Capital City: London
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Economic trends

The United Kingdom (UK) has the 4th largest economy in the world and the 2nd largest in the European Union (EU). A highly developed, diversified, market-based economy with extensive social welfare services provides most residents with a high standard of living. The GDP growth rate was 2.8% in 2006, and 3.1% in 2007. According to IMF, it is estimated to slow down to 2.3% in 2008. Inflation continues to exceed the central target of 2% of the Bank of England (the central bank) at a rate of 2.4% in 2007. The unemployment rate is one of the lowest in Europe (arround 5%). The UK has to face two major challenges: to modernize its public services (transport, education, public health, etc.) and to reform the pension system.

Main branches of industry

Agriculture sector contributes only 1% of the GDP and employs 2% of the active population, but is very productive. Cattle breeding is still the major agricultural activity, despite "mad cow" and "foot and mouth" disease crisis. Fishing sector is also well developed. UK has considerable mineral resources. It is the 10th largest oil producer in the world and its gas reserves are huge. Groups like BP and Shell are among the global leaders in the petroleum industry. Manufacturing industry is not very competitive and accounts for around 25% of the GDP. The sectors having good potential are pharmaceutical, aircrafts industry and defence. Services sector is the driving force behind the economy and contributes nearly 73% to the GDP. London is Europe's largest financial market place, at par with New York.

International trade

The UK is a major international trading power. Though a member of EU, it does not currently participate in single ‘euro’ currency. The United Kingdom is the EU’s only significant energy exporter. The share of foreign trade in its GDP is more than 50%. 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. Its top three export partners are: the USA, Germany and France. The commodities mainly exported are machinery, electric equipment, vehicles, mineral fuels & oils, and pharmaceutical products. UK’s top three import partners are: Germany, the USA, and France. The country mainly imports machinery, vehicles, capital goods and aircraft equipment.