The UK Economy
Done by: Saira
The economy of the United Kingdom is the world's sixth-largest national economy measured by both nominal GDP and purchasing power parity (PPP). The UK has the third-largest national economy in Europe measured by nominal GDP (after Germany and France) and the second-largest measured by PPP (after Germany). Its GDP per capita is ranked the 20th highest in the world in nominal terms and the 17th highest in PPP terms. The UK is a member of the Commonwealth of Nations, the European Union, the G7, the G8, the G20, the International Monetary Fund, the Organisation for Economic Co-operation and Development, the World Bank, the World Trade Organisation and the United Nations. The British economy is made up (in descending order of size) of the economies of England, Scotland, Wales and Northern Ireland. In the 18th century the UK was the first country in the world to industrialise,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 caused an increasing challenge to Britain's role as the leader of the global economy. The costs of fighting both the First World War and the Second World War further weakened the relative economic position of the UK, and by 1945 Britain had been superseded by the United States as the chief player in the global economy. However, the UK still maintains a significant role in the world economy. The UK is one of the world's most globalised countries. London is the world's largest financial centre alongside New York,has the largest city GDP in Europe and is home to the headquarters of more than 100 of Europe's 500 largest companies.The aerospace industry of the UK is the second- or third-largest aerospace industry in the world, depending upon the method of measurement.The British economy is boosted by North Sea oil and gas reserves, overall worth an estimated £250 billion in 2007 The UK entered its worst recession since World War 2 in 2008. However the UK economy grew by 1.2 per cent in Q2 of 2010 and 0.8 per cent in Q3, the fastest consecutive growth in over 10 years, accelerating from the 0.4 per cent growth recorded in Q1 of 2010 and 0.4 per cent growth in Q4 of 2009.The U.K. economy has grown 2.8% since the end of the recession; the UK economy has recovered twice as fast as expected so far.The UK is currently ranked fourth in the world (and first in Europe) in the World Bank's Ease of Doing Business Index. Advtantages of Economic System
1. Transaction costs will be eliminated.
For instance, Uk firms currently spend about £1.5 billion a year buying and selling foreign currencies to do business in the EU. With the EMU this is eliminated, so increasing profitability of EU firms.
Advice to young people: You can go on holiday and not have to worry about getting your money changed, therefore avoiding high conversion charges. 2. Price transparency.
| Eu firms and households often find it difficult to accurately compare the prices of goods, services and resources across the EU because of the distorting effects of exchange rate differences. This discourages trade. According to economic theory, prices should act as a mechanism to allocate resources in an optimal way, so as to improve economic efficiency. There is a far greater chance of this happening across an area where E.M.U exists.Advice to young people: We can buy things without wrecking our brains trying to calculate what price it is in our currency.
| 3. Uncertainty caused by Exchange rate fluctuations eliminated.
| Many firms become wary when investing in other countries because of the uncertainty caused by the fluctuating currencies in the EU. Investment would rise in the EMU area as the currency is universal within the area, therefore the anxiety that was previously apparent is...
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