Economy of the United Kingdom

Economy of the United Kingdom
London is the heart of the United Kingdom's economy and the second-largest financial centre in the world behind New York City.
CurrencyPound sterling (GBP, £)
1 April to 31 March[a]
Trade organisations
WTO, G-20, G7 and OECD
Country group
Statistics
Population67,026,292 (2021)[3]
GDP
GDP rank
GDP growth
GDP per capita
  • Increase $48,913 (nominal; 2023)[4]
  • Increase $56,836 (PPP; 2023)[4]
GDP per capita rank
Steady 4.0% (Jan 2024)[6]
Neutral increase 5.25% (Dec 2023)[7]
Population below poverty line
Positive decrease 18.6% (2017 est.)[8]
Positive decrease 35.4 medium (2021)[9]
Labour force
33,174,000 / 75.0% in employment (Oct–Dec 2023)[c][12]
Labour force by occupation
List
  • 27.0% Professional
  • 14.8% Associate professional
  • 10.5% Managers, directors and senior officials
  • 9.6% Administrative and secretarial
  • 9.5% Elementary occupations
  • 8.8% Skilled trades
  • 8.0% Caring, leisure and other service
  • 6.2% Sales and customer service
  • 5.4% Process plant and machine operatives
  • (Oct 2022 – Sep 2023)[d][12]
Unemployment1,320,000 / 3.8% (Oct–Dec 2023)[e][12]
Average gross salary
£681.70 per week (2023)[f][12]
Main industries
External
ExportsIncrease £870.4 billion (12 months to Nov 2023)[g][13] (5th)
Export goods
List
  • £35.9bn Cars
  • £34.0bn Power generators
  • £26.2bn Medicinal and pharmaceutical products
  • £22.1bn Unspecified goods
  • £20.8bn Crude oil
  • £12.7bn Beverages and tobacco
  • £12.1bn Refined oil
  • £11.8bn Scientific instruments
  • £11.6bn Aircraft
  • £11.4bn Non-ferrous metals
  • £398.7bn Total
  • (12 months to Nov 2023)[h][13]
Main export partners
List
  • £188.5bn (21.2%) United States
  • £61.1bn (6.9%) Germany
  • £57.7bn (6.5%) Ireland
  • £57.2bn (6.4%) Netherlands
  • £45.7bn (5.1%) France
  • £41.3bn (4.6%) China
  • £41.1bn (4.6%) Switzerland
  • £25.5bn (2.9%) Belgium
  • £20.2bn (2.3%) Hong Kong
  • £19.4bn (2.2%) Spain
  • £17.6bn (2.0%) Italy
  • £16.1bn (1.8%) United Arab Emirates
  • £16.1bn (1.8%) Canada
  • £16.0bn (1.8%) India
  • £14.6bn (1.6%) Singapore
  • £14.2bn (1.6%) Japan
  • £13.9bn (1.6%) Sweden
  • £13.7bn (1.5%) Australia
  • £12.2bn (1.4%) Luxembourg
  • £11.7bn (1.3%) Saudi Arabia
  • (4 quarters to June 2023)[g][13]
ImportsIncrease £898.3 billion (12 months to Nov 2023)[g][13] (6th)
Import goods
List
  • £40.3bn Cars
  • £28.5bn Refined oil
  • £27.3bn Crude oil
  • £26.3bn Gas
  • £26.2bn Power generators
  • £25.6bn Medicinal and pharmaceutical products
  • £21.6bn Miscellaneous electrical goods
  • £17.8bn Telecoms and sound equipment
  • £16.3bn Clothing
  • £14.4bn Other manufactures (consumer)
  • £584.8bn Total
  • (12 months to Nov 2023)[h][13]
Main import partners
List
  • £121.5bn (13.3%) United States
  • £85.8bn (9.4%) Germany
  • £68.4bn (7.5%) Netherlands
  • £67.5bn (7.4%) China
  • £56.9bn (6.2%) France
  • £41.1bn (4.5%) Spain
  • £40.7bn (4.5%) Norway
  • £32.3bn (3.5%) Belgium
  • £32.3bn (3.5%) Italy
  • £30.6bn (3.4%) Ireland
  • £22.3bn (2.4%) India
  • £19.4bn (2.1%) Switzerland
  • £19.3bn (2.1%) Poland
  • £16.1bn (1.8%) Turkey
  • £14.4bn (1.6%) Japan
  • £12.7bn (1.4%) Sweden
  • £9.8bn (1.1%) Canada
  • £9.7bn (1.1%) Hong Kong
  • £9.3bn (1.0%) United Arab Emirates
  • £8.9bn (1.0%) Denmark
  • (4 quarters to June 2023)[g][13]
FDI stock
  • Inward: £2.002 trillion
  • Outward: £1.769 trillion
  • (2021)[13]
£–78.3 billion (2022)[14]
£7.286 trillion (2022)[15] (2nd)
£–244.4 billion (2022)[14]
Public finances
£2.540 trillion / 96% of GDP (2022/23)[16]
£–131 billion / 5.1% of GDP (2022/23)[16]
Revenues£1.027 trillion (2022/23)[16]
Expenses£1.157 trillion (2022/23)[16]
Economic aid$15.8 billion (2022)[i][17]
List
List
  • Gross reserves (Jan 2024):[22]
  • UK Government: $185.5 billion
  • Bank of England: $24.6 billion
  • Net reserves (Jan 2024):[22]
  • UK Government: $85.2 billion
  • Bank of England: $0.016 billion

The economy of the United Kingdom is a highly developed social market economy.[23][24][25] It is the sixth-largest national economy in the world measured by nominal gross domestic product (GDP), ninth-largest by purchasing power parity (PPP), and twenty-first by nominal GDP per capita, constituting 3.1% of nominal world GDP.[26] The United Kingdom constitutes 2.3% of world GDP by purchasing power parity (PPP).[27][26]

The United Kingdom has one of the most globalised economies[28] and comprises England, Scotland, Wales and Northern Ireland.[29] In 2022, the United Kingdom was the fourth-largest exporter[30] in the world and the fourth-largest importer.[31] It also had the fourth-largest outward foreign direct investment,[32] and the thirteenth-largest inward foreign direct investment.[33] In 2022, the United Kingdom's trade with the European Union accounted for 42% of the country's exports and 48% of its imports.[34]

The service sector dominates, contributing 82% of GDP;[35] the financial services industry is particularly important, and London is the second-largest financial centre in the world.[36] Edinburgh was ranked 17th in the world, and 6th in Europe for its financial services industry in 2021.[37] The United Kingdom's technology sector is valued at US$1 trillion, third behind the United States and China.[38] The aerospace industry in the United Kingdom is the second-largest national aerospace industry.[39] Its pharmaceutical industry, the tenth-largest in the world,[40] plays an important role in the economy. Of the world's 500 largest companies, 18 are headquartered in the UK.[41] The economy is boosted by North Sea oil and gas production; its reserves were estimated at 2.5 billion barrels in 2021,[8] although it has been a net importer of oil since 2005.[42] There are significant regional variations in prosperity, with South East England and North East Scotland being the richest areas per capita. The size of London's economy makes it the wealthiest city by GDP per capita in Europe.[43]

In the 18th century, Britain was the first nation to industrialise.[44][45][46] During the 19th century, through its expansive colonial empire and technological superiority, Britain had a preeminent role in the global economy,[47] accounting for 9.1% of the world's GDP in 1870.[48] The Second Industrial Revolution was also taking place rapidly in the United States and the German Empire; this presented an increasing economic challenge for the UK, leading into the 20th century. The cost of fighting both the First and Second World Wars further weakened the UK's relative position. Despite a relative decline in its global dominance, in the 21st century the UK retains the ability to project significant power and influence around the world.[8][49][50][51]

Government involvement is primarily exercised by His Majesty's Treasury, headed by the Chancellor of the Exchequer, and the Department for Business and Trade. Since 1979, management of the economy has followed a broadly laissez-faire approach.[23][24][52][53][54][55] The Bank of England is the UK's central bank, and since 1997 its Monetary Policy Committee has been responsible for setting interest rates, quantitative easing, and forward guidance.


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