United Kingdom Economy

Topics: Unemployment, United Kingdom, Monetary policy Pages: 5 (1367 words) Published: July 8, 2013


The United Kingdom is the sixth largest economy in the world, and the third largest in Europe after Germany and France. London is the world's second largest financial center after New York. The most important industries of the economy of Great Britain are the aerospace industry and the pharmaceutical industry. This economy is boosted by its oil and gas reserves.

The currency of the UK is the pound sterling, which is also the world's third largest reserve currency after the U.S. dollar and the euro. 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 Cooperation and Development the World Bank, the World Trade Organisation and the United Nations.

In the 18th century, the UK was the first country in the world to industrialise and during the 19th century possessed a dominant role in the global economy. From the late 19th century the Second Industrial Revolution in the United States and Germany presented an increasing economic challenge to Britain. Despite victory, the costs of fighting the First and Second World Wars further weakened the accountability of Great Britains public finance and resulted in the collapse of the British Empire, and by 1945 the United States economy was the world's dominant economic power. However, it still maintains a significant role in the worlds economies. Since 1979 and the government of Margaret Thatcher most state owned companies were privatised and opened to public competition and listed in the UKs financial market.

The UK economy has been weak in recent years following the late 2000 recession with growth largely flat since 2010. The UK experienced a recession between 2008 and 2009, with many periods of consecutive negative growth and unemployment has held steady at late 2008 levels of 7.7%. In February 2013, the UK lost its top AAA credit ratng for first time since 1978.

Subject Descriptor| Units| 2000| 2001| 2002| 2003|
GDP per capita, constant prices| National currency| 20,346.85| 20,853.39| 21,286.82| 22,012.28| Inflation, average consumer prices| Index| 93.1| 94.2| 95.4| 96.7| Volume of imports of goods and services| Percent change| 9.489| 4.778| 5.222| 2.629| Volume of exports of goods and services| Percent change| 9.447| 2.303| 1.919| 2.788| Unemployment rate| Percent of total labor force| 5.532| 5.106| 5.199| 5.048|

2004| 2005| 2006| 2007| 2008| 2009| 2010| 2011| 2012| 22,542.75| 23,016.76| 23,479.32| 24,172.12| 23,777.32| 22,686.82| 22,920.69| 22,955.99| 22,809.15| 98| 100| 102.3| 104.7| 108.5| 110.8| 114.5| 119.6| 123| 6.958| 6.896| 10.064| -1.7| -1.779| -11.031| 7.965| 0.498| 2.036| 4.773| 9.056| 12.144| -2.481| 1.205| -8.199| 6.377| 4.569| -0.325| 4.788| 4.799| 5.406| 5.4| 5.558| 7.451| 7.853| 8.015| 8.02|

Gross domestic product per capita, constant prices (National currency)

By analyzing this graph we can see that GDP in the United Kingdom has been rising constantly but in 2008 it was affected by the crisis causing the economic growth to decrease.

The biggest problem facing the UK economy is the lack of economic recovery. After a fall in GDP in 2008, the economy briefly recovered, but the recent double dip recession of 2012 has left this economy in a longer economic downturn than the Great Depression. Over the next few years the economy can return to a normal rate of economic growth or it may become stuck in a period of economic stagnation.

GDP percentage change quarter to quarter since 2008

This graph shows what has happened to GDP since the peak of 2008.

Inflation, average consumer prices (Index)

Despite the length of the recession, inflation has often been over the government’s target of 2%. With fiscal policy limited by the government’s attempt to reduce the...
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