...seventh-largest economy in the world, has the second-largest economy in the European Union, and is a major international trading power. A highly developed, diversified, market-based economy with extensive social welfare services provides most residents with a high standard of living. The UK joined the European Economic Community (now known as the EU) in January 1973 and it is a founder member of the World Trade Organization. The United Kingdom is one of the world’s leading advanced economies. And it is the second biggest exporter of services in the global economy and ranked eighth in global exports of goods. The United Kingdom is the world's fifth-largest trading nation, highly dependent on foreign trade. It must import almost all its copper, ferrous metals, lead, zinc, rubber, and raw cotton and about one-third of its food. The United Kingdom's exports manufactured items like telecommunications equipment, automobiles, automatic data processing equipment, medicinal and pharmaceutical products and aircraft. Its main trading partners are European Union countries, The United States, China and Japan. United Kingdom is also the European Union's only significant energy exporter. It is also one of the world's largest energy consumers, and most analysts predict a shift in U.K. status from net exporter to net importer of energy by 2020, possibly sooner. Oil production in the U.K. is leveling off. Therefore, UK should export the oil energy from foreign countries. The economy of the United...
Words: 2897 - Pages: 12
...The UK is the 6th largest economy in the world according to GDP (current prices, US dollars) and the 8th largest in the world according to GDP (PPP). In 2012, the UK’s GDP (current prices) was $2.44 trillion and its GDP (PPP) was $2.336 trillion. For January to March 2014, the UK employment rate for those aged from 16 to 64 was 72.7%. The equivalent figures for the countries were 73.5% for Scotland, 72.9% for England, 70.0% for Wales and 67.8% for Northern Ireland. For January to March 2014, the UK unemployment rate for those aged 16 and over was 6.8%. The equivalent figures for the countries were 7.2% for Northern Ireland, 6.8% for both England and Wales, and 6.4% for Scotland. In 2009/10 to 2011/12, the annual average direct tax (such as income tax and National Insurance) paid by all UK households was £7,360 per household. By country, Scotland paid £7,056 per household, Northern Ireland paid £5,647 and Wales paid £5,564. In 2012/13, UK public sector net borrowing was £115.1 billion (7.4% of UK GDP), this excludes transfers related to the Bank of England Asset Purchase Facility and Royal Mail Pension Scheme. When these two transfers are included net borrowing was £80.7 billion (5.1% of UK GDP). These figures are for the same time period as the latest available figures for Scotland. At the start of 2013, Business Population Estimates showed that Scotland had the fewest registered private businesses per 10,000 adults in the UK at 740, followed by 753 in Wales, 785 in Northern...
Words: 513 - Pages: 3
...A short history on the economic background of the country United Kingdom is a very old country consists of England, Scotland, Wales and Northern Ireland. In the 18th century, the UK was among the first country in the world to industrialize and during the next century it became one of the dominating countries in the global economy. (Martinez, 2013) In the turn of the century, the UK remains among the great economies of the world trailing behind the US and some European countries. In recent times, the UK service sector makes up the bulk of its GDP with London and Edinburgh as among the biggest and busiest financial centers in the world. Being an old country, UK is bursting with historic monuments, royal palaces museums and some of the world’s cherished heritage sites (UNESCO). Tourism is among the important income generating sectors in its economy with millions of tourist visiting the country from around the world making it a UK £127 billion a year industry and provides employment for about 3 million people ("Britain's tourism industry,”). The United Kingdom’s economic freedom has reached a score of 74.8, making its economy the 14th freest according to the 2013 Index of free economies. It scored 0.7 point higher than its last year’s ranking and reflects efforts to improve the control of government spending. In regional terms, the U.K. is graded 5th in the Europe region. (Kim, Miller , Holmes & Roberts, 2012). Image source: Berkshire - Reading Market Place showing Salmons...
Words: 3060 - Pages: 13
... | | |UNIT NO | | |DM4X 10 | | | | | |UNIT TITLE | | |OUTCOME 2 | | |THE UK ECONOMY | | | | | | | | | | | | | | |...
Words: 4434 - Pages: 18
...goods prices. Primco also predict a medium-term government deficit reduction - the need for fiscal reform being agreed by all three political parties. One of the main focuses in the 2010 budget was support for small businesses. Clearly the need to help small businesses survive is essential for the future success of the economy. For example business rates are to be cut for one year, consequently 345,000 small firms will pay no business rate. This is likely to yield many positive externalities, investment will increase, actual output will increase closer to potential output and importantly employment should increase as the smaller firms have a greater profit margin from reduced overheads. Supply side policies are also predicted to be important in the immediate and long term future as the economy stabilises and recovers. One way of improving the long term stability of the economy is to increase education and training, to enhance Britain's flexible labour market. The only main policy in the budget 2010 was a one off payment to universities to provide more places for maths, science and engineering students. This is perhaps an indicator of what expertise the economy requires, a return to a more productive manufacturing...
Words: 820 - Pages: 4
...of the last 100 years, the UK remains a relevant western power in today’s world. The reason for this are varied between their political and legal history, social environment and economic status in today’s world. Political and Legal History Prior to 1707, the nations that currently make up the UK were each separate states. On May 1, 1707, the UK was formed by the unification of the kingdoms of England, Scotland, and Wales by the Act of Unions (Duncan 2010). This act formally joined all three kingdoms located on the British Isle under the same crown and government, with England remaining the most powerful entity within the UK. Also formed under the Act of Unions was the Parliament at Westminster, the UK’s main political body and rough equivalent to the United States’ Congress (Duncan 2010). Nearly 100 years later, the kingdom of Ireland joined the UK under the Union with Ireland Act of 1800 (Office of Public Sector Information). While Ireland would remain a part of the UK for over 120 years, they would leave the UK on December 6, 1921 as part of the Anglo-Irish Treaty (Factindex.com 1). During Ireland’s exit from the UK, the subdivisions of Ireland had to each approve the move to leave the UK. Because of this, some of the territory of Northern Ireland refused to approve this measure, and returned to the UK two days later (Factindex.com 1). Today, the territories of England, Wales, Scotland, and Northern Ireland make up the UK. Prior to 1945, the UK was one of the most active...
Words: 2101 - Pages: 9
...How the UK economy has evolved and changed since 1970 Over recent decades, the structure of the UK economy has undergone significant transformation and experienced changes that go hand in hand with the process of economic growth and development. In the primary sector which Includes activities directly related to natural resources, e.g. farming or oil extraction, changes in resource availability initiated structural change, as happened so dramatically with oil in 1973 and again in 1979. Oil has had further indirect effects on the structure of the UK economy by means of the exchange rate. The development of North Sea oil production enabled the UK to be self-sufficient in oil by 1980, but also bestowed ‘petro-currency’ status on the pound. This meant that the sterling exchange rate was now responsive to changes in oil prices, which between 1979 and 1983 tended to keep the pound higher than would otherwise have been the case. The oil crises of the 1970s heralded the onset of long-term (youth and adult) unemployment and the decline of the domestic manufacturing sector. The overall downsizing and restructuring trend that followed was particularly noticeable in the manufacturing sector of the economy: a large proportion of operations that were traditionally carried out “in-house” were either contracted out or exported to areas of the world that offered substantially lower labour and/or running costs (Matlay, 2001). Throughout the 1979-1997 period, general and specific support aimed...
Words: 1036 - Pages: 5
...its impact on the UK economy is one that has been widely discussed over the years, given the significant economic effects it imposes on both parties involved. The UK taking up its membership into the EU in 1973 following its establishment in 1967 enabled vast benefits of free trade to be shared amongst members of this trading bloc. However, over a quarterly time series from 1999 to 2014 the UK has been noted to have run a relatively large balance of trade deficit in terms of its trade in goods with the EU (see figure 2), and as such lays emphasis on the UK’s lack of competitiveness, specifically in its manufacturing industry. The importance of the EU has increasingly become more significant in terms of the UK’s total economic activity, generated through trade transactions. Figure 1: ONS As seen in figure 1, there has been a downward trend in the transaction with the EU expressed as a percentage of UK GDP, falling by 231.25% from Q1 of 1991 to Q4 of 2014. In relations to the total trade in goods with the EU, there has generally been a deficit, which increased by 874.9% from 1999 to 2014. From figure 2 it can be observed that the largest deficit of -£21500m occurred in Q4 of 2014 and the lowest in Q4 of 1999. Figure 2: ONS The persistent balance of trade deficit seemed to be a result of imports from the EU to the UK exceeding exports. This could be the case as the percentage increase in exports from transactions made by the UK to the EU was only...
Words: 1599 - Pages: 7
...UK economy trend and retail market situation Distinctive feature of economic life in the UK at present time is a financial and economic crisis and its consequences, which took a severe stroke to banking system. Problems in the financial sector were followed by difficulties in other sectors of the economy, and as a result, production was reduced, unemployment was increased, consumer demand sharply was reduced, the real estate market was deteriorated, the British currency felt to its lowest level in 25 years. In the second half of 2008 UK economy entered a recession, and in the first half of 2009 UK GDP declined by 4.4% compared to the same period in 2008. However after the very strong downturn, UK's economy began to show signs of recovery since the second half of 2009. Macroeconomic statistics for 4th quarter of 2009 gave cause for optimism: the first time since the beginning of crisis weak growth of 0,3% had been recorded (Table 1.) Table 1. GPD Growth (www.statistics.gov.uk) |[pic] | Household Consumption first time after the crisis has become positive in Q3 of 2009 growing by 0.1% (Table 2.) Table 2. GDP by spending (Economic & Labor Market Review, Jan’10) [pic] The rate of inflation in UK has been slowed down in 2009 due to the decrease of demand caused by economic weakness. However there was sharp increase since...
Words: 581 - Pages: 3
...Evaluate the view that an increasing deficit in UK trade in goods is a major problem for the UK economy. A trade deficit is a situation in which the amount of imports being purchased by the country is greater than the exports being produced A fall in exports for the UK could have many effects on the UK. One of which is a negative impact on aggregate demand. Judging by the equation AD=C+I+G+X-M so if X decreases so will AD. There would be a fall in national output; this would create a multiplier effect on incomes and spending. Inturn this could cause a slow down in the economy or a recession. Also the actual GDP could fall below the potential GDP. This would happen because the AD would fall so companies start to lay people off so unemployment would rise. It would have a massive effect on businesses because it would hit their profits and therefore their business confidence. Government finances would also be affected because if there is slower growth they would receive less money in tax revenues, they would also have to spend more on welfare benefits so national debt would be ever increasing. Finally some areas are more dependant on exports than others. For example the north is more dependant than the south so it could worsen the north south divide. If there is less demand the incentives to investment in order to get ahead of competition isn’t as good so company wont invest in more capital or research and development. The lack of AD can lead to plant closures and job...
Words: 447 - Pages: 2
...-Firstly it can benefit the uk economy -this in turn benefits the individual within the UK Point 1 -Increased trading oppurtunities for uk companies, potentially leading to a more balanced UK -Due to the UK have a large export market for innovation and ideas as new country’s develop this market may increase as more firms may want to use their ideas, however this may also produce a much fiercer competition and other country’s will begin to develop their own ideas and their export market could decrease. China is becoming much more innovative and can use its own cheap manufacturing base giving them a large competitive advantage which the UK may not be able to exploit as easily if the economy continues to grow -less developed countries which often supply will gain more power over buyer so cheap production may be less available pushing up uk general prices causing inflation, Chinas cheap manufacturing may become more expensive Point 2 -Individual -Increased exports as a result of more trading opportunities may increase employment opportunities for individuals as more production is needed to supply for other countries -philips curve, increased employment may lead to inflation making UK prices more expensive, however inflation does also trigger a devaluation of the pound boosting exports more which can boost the economy and make the UK richer and more competitive in the export market which could increase the individuals standard of living. A richer economy is likely to mean there...
Words: 370 - Pages: 2
...change in currency prices on the UK economy Price Level A change in the price of currency will have many impacts upon the economy such as upon Balance of Payments, a change in real GDP, employment and inflation. rGDP AD2 AD1 AS Assuming demand is relatively elastic, an appreciation of the currency results in a lower AD, shown by AD1 decreasing to AD2, as lower export demand and greater spending on imports causing a fall in domestic AD. This reduces economic growth, shown by a decrease of Y1 to Y2. Furthermore we would see lower inflation, shown by P1 decreasing to P2 as import prices are cheaper, as well as lower AD leading to lower demand pull inflation and manufacturers having greater incentives to cut costs to remain competitive. This is assuming demand is relatively elastic - if the demand was more inelastic, the result will be vastly different - there will be less of a decrease in economic growth and inflation. Assuming demand is elastic, an appreciation of the currency price would worsen the current account position. As exports are more expensive and imports are cheaper, we see a decrease and an increase in both respectively. This will cause a bigger deficit on the current account, having negative implications upon the economy such as becoming uncompetitive and leading to a further decrease in export led economic growth. However, the impact on the current account isn't certain - an appreciation will tend to reduce inflation, making UK goods more competitive and leading...
Words: 611 - Pages: 3
...UK manufacturing has been in relative decline since the 1960s. Manufacturing as a share of real GDP has fallen from 30% in 1970 to 12% in 2010. This essay answer looks at the reasons why, and how significant government policies are as a cause. Manufacturing plays a crucial role in the competitiveness of the UK economy. Despite this, for far too long government policy has neglected manufacturing. During this period of neglect British manufacturing firms have repositioned themselves away from price-based competition more towards forms of non-price based competitiveness. The recent re-shoring of manufacturing to the UK is the start of a much needed trend. The University of Birmingham is funding a two year research project entitled ‘Regeneration Economies: Transforming People, Places and Production’. This project is exploring new policy solutions that will support British manufacturing. There is a need to develop a much better understanding of regional and national economies. High value manufacturing firms no longer sell products, but many solutions combine manufactured products with embedded services. Thus, a manufacturing policy must be simultaneously a service policy. There is a need to encourage universities and colleges to provide courses that blend technical training with an understanding of services, this is where the government comes in, by making these changes to education The Regeneration Economies project is also exploring major developments in engineering that have the...
Words: 818 - Pages: 4
...labour markets and the elite-orientated education of liberal market economies in the UK and the US result in higher degrees of inequality compared to coordinated market economies. Discuss. Student ID: 0956592 Word count (excluding references): 2492 This paper will discuss and analyze whether the flexibility of labour markets and the elite orientated education in liberal market economies, found in the UK and the US are the only reasons for higher degrees of inequality, compared to coordinated market economies. In order to understand the labour markets of liberal market economies and coordinated market economies, they must be defined in terms of their differences, which can affect the flexibility of their labour markets. Furthermore, it is important to note that there are numerous inequalities which may emerge in this analysis. Namely, gender inequality, class inequality, and wage inequality as well as some other perspectives will be examined. The aim of this paper is recognize which inequalities are more prominent in either liberal market economies or coordinated market economies, in relation to the flexibility of relevant labour market. Drawing on the work of Polanyi (1994), Esteves-Abe et al. (2001) suggest that market failures in economies can be avoided depending on the type and the extent of the social protection offered from national institutions. Liberal market economies, such as the US and UK, have an institutional framework which accents “general competences...
Words: 3049 - Pages: 13
...Back in 1992, the UK Conservative government was forced to withdraw the Pound from the European Exchange Rate Mechanism (ERM) after they were unable to keep it above its agreed lower limit. However now comes the question of whether or not that was the correct reaction to Black Wednesday since 55% of UK’s exports are already going to Eurozone countries, European tourists can bring more spending power into the UK as mentioned in extract D and in a time of recession, strength seems to come in numbers. Hence the UK could benefit from an adoption of the Euro. The most controversial issue is that the European Central Bank (ECB) will take over monetary policy if the UK were to join the 17-countries strong zone. The problem with this is the ‘one size doesn’t fit all’ dilemma that would make British interest rates the same as the Eurozone, by increasing it to ensure a low inflation rate, which is a priority in the ECB. Arguably, in the UK, this is at the expense of promoting economic growth and spending since the Bank of England tolerates a higher rate of inflation of 2% with a margin of ¬¬+- 1% because their priority is to avoid a double-dip recession. The interest rates in interest would cause a decrease in the marginal propensity to consume as well as increase loan debts, shown in the diagram with an inward shift in AD, as consumption and investment falls. Although there is also a decrease in Imports, it is marginally smaller than consumption (that accounts for 65% of Aggregate Demand)...
Words: 796 - Pages: 4
