Economy of the United Kingdom

Economy of the United Kingdom

The United Kingdom, a leading trading power and financial centre, has an essentially capitalist economy, the fourth largest in the world in terms of market exchange rates and the sixth largest by purchasing power parity (PPP) exchange rates. Over the past three decades, the government has greatly reduced public ownership by means of privatisation programmes, and has contained the growth of the Welfare State.

Agriculture is intensive, highly mechanised, and efficient by European standards, producing about 60% of food needs with only 1% of the labour force. The UK has large coal, natural gas, and oil reserves; primary energy production accounts for 10% of GDP, one of the highest shares of any industrial state.

Services, particularly banking, insurance and business services, account for by far the largest proportion of GDP. Industry continues to decline in importance, although the UK is still Europe's largest manufacturer of armaments, petroleum products, personal computers, televisions, and mobile telephones. Tourism is also important: with over 24 million tourists a year, between China (33) and Austria (19.1), the United Kingdom is ranked as the sixth major tourist destination in the world.

The Blair government has put off the question of participation in the Euro system, citing five economic tests that would need to be met before they recommend that the UK adopts the Euro, and hold a referendum.

Office of Public Sector Information