During its heyday in the 19th century, the British Empire occupied one fourth of the land mass. As a result of the redistribution of the world during the two world wars, she lost a significant part of her colonial territories. However, already in the second half of the 20th century, the UK GDP again made the country one of the most developed. The United Kingdom has been a founding member of many modern international organizations. From 1973 to 2016, the UK was an active member of the European Union.
The United Kingdom plays a significant role in the global economy. It produces about 3% of the global gross domestic product at purchasing power parity. Its share in world exports is 4.6%, imports - 5.1%. The average salary in the country is about 4 thousand US dollars.
Economic Review
The UK is a leading trading power and financial center. Its economy ranks third inEurope after Germany and France. The nominal GDP of the UK in 2015 was $2.849 trillion. Agriculture is intensive, highly mechanized and efficient by European standards. With only 2% of the labor force employed, this sector satisfies 60% of the country's food needs. The population of Great Britain is over 64 million people. The country has deposits of coal, natural gas and oil. However, these reserves are rapidly depleted.
Since 2005, the UK has been a net importer of energy resources. The service sector has become the key to the growth of the state. The importance of industry is gradually decreasing. To date, this area is responsible for only 20% of UK GDP. Fewer young people want to work in this industry. The future of the UK economy is most likely linked to the service sector, namely its financial segment.
Economic crisis and exit from the EU
The recession in 2008 hit the UK economy hard. This is due to the importance of the financial sector for the country. Falling house prices, high consumer debt and a global economic recession have added to the country's domestic problems. This forced the Labor Party to think about measures to stimulate and stabilize financial markets.
In 2010, Cameron led the new government, which was dominated by Conservatives. A program was developed to combat the state budget deficit andhigh levels of debt. However, it did not bear significant fruit. As of mid-2015, the budget deficit stood at 5.1% of UK GDP. This is one of the highest rates among the G7 countries. In 2012, the low level of consumer spending and investment negatively affected the economy, but the gross domestic product grew by 1.7% in 2013 and by 2.8% in 2014. This was due to a recovery in housing prices and rising consumer spending.
Since the beginning of 2015, the Bank of England began to gradually raise interest rates against the backdrop of growing gross domestic product, which were record low due to the state of the economy. Nevertheless, due to frustration with the Brussels bureaucracy and the flow of migrants, British citizens on June 23, 2016 voted to leave the EU. The direct separation of the country's economy from the European Union may take years, but this event may become a trigger for similar referendums in other countries. How this will affect the economy of the UK and the European Union itself remains in question.
Key indicators
The main indicators of the state economy are as follows:
- The UK population is 64066222.
- Of these, 15% live below the poverty line.
- Nominal GDP - 2.849 trillion US dollars (5th in the world), purchasing power parity - 2.679 (9th).
- Economy growth - 2.1% in 2016.
- Nominal GDP per capita – $43,770(13th in the world), in purchasing power parity - 41158 (27th).
- Unemployment rate at 4.9%.
UK GDP by year
In 2015, the gross domestic product was 2848.76 billion US dollars. This is 4.59% of the global figure. The highest GDP growth in the UK was in the early 1970s. Gross domestic product could increase by 6.5% per year. In the early 1990s, economic growth reached 4% per year. Between 1992 and 2007, GDP increased by an average of 2.68%. The average gross domestic product for 1960-2015 was $1,081.01 billion. The record low was recorded in 1960, the highest in 2014.
The UK has been the fastest growing G7 economy over the past four years. It has the lowest unemployment and inflation rates. The state of its economy now looks like one of the most stable in the European Union. However, after the announcement of the results of the referendum on leaving the EU, the pound sterling fell to record lows. The future will show whether the decision to leave the European Union will strengthen or, on the contrary, negatively affect the economy.
UK GDP structure
Agriculture contributes less than 1% of GDP. It is intense and highly mechanized. The sector employs 1.5% of the economically active population of the United Kingdom. About two-thirds of agriculture comes from animal husbandry. It is subsidized by the European Union program. Fishing is also of great importance. Industry employs 18.8% of the labor force. Today, this industry is gradually losing its importance.
UK industry provides 21% of GDP. The most important sector is the service sector. It employs the majority of the working-age population. It gives 78.4% of GDP. The most important industry is financial services. That is why the UK suffered such large losses during the recent global economic crisis. London is an important financial center. In second place is the aerospace industry. In third place is the pharmaceutical industry in the UK.
Regional section
London is the city with the largest GDP in Europe. In the United Kingdom, there are significant differences between regions in terms of economic development. The richest in terms of GDP per capita is the south-east of England and Scotland. Wales is considered the poorest region. Two of the ten richest areas in the European Union are in the UK. First up is London. The GDP per capita of this city is 65138 euros.
In seventh place are Berkshire, Buckinghamshire and Oxfordshire. GDP per capita here is 37,379 euros. Edinburgh, like London, is one of the largest financial centers in Europe. In contrast, Cornwall has the lowest gross value added per capita. The region receives additional funding from the EU with2000.
International Organizations
One of the most active members of the European Union from 1973 to 2016 was the UK. The country's economy is tied to this association. However, in June 2016, the people of Great Britain voted in a general referendum to leave the EU. The process of resigning from membership can take several years. The UK is also a member of the Commonwe alth of Nations, the UN, the IMF, the OECD, the World Bank, the WTO, the Asian Infrastructure Investment Bank.
Foreign economic sector
The volume of exports in 2015 amounted to 442 billion US dollars. This is the eleventh place in the world. The main UK export partners are the following countries: United States of America, Germany, Switzerland, China, France, Netherlands, Ireland.
The volume of imports as of 2015 is 617 billion US dollars. According to this indicator, the UK is in sixth place. The main import partners are Germany, China, the United States of America, the Netherlands, France, and Belgium. The main export items of the country are mechanical engineering, transport, chemicals. The UK accounts for about 10% of global financial services exports.
