United Kingdom Economy Overview

Business

Great Britain and Northern Ireland, with a gross national income (GNI) per resident of (2017) US $ 40,530, is above the average of the EU countries. The loss of its leading global economic importance is mainly due to the two world wars, the dissolution of the Empire (British Empire and Commonwealth) and the emergence of new global economic centers, especially in North America and the Pacific.

Economic growth, which measured in terms of gross domestic product (GDP), was consistently positive from 1992 after a period of weakness in the early 1990s, came to an abrupt end as a result of the international financial crisis in 2009, but again reached 1.7% in 2013 (2015: 2, 3%). However, the high national debt (2015: 89.2% of GDP) made it necessary to implement a strict austerity program. The number of people in employment was 31.2 million in 2015; unemployment has fallen slightly since its peak in 1993 (just under 3 million) (2015: 1.75 million, which corresponds to an unemployment rate of 5.3%).

According to youremailverifier, the British economic system is market-based and capitalist. A supply-side economic policy with strong neoclassical elements has been pursued since the Thatcher government (Thatcherism). Since the beginning of the 1980s, this has led to a significant reduction in (social) state activities, to a continuous (re) privatization of many nationalized or traditionally public companies in the 1960s, and to a sustainable reduction in subsidies. This economic policy orientation was essentially replaced from 1997 by the Labor Party; public services were massively expanded. By contrast, the conservatives who have ruled since 2010 have given higher priority to reducing the state quota and reducing the budget deficit.

Foreign trade: Great Britain and Northern Ireland have had a declining share in world trade for a long time. The dominant role as the main supplier of finished goods until the 1950s has now been completely lost. With a share of around 40% of total exports, services have developed into the fastest growing area of ​​foreign trade. The decline of industry has permanently changed the structure of foreign trade. Great Britain and Northern Ireland are now more important as a market for finished goods than as a supplier; processed goods have replaced food and raw materials. In 2015, the deficit in the movement of goods reached a value of US $ 149.4 billion. As a result of Brexit Far-reaching changes can be expected in the next few years.

Since the Second World War, high exports of services had always created a surplus in the current account and masked the lack of competitiveness in British industry. The sharp decline in net inflows from oil revenues and an expansive economic stimulus program in 1987/88 (Lawson Boom) caused imports to rise sharply at the end of the 1980s without promoting exports. The result was a dramatically high balance of trade deficit and, at the same time, a decline in income from trade in services, a negative current account balance (2015: –5.2% of GDP). The most important trading partners are the EU countries (2015: 53.6% of total imports, 44.4% of total exports) and the USA (2015: 9.4% of total imports, 15.1% of total exports).

Service sector

In the course of the structural changes in the economy over the past few decades, the service sector in particular has grown considerably. Around 79% of all employed persons in Great Britain and Northern Ireland work in this sector, which (2014) generated 79.6% of GDP. A significant part of the job growth is among other things. attributable to part-time workers. The high service quota is primarily due to an increase in the workforce in the areas of public administration, education, health and social affairs. The traditionally important financial sector, on the other hand, recorded a decline in jobs due to strong rationalization in the sector. Along with New York and Tokyo, London is one of the three most important international financial centers in the world. Despite the rise of Asian financial centers, it still holds the leading position in international capital movements. This is also documented in the extraordinary concentration of over 500 foreign banks in London. The UK and Northern Ireland is also one of the largest international insurance markets.

Tourism: Almost 2 million people work in the tourism industry. This corresponds to a share of 6.4% of the total number of employees. The economic importance of tourism has increased significantly in recent years: The number of foreign guests increased from 25.7 million in 1998 to 32.9 million (+28%) in 2013. Spending by foreign guests rose to £ 21.0 billion over the same period. Most of the foreign guests come from France (2012: 3.8 million), the Republic of Ireland (2.5 million), the USA (2.8 million) and Germany (3.0 million). By far the most visited place is London, followed by South and South East England.

Transportation

The UK transport system is based on road traffic. In Great Britain and Northern Ireland there is left-hand traffic. In 2012 there were 499 cars for every 1,000 residents. The road network covers around 419,600 km, of which around 3,700 km are motorways.

Great Britain and Northern Ireland have a relatively dense rail network of 16,423 km. The rail passenger network includes, inter alia. an intercity network that links the main centers of the country with one another and is particularly strongly geared towards London. Eurotunnel, a British-French group, has operated passenger and freight shuttle services between the Folkestone and Calais terminals since 1994. Eurostar high-speed trains connect London (Waterloo) with Paris or Brussels (in less than three hours) and also with other centers. Overall, the now profit-oriented rail network of Great Britain and Northern Ireland is still in great need of improvement. The further expansion of the route network for high-speed trains via London, Manchester to Liverpool is planned.

Around two thirds of the total passenger volume is accounted for by the five London airports Heathrow, Gatwick, Stanstead, Luton and City Airport, of which Heathrow is the largest international airport with (2014) 73.4 million passengers, followed by Gatwick with 38.1 million Passengers. Other major international airports are Manchester, Glasgow, Aberdeen, Edinburgh and Belfast International.

Great Britain and Northern Ireland has 3,200 km of inland waterways, most of which date from the early industrial period. Only a small part is still commercially navigable today (Thames, Manchester Ship Canal). However, numerous canals have been reopened for water tourism in recent years. Great Britain and Northern Ireland occupy a subordinate position among the shipping nations with 15.876 million GT (2013). The sharp decline in the importance of the British merchant fleet since the 1970s is primarily a result of flagging out (flags of convenience) and the loss of government support. Major seaports are London, Grimsby and Immingham, Tees and Hartlepool, Forth, Sullom Voe (Shetland), Southampton, Milford Haven, Felixstowe, and Liverpool Dover. The Port of London, relocated further downstream after the closure of the old Docklands, is the country’s main universal port. Numerous formerly important ports are currently being converted, e.g. B. Liverpool, Manchester, Swansea, Hull. There are numerous ferry connections for passenger and freight traffic with mainland Europe and Ireland.

United Kingdom Economy Overview