Economic Trends/Outlook in the U.K.

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Economic Overview

The United Kingdom is the seventh global economy. However, since April 2008, the country has been going through a deep recession, deeply hit by the international financial crisis, due to the dominance of the third (financial) sector over its economy. After contracting by almost 5% in 2009, the GDP growth recovered slowly in 2010, rising to 1.7% according to estimates. Growth should remain slow in the coming years.

The crisis has damaged the country's public finances. Aid to the financial sector and fiscal stimulus measures have deepened the deficit and increased the burden of public debt, the latter reaching record levels of 10% and 70% of GDP respectively. The government's priority is therefore to improve the budgetary situation. Other reform measures have been announced, notably regarding the educational system, social security, pension system, financial regulation, taxation, etc.

The unemployment rate, before one of the lowest in Europe, has been rising sharply since the crisis and is estimated at around 8%.

Main Indicators 2009 2010 2011 2012 2013
GDP (billions USD) 2,182.43 2,247.46e 2,471.88e 2,602.49e 2,743.35e
GDP (Constant Prices, Annual % Change) -4.9 1.3e 1.7e 2.3e 2.5e
GDP per Capita (USD) 35,315e 36,120e 39,459e 41,267e 43,212e
General Government Balance (in % of GDP) -8.5e -8.3e -6.6e -5.1e -3.5e
General Government Gross Debt (in % of GDP) 68.3e 77.2e 83.0e 86.5e 87.4e
Inflation Rate (%) 2.1 3.3e 4.2e 2.0e 2.0e
Unemployment Rate (% of the Labor Force) 7.5e 7.8e 7.8e 7.7e 7.4e
Current Account (billions USD) -28.84e -36.97e -37.11e -39.22e -
Current Account (in % of GDP) -1.3e -1.7e -1.6e -1.6e -

Source: IMF - World Economic Outlook Database

Note: (e) Estimated Data


Main Sectors of Industry

The Agricultural sector accounts for less than 1% of the GDP, but is very productive. Main crops are potatoes, beetroot, wheat and barley. Livestock farming (especially sheep and cattle) continues to be a major agricultural activity, despite the crises of "mad cow" and "foot and mouth" diseases. The fishing sector is also well developed but is currently suffering from the depletion of fish volumes in the traditional fishing areas.

The United Kingdom has considerable mineral resources. Once the world's 10th biggest oil producer with huge natural gas reserves, its production is dropping fast. Nevertheless, groups like BP and Shell continue to be amongst the global leaders in the petroleum industry.

The secondary sector is not very competitive. The main activities are tool machinery, transport material and chemical products. The sectors with a good potential are information and communication technologies, bio-technology, aviation industry, renewable energies and defense.

The services sector, which employs three quarters of the active population and contributes three quarters of the GDP, is the driving force behind the economy. London remains Europe's largest financial market place, on par with New York.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 1.4 21.4 76.9
Value Added (in % of GDP) 0.7 21.0 78.2
Value Added (Annual % Change) -5.0 -10.2 -3.1

Source: World Bank - Last Available Data.

For more detailed background on Industries in the United Kingdom, click here.

Indicator of Economic Freedom

Mostly free
World Rank:
Regional Rank:

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation


Country Risk

See the Country Risk Analysis Provided By Ducroire.


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