During its heyday in the 19th century, the British Empire occupied one fourth of land. As a result of the redivision 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, British GDP again made the country one of the most developed. The United Kingdom has become the founder 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 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.
Economics overview
The UK is a leading trading power and financial center. Its economy is third in Europe after Germany and France. The nominal GDP of Great Britain in 2015 amounted to 2.849 trillion US dollars. Agriculture is intensive, highly mechanized and efficient by European standards. With employment of only 2% of the labor force, this sector satisfies 60% of the country's food needs. The UK has a population of over 64 million. On the territory of the country there are 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 key to the growth of the state has become the services sector. The importance of industry is gradually diminishing. To date, this area is already responsible for only 20% of UK GDP. Fewer young people want to work in this industry. The future of the UK economy is likely to be related to the services sector, namely its financial segment.
Economic crisis and exit from the EU
The recession in 2008 hit the UK national economy hard. This is due to the importance of a financial sector for a country. Falling housing prices, high consumer debt and the global economic recession have added to the country's domestic problems. This made the Labor Party think about measures to stimulate and stabilize financial markets.
In 2010, the new government, most of which were conservatives, was led by Cameron. A program has been developed to combat state budget deficits and high levels of debt. However, she did not bear significant fruit. As of mid-2015, the budget deficit amounted to 5.1% of UK GDP. This is one of the highest rates among the G7 countries. In 2012, low consumer spending and investment negatively impacted the economy, but gross domestic product grew by 1.7% in 2013 and by 2.8% in 2014. This was due to the recovery in housing prices and rising consumer spending.
Since the beginning of 2015, the Bank of England began to gradually raise interest rates, which, due to the state of the economy, were record low due to the growth of gross domestic product. However, due to frustration with the Brussels bureaucracy and the flow of migrants, UK citizens voted to leave the EU on June 23, 2016. It may take years to directly separate the country's economy from the European Union, but this event may become a trigger for holding similar referenda in other countries. How this will affect the economy of Great Britain and the European Union itself is still in question.
Main characteristics
The main indicators of the state economy are as follows:
- The population of Great Britain is 64066222 people.
- Of these, 15% live below the poverty line.
- Nominal GDP - 2.849 trillion US dollars (5th place in the world), at purchasing power parity - 2.679 (9th).
- The economy grew by 2.1% in 2016.
- Nominal GDP per capita is 43, 770 US dollars (13th place in the world), at purchasing power parity - 41158 (27th).
- The unemployment rate is 4.9%.
UK GDP by years
In 2015, the gross domestic product amounted to 2848.76 billion US dollars. This is 4.59% of the global total. The highest GDP growth rates in the UK were in the early 1970s. Gross domestic product could increase by 6.5% per year. In the early 1990s, economic growth per year reached 4%. Between 1992 and 2007, GDP grew by an average of 2.68%. The average gross domestic product for 1960-2015 amounted to 1081.01 billion US dollars. A record low value was recorded in 1960, and high in 2014.
Great Britain stands out as the fastest growing economy among the G7 countries over the past four years. She 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 withdrawal from the EU, the pound sterling fell to record low levels. It will strengthen or, on the contrary, negatively affect the economy the decision to withdraw from the European Union, the future will show.
UK GDP structure
Agriculture produces less than 1% of GDP. It is intense and highly mechanized. This sector employs 1.5% of the economically active population of the United Kingdom. About two-thirds of agriculture is animal husbandry. It is subsidized by the European Union program. Fishing is also of great importance. The industry employs 18.8% of the workforce. Today, this industry is gradually losing its significance.
UK industry provides 21% of GDP. The most important sector is the service sector. It employs a large part of the working-age population. It gives 78.4% of GDP. The most important industry is financial services. Therefore, the UK suffered such great losses during the recent global economic crisis. London is an important financial center. In second place is the aerospace industry. The third is the UK pharmaceutical industry.
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 southeast of England and Scotland. The poorest region is Wales. Two of the ten richest areas in the European Union are in the UK. London comes first. The per capita GDP of this city is 65, 138 euros.
In seventh place - Berkshire, Buckinghamshire and Oxfordshire. GDP per capita here is 37, 379 euros. Edinburgh, like London, is one of the largest financial centers in Europe. On the contrary, Cornwall has the lowest gross value added per capita. The region has been receiving additional funding from the EU since 2000.
International organizations
One of the most active members of the European Union from 1973 to 2016 was the United Kingdom. The country's economy is tied to this association. However, in June 2016, residents of the United Kingdom in a general referendum decided to withdraw from the EU. The process of refusal of membership can take several years. Also, the UK is a member of the Commonwealth of Nations, UN, IMF, OECD, World Bank, WTO, Asian Infrastructure Investment Bank.
