaemic compared to past rates of growth, such as the 6.5% peak in the early 1970s, although over-all growth was more sustained than earlier. Annual growth rates averaged 2.68% between 1992-2007 according to the IMF with the finance sector growth contributing a greater part than previously.
This boom ended in 2008 when the United Kingdom suddenly entered a recession brought about by the global financial crisis. Beginning with the collapse of Northern Rock, which was taken into public ownership in February 2008, other banks had to be partly nationalised. The Royal Bank of Scotland Group, which at its peak was the second largest bank in the UK and the fifth largest in the world by market capitalisation, was effectively nationalised on 13 October 2008, when the British Government announced it would take a stake of up to 58% in the Group. By mid 2009, the HM Treasury had a 70.33% controlling shareholding in RBS, and a 43% shareholding through UK Financial Investments Limited of Lloyds Banking Group, formerly the fifth largest banking group in the UK. This recession has seen unemployment rise substantially, from just over 1,600,000 in January 2008 to nearly 2,500,000 in October 2009 yet less so when comapared to countries such as Germany, France or Spain.
The UK economy had been one of the strongest EU economies in terms of inflation, interest rates and unemployment, all of which remained relatively low until the 2008-09 recession. Unemployment has since reached a peak of just under 2.5 million (7.8%), the highest level since early 1990s although this rate remains far lower than many other European nations. However, interest rates have been slashed to 0.5%. In 2007, according to the International Monetary Fund, the United Kingdom had the ninth highest level of GDP per capita in the European Union in terms of purchasing power parity, after Luxembourg, Ireland, the Netherlands, Austria, Denmark, Sweden, Belgium and Finland. However, in common with the economies of other English-speaking countries, it has higher levels of income inequality than many European countries. During August 2008 the IMF warned that the UK economic outlook had worsened due to a twin shock: financial turmoil as well as rising commodity prices. Both developments harm the UK more than most developed countries, as the UK obtains revenue from exporting financial services while recording deficits in finished goods and commodities, including food.
In 2007, the UK had the world's third largest current account deficit, despite significant oil revenues, according to the IMF. This was mainly the result of a large deficit in the trade in manufactured goods. During May 2008, the IMF advised the UK government to broaden the scope of fiscal policy to promote external balance. Although the UK's "labour productivity per person employed" has been progressing well over the last two decades and has overtaken productivity in the united Germany, it lags around 20% behind France's level, where workers have a 35-hour working week.The UK's "labour productivity per hour worked" is currently on a par with the average for the "old" EU (15 countries). The United Kingdom currently ranks 21st on the Human Development Index.
Recent economic performance
The UK entered a recession in Q2 of 2008, according to the UK Office of National Statistics (ONS) and exited it in Q4 of 2009. The revised ONS figures of November 2009 showed that the UK had suffered six consecutive quarters of negative growth. As of the end of November 2009, the economy had shrunk by 5.8%, making the 2008-2009 recession the longest since records began In December 2009, the Office of National Statistics revised figures for the third quarter of 2009 showed that the economy shrank by 0.2%, compared to a 0.6% fall the previous quarter.. In the 3 months to February 2010 the U.K. economy grew yet again by 0.3%
Though initially Britain lagged behind other major economies including Germany, France, Japan, and the US which all returned to growth in the second quarter of 2009, the country eventually returned to growth in the last quarter of 2009. On January 26, 2010, it was confirmed that the U.K. had left its recession, the last major economy in the world to do so
It has been suggested that the UK initially lagged behind its European neighbours because the UK entered the 2008 recession later. However, German GDP fell 4.7% year on year compared to the UK's 5.1%, and Germany has now posted a second quarterly gain in GDP. Commentators suggest that the UK suffered a slightly longer recession than other large European countries, as a result of government policy dating back to the policies of the Thatcher government of 1979, in which UK governments have moved away from supporting manufacturing and focused on the financial sector.The OECD predicts that the UK will grow 1.6% in 2010. The unemployment rate recorded by the Labour Force Survey fell in the fourth quarter of 2009 the first of the big 3 economies in the EU to do so.
Gross Domestic Product (GDP) decreased by a (second revision) figure of 0.2 per cent in the third quarter of 2009, after a decrease of 0.6 per cent in the second quarter, according to the Office for National Statistics (ONS). There was a 2.4% decline in the first quarter of 2009. The economy has now contracted 5.9% from its peak before the recession began, the BBC reports.
In October 2007, the International Monetary Fund (IMF) had forecast British GDP to grow by 3.1% in 2007 and 2.3% in 2008. However, GDP growth slowed to a fall of 0.1% in the April-June (second) quarter of 2008 (revised down from zero). In September 2008, the OECD forecast contraction for at least two quarters for the UK economy, possibly severe, placing its predicted performance last in the G7 of leading economies . Six quarters later the UK economy was still contracting, placing a question mark over OECD forecasting methods.
It has been argued that heavy government borrowing over the past cycle has led to a severe structural deficit, reminiscent of previous crises, which will inevitably exacerbate the situation and place the UK economy in an unfavourable position compared to its OECD partners as attempts are made to stimulate recovery, other OECD nations having allowed greater room for manoeuvre thanks to contrasting policies of relatively tighter fiscal control prior to the global downturn
In May 2009 the European Commission (EC) stated: "The UK economy is now clearly experiencing one of its worst recessions in recent history." The EC expected GDP to decline 3.8pc in 2009 and projected that growth will remain negative for the first three quarters of 2009. It predicted two quarters of "virtual stagnation" in late 2009-early 2010, followed by a gradual return to "slight positive growth by late 2010".
The FTSE 100 and FTSE 250 rose to their highest levels in a year on the 9th of September 2009 with the FTSE 100 breaking through 5,000 and the FTSE 250 breaking through 9,000. On the 8th of September the National Institute of Economic and Social Research believed that the economy had grown by 0.2% in the three months to August, but was proved wrong. In its eyes the UK recession was officially over, although it did warn that "normal economic conditions" had not returned. On the same day, figures also showed UK manufacturing output rising at its fastest rate in 18 months in July.. On the 15th of September 2009 the EU incorrectly predicted the UK is expected to grow by 0.2% between July and September, on the same day the governor of the Bank of England, Mervyn King said the UK GDP is now growing.. Unemployment has recently fallen in Wales.
Many commentators in the UK were certain that the UK would leave recession officially in Q3, believing that all the signs showed that growth was extremely likely, although in fact government spending had been insufficient to rescue the economy from recession at that point. Figures in fact showed no growth in retail sales in September 2009, and a 2.5% decline in industrial output in August. The revised UK figures confirmed that economy shrunk in Q3 of 2009 by 0.2%, although government spending on cash for the car scrappage scheme helped. This was followed by a 0.3% growth in the Q4. UK manufacturers' body, the EEF, appealed for more cash from the government: "Without an extension of support for business investment in the pre-Budget statement next month, it will be difficult to see where the momentum for growth will come from."
Macroeconomic trend
This is a chart of trend of gross domestic product of United Kingdom at market prices by the International Monetary Fund with figures in millions of pounds sterling.
| Year | Gross domestic product | US dollar exchange | Inflation index
(2000=100) | Per Capita Income
(as % of USA) |
| 1925 | 4,466 | £0.21 |
| 61.79 |
| 1930 | 4,572 | £0.21 |
| 66.08 |
| 1935 | 4,676 | £0.20 |
| 85.67 |
| 1940 | 7,117 | £0.26 |
| 74.28 |
| 1945 | 9,816 | £0.25 |
| 50.93 |
| 1950 | 13,162 | £0.36 |
| 38.26 |
| 1955 | 19,264 | £0.36 |
| 42.54 |
| 1960 | 25,678 | £0.36 |
| 47.86 |
| 1965 | 35,781 | £0.36 |
| 49.96 |
| 1970 | 51,515 | £0.42 |
| 44.04 |
| 1975 | 105,773 | £0.45 |
| 55.54 |
| 1980 | 230,695 | £0.42 | 43 | 78.57 |
| 1985 | 354,952 | £0.77 | 60 | 46.84 |
| 1990 | 557,300 | £0.56 | 76 | 76.62 |
| 1995 | 718,383 | £0.63 | 92 | 71.84 |
| 2000 | 953,576 | £0.65 | 100 | 72.29 |
| 2005 | 1,209,334 | £0.54 | 107 | 90.17 |
For purchasing power parity comparisons, the US Dollar is exchanged at £0. Industries
Agriculture, hunting, forestry, and fishing
Agriculture is intensive, highly mechanised, and efficient by European standards, producing about 60% of food needs with less than 2% of the labour force (477,000 out of a total workforce of 31,598,000, 3rd quarter of 2007) .[citation needed] It contributes around 2% of GDP.[citation needed] Around two-thirds of the production is devoted to livestock, one-third to arable crops.[citation needed] The main crops that are grown are wheat, barley, oats, oilseed rape, maize for animal feeds, potatoes and sugar beet. New crops are also emerging, such as linseed for oil and hemp for fibre productio Agriculture is subsidised by the European Union's Common Agricultural Policy.
The UK retains a significant, although vastly reduced, fishing industry. Its fleets, based in towns such as Kingston upon Hull, Grimsby, Fleetwood, Great Yarmouth, Peterhead, Fraserburgh, and Lowestoft, bring home fish ranging from sole to herring.
The Blue Book 2006 (page 110) reports that the "Agriculture hunting, forestry and fishing" added gross value of £10,323 million (at 2006 prices) to the UK economy in 2004.
Production
Mining and quarrying
The Blue Book 2006 reports that this sector added gross value of £21,876 million to the UK economy in 2004.
Manufacturing
Main article: Manufacturing in the United Kingdom
In 2003, manufacturing industry accounted for 16% of national output in the UK and for 13% of employment. This is a continuation of the steady decline in the importance of this sector to the British economy since the 1960s, although the sector is still important for overseas trade, accounting for 83% of exports in 2003. Manufacturing is an important sector of the modern British economy and there is a considerable amount of published research on the subject of the factors affecting its growth and performance
Electricity, gas and water supply
The Blue Book 2006 reports that this sector added gross value of £17,103 million to the UK economy in 2004. The United Kingdom is expected to launch the building of new nuclear reactors to replace existing generators and to boost UK's energy reserves
Construction
The Blue Book 2006 reports that this industry added gross value of £64,747 million to the UK economy in 2004
The service sector is the dominant sector of the UK economy, a feature normally associated with the economy of a developed country. This means that the Tertiary sector jobs outnumber the Secondary and Primary sector jobs.
Wholesale and retail trade
This sector includes the motor trade, auto repairs, personal and household goods industries. The Blue Book 2006 reports that this sector added gross value of £127,520 million to the UK economy in
Hotels and restaurants
The Blue Book 2006 reports that this industry added gross value of £33,074 million to the UK economy in 2004.
Transport, storage and communication
The Blue Book 2006 reports that the transport and storage industry added gross value of £49,516 million to the UK economy in 2004 while the communication industry added a gross value of £29,762 million.
Financial intermediation
London is the world's largest financial centre,with financial services based around two districts: 'The City' (the City of London) and the Docklands (particularly around Canary Wharf). The City houses the London Stock Exchange (shares and bonds), London Metal Exchange (base metal and plastic futures), 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). There are now over 500 banks with offices in the City and Docklands, with the majority of business in London being conducted on an international basis, with established leads in areas such as Eurobonds, foreign exchange markets, energy futures and global insurance. The Alternative Investments Market has acted a growth market over the past decade,[citation needed] allowing London to also expand as an international equity centre for smaller firms.
The United Kingdom' financial exports contribute significantly towards the balance of payments. The UK has had an expanding export business in financial service, at least partly due to the presence of a regulatory structure now accepted by the Government as inadequate .
Several other major UK cities have large financial sectors and related services, most notably Leeds, which is now the UK's largest centre for business and financial services outside London and the largest legal centre outside London,[49][50][51] as well as Edinburgh, the eleventh largest banking centre in Europe and home to the Royal Bank of Scotland (the third largest bank in Europe), HBOS (owners of the Bank of Scotland), and Standard Life Insurance. The Blue Book 2006 reports that this industry added gross value of £86,145 million to the UK economy before adjustment of financial services valued at £50,165 million in 2004Real estate and lettings
The UK property market boomed for the seven years up to 2008 and in some areas property trebled in value over that period. The increase in property prices had a number of causes: sustained economic growth, low interest rates, the growth in property investment, and planning restrictions on the supply of new housing.
UK property market analysts have revised previously negative assessments of the market, with most subsequently predicting continued modest growth in prices in the mid-term. However, around September 2007, house prices began to fall consistently, arguably contributing to the negative UK economic growth of the 3rd Quarter 2008 .
First-time buyers who currently have assets not consisting of residential property, but with no way of attaining residential property (in some cases at all, and in others without undertaking unsustainable debt amounting to on average up to five times their annual salary), are now better placed to enter the property market.
This sector includes letting of dwellings and other related business support activities. The Blue Book 2006 reports that the lettings industry added gross value of £83,037 million to the UK economy in 2004 while other real estate and business support activities added gross value of £175,333 million.
The paucity of finance available to homebuyers by the self-regulation of the banks following the collapse of the financial system in 2007 continues to contribute to a very much diminished demand for housing in the UK with sales volumes around half of the pre-crash level. With many sellers reluctant to drop their price, there is a chronic over-supply of housing on the market at prices in excess of demand (as of September 2009), leading to the average time on the market for residential property to be over 12 months (well above the long term trend). This situation has arisen partly because of the deferred repayment windows created by the government forcing the courts to delay possession orders. As the regulatory framework of the banks is in concordance with Basel II, then the demand for UK residential property is likely to remain very subdued in comparison to pre credit-crunch lending for many years to come. As the forced sellers in the market increase when the repayment deferrals cease, in combination with other forced sellers (death and divorce), many economists predict that the worst of the crash in UK residential property is yet to be realised. This is in keeping with other major economies that experienced rapid house price growth over the last decade; They have seen larger scale falls in prices that have yet to materialise in the UK, as of September 2009.
Public administration and defence
The Blue Book 2006 reports that this sector added gross value of £55,280 million to the UK economy in 2004.
Education
The Blue Book 2006 reports that this sector added gross value of £61,786 million to the UK economy in 2004.
Health and social work
The Blue Book 2006 reports that this sector added gross value of £75,817 million to the UK economy in 2004.
Other social and personal services
This sector includes value added by hookers and hoes with employees and extraterritorial organisations. The Blue Book 2006 reports that this sector added gross value of £55,543 million to the UK economy in 2004.
London is the world capital for foreign exchange trading. The highest daily volume, counted in trillions of dollars US, is reached when New York enters the trade. Until relatively recently there was debate over whether or not the UK should abolish its currency Pound Sterling and join the Euro. The British Prime Minister, Gordon Brown, pledged at the time to hold a public referendum based on certain tests he set as Chancellor of the Exchequer.
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. Public opinion polls have shown that a majority of Britons have been opposed to joining the single currency for some considerable time and this position has now hardened further.[52] The main opposition party, the Conservative Party, are opposed to membership.
Exchange rates
(average for of each year), in USD (US dollar) and EUR (euro) per GBP; and inversely: GBP per USD and EUR. (Synthetic Euro XEU before 1999). Caution: these averages conceal wide intra-year spreads. The coefficient of variation gives an indication of this. It also shows the extent to which the pound tracks the euro or the dollar. Note the effect of Black Wednesday in late 1992 by comparing the averages for 1992 with the averages for 1993.
| Year | £/USD | USD/£ | C.Var | | £/XEU | XEU/£ | C.Var |
| 1990 | £0.5633 | $1.775 |
|
| £0.7161 | 1.397 |
|
| 1991 | £0.5675 | $1.762 |
|
| £0.7022 | 1.424 |
|
| 1992 | £0.5699 | $1.755 |
|
| £0.7365 | 1.358 |
|
| 1993 | £0.6663 | $1.501 |
|
| £0.7795 | 1.283 |
|
| 1994 | £0.6536 | $1.530 |
|
| £0.7742 | 1.292 |
|
| 1995 | £0.6338 | $1.578 |
|
| £0.8200 | 1.220 |
|
| 1996 | £0.6411 | $1.560 |
|
| £0.8029 | 1.245 |
|
| 1997 | £0.6106 | $1.638 |
|
| £0.6909 | 1.447 |
|
| 1998 | £0.6037 | $1.656 |
|
| £0.6779 | 1.475 |
|
| Year | £/USD | USD/£ | C.Var | | £/EUR | EUR/£ | C.Var |
| 1999 | £0.6185 | $1.617 |
|
| £0.6595 | €1.516 |
|
| 2000 | £0.6609 | $1.513 |
|
| £0.6099 | €1.640 |
|
| 2001 | £0.6943 | $1.440 |
|
| £0.6223 | €1.607 |
|
| 2002 | £0.6664 | $1.501 |
|
| £0.6289 | €1.590 |
|
| 2003 | £0.6123 | $1.633 |
|
| £0.6924 | €1.444 |
|
| 2004 | £0.5461 | $1.832 | 2.26% |
| £0.6787 | €1.474 | 1.92% |
| 2005 | £0.5500 | $1.820 | 3.47% |
| £0.6842 | €1.462 | 1.27% |
| 2006 | £0.5435 | $1.842 | 3.79% |
| £0.6821 | €1.466 | 1.11% |
| 2007 | £0.4999 | $2.001 | 1.97% |
| £0.6848 | €1.461 | 2.40% |
| 2008 | £0.5499 | $1.835 | tbc |
| £0.7964 | €1.226 | tbc |
1 GBP in USD since 1971
- Source: OANDA.COM Historical Currency Converter
- For consistency and comparison purposes, coefficient of variation is measured on both the "per pound" ratios, although it is conventional to show the forex rates as dollars per pound and pounds per euro.[citation nNational and regional
The strength of the UK economy varies from region to region. Gross value added (GVA) and GVA per capita are highest in London. The following table shows the GVA (2006) per capita of the 12 NUTS:2 areas, with data supplied by the Office for National Statistics .
| Rank | Place | GVA per capita
in pounds |
| 1 | Greater London, England | 26 192 |
| 2 | South East England | 21 514 |
| 3 | East of England | 19 599 |
| 4 | Scotland | 17 789 |
| 5 | South West England | 17 467 |
| 6 | East Midlands, England | 16 982 |
| 7 | West Midlands, England | 16 583 |
| 8 | North West England | 16 234 |
| 9 | Yorkshire and the Humber, England | 15 968 |
| 10 | North East England | 15 177 |
| 11 | Northern Ireland | 15 175 |
| 12 | Wales | 14 396 |
Two of the richest 10 areas in the European Union are in the United Kingdom. Inner London is number 1 with a GDP per capita of €65 138, and Berkshire, Buckinghamshire and Oxfordshire is number 7 with a GDP per capita of €37 379. Edinburgh is also one of the largest financial centres in Europe.
Taxation and borrowing
Main article: Taxation in the United Kingdom
Taxation in the United Kingdom may involve payments to at least two different levels of government: local government and central government (HM Revenue & Customs). Local government is financed by grants from central government funds, business rates, council tax and increasingly from fees and charges such as those from on-street parking. Central government revenues are mainly income tax, national insurance contributions, value added tax, corporation tax and fuel duty.
These data show the tax burden (personal and corporate) and national debt as a percentage of GDP. Samples are taken at 10 year intervals (snapshots, but the rolling averages are very close).
| Year | Tax | Debt |
| 1975/6 | 54% | 43% |
| 1985/6 | 44% | 43% |
| 1995/6 | 43% | 38% |
| 2005/6* | 46% | 40% |
- (Source: HM Treasury Public Finances Databank)
- (* — Projected)
The money Gross Domestic Product (GDP) for the United Kingdom, at market prices, in 2005 was £1,211 billion (or $2,431 billion) according to HM Treasury in March 2006.
GDP growth rate from 2000 to 2008 | Year | GDP Growth |
| 2000 | 3.9% |
| 2001 | 2.5% |
| 2002 | 2.1% |
| 2003 | 2.8% |
| 2004 | 3.0% |
| 2005 | 2.2% |
| 2006 | 2.9% |
| 2007 | 2.6% |
| 2008 | 0.7% |
Income distribution
lowest 10%
highest 10% | (1999)
2.1%
28.5% |
| Consumer prices inflation | RPI: 3% (2004), CPI: 1.6% (2004) |
Labour force composition
services
government
manufacturing/construction
energy
agriculture
| (2004)
46%
28%
24%
1%
1% |
| Industrial growth | -0.3% (1999) |
| Electricity production | 382.7 TWh (2004) |
| exports | 0.77% |
Electricity production composition
fossil fuel
hydro
nuclear
renewables
imports | (2004)
74.13%
1.1%
19.26%
3.55%
1.96% |
| Electricity consumption | 337.4 TWh (2003) |
| Electricity exports | 2.959 TWh (2003) |
| Electricity imports | 5.119 TWh (2003) |
| Agriculture products | cereals, oilseed, potatoes, vegetables; cattle, sheep, poultry; fish |
| Exported commodities | manufactured goods, fuels, chemicals; food, beverages (notably Scotch whisky), tobacco |
| Imported commodities | manufactured goods, machinery, fuels; foodstuffs |
