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United Kingdom

 
     
    • Overview: 
      The UK is one of the world's great trading powers and financial centers, and its economy ranks among the four largest in Western Europe. The economy is essentially capitalistic; over the past 13 years the ruling Tories have greatly reduced public ownership and contained the growth of social welfare programs. Agriculture is intensive, highly mechanized, and efficient by European standards, producing about 60% of food needs with only 1% of the labor force. The UK has large coal, natural gas, and oil reserves, and primary energy production accounts for 12% of GDP, one of the highest shares of any industrial nation. Services, particularly banking, insurance, and business services, account by far for the largest proportion of GDP while industry continues to decline in importance, now employing only 25% of the work force and generating only 21% of GDP. The economy registered 4.2% GDP growth in 1994, its fastest annual rate for six years. Exports and manufacturing output are the primary engines of growth. Unemployment is gradually falling. Inflation is at the lowest level in 27 years, but British monetary authorities raised interest rates to 6.25% in 1994 in a preemptive strike on emerging inflationary pressures such as higher taxes and rising manufacturing costs. The combination of a buoyant economy and fiscal tightening is projected to trim the FY94/95 budget shortfall to about $50 billion - down from about $75 billion in FY93/94. The major economic policy question for Britain in the 1990s is the terms on which it participates in the financial and economic integration of Europe.

      Trade and Investment
      The United Kingdom is one of the largest European economies and a major international trading power. London ranks with New York as a leading international financial center. 

      Britain in 1996 ranked as the United States' sixth-largest trading partner in total trade and the fourth-largest U.S. export market after Canada, Japan, and Mexico. The British purchased $30.9 billion worth of U.S. goods in 1996, while U.S. imports from Britain were valued at $28.9 billion. U.S. total trade with the United Kingdom in 1996 amounted to 22% of total U.S. trade with the European Union. The U.K. was the largest source of foreign tourists in the U.S. in 1994, accounting for $8 billion in travel receipts. 

      At $252 billion in 1995, total two-way direct investment between the U.S. and Britain made the investment partnership the world's largest. The U.S. and U.K. were also each other's largest investment partner in 1996. U.S. direct investment in the U.K. in 1996 was $143 billion. British direct investment in the U.S. was $143 billion, accounting for 23% of total stock of foreign investment. This investment sustains about 1 million American jobs. 

      British industry is a mixture of publicly and privately owned firms. Several important industries are publicly owned, including steel, railroads, coal mining, shipbuilding, and certain utilities. Since 1979, the British Government has privatized most large state-owned companies, including British Steel, British Airways, British Telecom, British Coal, British Aerospace, and British Gas. 

      The United Kingdom is an energy-rich nation with significant reserves of oil and gas in the North Sea and large coal resources. Energy production accounts for almost 5% of GDP.  U.K. offshore areas should be an important source of continued production and new discoveries for some years. U.S. oil and oil-service companies participate actively in the North Sea oil industry and consider the United Kingdom an attractive environment for future investment. 

     
    • National product: 
      GDP - purchasing power parity - $1.174 trillion (1996 est.) 
     
    • National product real growth rate: 
      3.2% (1997 est.) 
     
    • National product per capita: 
      $17,980 (1997 est.) 
     
    • Inflation rate (consumer prices): 
      2.4% (1997) 
     
    • Unemployment rate: 
      9.3% (1997) 
     
    • Budget: 
       
    • Exports: 
      $295.3 billion (f.o.b., 1997 est.) 
     
        commodities: 
        manufactured goods, machinery, fuels, chemicals, semifinished goods, transport equipment 
     
        partners: 
        EU countries 56.7% (Germany 14.0%, France 11.1%, Netherlands 7.9%), US 10.9% 
     
    • Imports: 
      $283.6 billion (c.i.f., 1997 est.) 
     
        commodities: 
        manufactured goods, machinery, semifinished goods, foodstuffs, consumer goods 
     
        partners: 
        EU countries 51.7% (Germany 14.9%, France 9.3%, Netherlands 8.4%), US 11.6% 
     
    • Electricity: 
     
        capacity: 
        65,360,000 kW 
     
        production: 
        303 billion kWh 
     
        consumption per capita: 
        5,123 kWh (1993) 
     
    • Industries: 
      production machinery including machine tools, electric power equipment, automation equipment, railroad equipment, shipbuilding, aircraft, motor vehicles and parts, electronics and communications equipment, metals, chemicals, coal, petroleum, paper and paper products, food processing, textiles, clothing, and other consumer goods 
     
    • Agriculture: 
      accounts for only 1.5% of GDP; wide variety of crops and livestock products 
     
    • Illicit drugs: 
      gateway country for Latin American cocaine entering the European market; producer of synthetic drugs; transshipment point for Southwest Asian heroin; money-laundering center 
     
    • Economic aid: 
     
        donor: 
        ODA and OOF commitments (1992-93), $3.2 billion 
     
    • Currency: 
      British Pound Sterling (£) (1 pound = 100 new pence). 
     
      All major credit cards are accepted. The UK economy is 
      characterised by major contributions by manufacturing and 
      services, and by the importance of international trade. 
      In the 1980's, under the influence of sound economic 
      policies and North sea oil, the UK became a major political 
      and economic force. It is one of the more open economies 
      of the major industrial countries. 

      Although wealth has traditionally been concentrated in the 
      south-east, a combination of regional assistance and foreign 
      investment is generating significant areas of economic 
      activity and consumer demand in the north-east and parts 
      of Wales and Scotland.

     
    • Exchange rates: 
      British pounds (#) per US$1 - 0.6350 (January 1995), 0.6529 (1994), 0.6033 (1993), 0.5664 (1992), 0.5652 (1991), 0.5603 (1990) 
     
    • Fiscal year: 
      1 April - 31 March