United Kingdom » Introduction

Basic Economic Facts

Having a gross domestic product (GDP) of US$2,345 billion in 2007, The UK achieved the status of being the fifth largest economy in the world. The UK is forecast to have the strongest business environment of all major European economies for the period from 2008 to 2012. UK is the second largest exporter and third largest importer of commercial services, and the seventh largest exporter and fourth largest importer of merchandise and a leading global trading nation. The country attracted the second highest amount of foreign investment globally in 2007 by achieving US$171.1 billion of FDI inflows, representing 26 per cent of all FDI inflows into the European Union.

The British were the first in the world to enter the Industrial Revolution, and, like most industrialising countries at the time, initially concentrated on heavy industries such as shipbuilding, coal mining, steel production, and textiles. The empire created an overseas market for British products, allowing the United Kingdom to dominate international trade in the 19th century.

The service sector of the United Kingdom is dominated by financial services, especially in banking and insurance. London is one of the world's largest financial centres with the London Stock Exchange, the London International Financial Futures and Options Exchange, and the Lloyd's of London insurance market all based in the city. It also has the largest concentration of foreign bank branches in the world. In the past decade, a rival financial centre in London has grown in the Docklands area, with HSBC, Citigroup, and Barclays Bank all relocating their head offices there. The Scottish capital, Edinburgh, also has one of the large financial centres of Europe.

For nearly 10 years there has been a rise on the prices of oil and demand for the commodity but this has not been matched with ample investment in supplies. In the past 12 months the price of oil has gone through the roof from just above $50 to $125 a barrel. It is forecasted that the possibility of $150 to $200 a barrel is increasingly probable in the next six to 24 months. In 2008-2009, the trade deficit is expected to contract which had expanded radically since 1997, partly in response to weaker domestic demand growth. The current-account deficit is forecast to average 3.5-4% of GDP over the forecast period.