Economy of The United Kingdom

Main article: Economy of the United Kingdom

The Bank of England – the central bank of the United Kingdom

The UK has a partially regulated market economy.^[189] Based on market exchange rates the UK is today the sixth-largest economy in the world and the third-largest in Europe after Germany and France, having fallen behind France for the first time in over a decade in 2008.^[190] HM Treasury, led by the Chancellor of the Exchequer, is responsible for developing and executing the British government's public finance policy and economic policy. The Bank of England is the UK's central bank and is responsible for issuing the nation's currency, the pound sterling. Banks in Scotland and Northern Ireland retain the right to issue their own notes, subject to retaining enough Bank of England notes in reserve to cover their issue. Pound sterling is the world's third-largest reserve currency (after the U.S. Dollar and the Euro).^[191] Since 1997 the Bank of England's Monetary Policy Committee, headed by the Governor of the Bank of England, has been responsible for setting interest rates at the level necessary to achieve the overall inflation target for the economy that is set by the Chancellor each year.^[192]

In the final quarter of 2008 the UK economy officially entered recession for the first time since 1991.^[193] Unemployment increased from 5.2% in May 2008 to 7.6% in May 2009 and by January 2012 the unemployment rate among 18 to 24-year-olds had risen from 11.9% to 22.5%, the highest since current records began in 1992.^[194][195] Total UK government debt rose from 44.5% of GDP in December 2007 to 76.1% of GDP in December 2010.^[196][197]

The Airbus A380 has wings and engines manufactured in the UK.

The UK service sector makes up around 73% of GDP.^[198] London is one of the three "command centres" of the global economy (alongside New York City and Tokyo),^[199] is the world's largest financial centre alongside New York,^{[200][201][202]} and has the largest city GDP in Europe.^[203] Edinburgh is also one of the largest financial centres in Europe.^[204] Tourism is very important to the British economy and, with over 27 million tourists arriving in 2004, the United Kingdom is ranked as the sixth major tourist destination in the world^[205] and London has the most international visitors of any city in the world.^[206] The creative industries accounted for 7% GVA in 2005 and grew at an average of 6% per annum between 1997 and 2005.^[207]
The Industrial Revolution started in the UK^[208] with an initial concentration on the textile industry, followed by other heavy industries such as shipbuilding, coal mining, and Steelmaking.^[209][210] The empire created an overseas market for British products, allowing the UK to dominate international trade in the 19th century. As other nations industrialised, coupled with economic decline after two world wars, the United Kingdom began to lose its competitive advantage and heavy industry declined, by degrees, throughout the 20th century. Manufacturing remains a significant part of the economy but accounted for only 16.7% of national output in 2003.^[211]

The automotive industry is a significant part of the UK manufacturing sector and employs over 800,000 people, with a turnover of some £52 billion, generating £26.6 billion of exports.^[212] The aerospace industry of the UK is the second- or third-largest national aerospace industry depending upon the method of measurement and has an annual turnover of around £20 billion.^{[213][214][215]} The pharmaceutical industry plays an important role in the UK economy and the country has the third highest share of global pharmaceutical R&D expenditures (after the United States and Japan).^[216][217]

The poverty line in the UK is commonly defined as being 60% of the median household income.^{[nb 8]} In 2007–2008 13.5 million people, or 22% of the population, lived below this line. This is a higher level of relative poverty than all but four other EU members.^[218] In the same year 4.0 million children, 31% of the total, lived in households below the poverty line after housing costs were taken into account. This is a decrease of 400,000 children since 1998–1999.^[219] The UK imports 40% of its food supplies.^[220]

Science and technology

Main article: Science and technology in the United Kingdom

Charles Darwin (1809–82), whose theory of evolution by natural selection is the foundation of modern biological sciences

England and Scotland were leading centres of the Scientific Revolution from the 17th century^[221] and the United Kingdom led the Industrial Revolution from the 18th century,^[208] and has continued to produce scientists and engineers credited with important advances.^[222] Major theorists from the 17th and 18th centuries include Isaac Newton, whose laws of motion and illumination of gravity have been seen as a keystone of modern science,^[223] from the 19th century Charles Darwin, whose theory of evolution by natural selection was fundamental to the development of modern biology, and James Clerk Maxwell, who formulated classical electromagnetic theory, and more recently Stephen Hawking, who has advanced major theories in the fields of cosmology, quantum gravity and the investigation of black holes.^[224] Major scientific discoveries from the 18th century include hydrogen by Henry Cavendish,^[225] from the 20th century penicillin by Alexander Fleming,^[226] and the structure of DNA, by Francis Crick and others.^[227] Major engineering projects and applications by people from the UK in the 18th century include the steam locomotive, developed by Richard Trevithick and Andrew Vivian,^[228] from the 19th century the electric motor by Michael Faraday, the incandescent light bulb by Joseph Swan,^[229] and the first practical telephone, patented by Alexander Graham Bell,^[230] and in the 20th century the world's first working television system by John Logie Baird and others,^[231] the jet engine by Frank Whittle, the basis of the modern computer by Alan Turing, and the World Wide Web by Tim Berners-Lee.^[232]

The modern UK plays a leading part in the aerospace industry, with companies including Rolls-Royce playing a leading role in the aero-engine market; BAE Systems acting as Britain's largest and the Pentagon's sixth largest defence supplier, and large companies including GKN acting as major suppliers to the Airbus project.^[233] Two British-based companies, GlaxoSmithKline and AstraZeneca, ranked in the top five pharmaceutical companies in the world by sales in 2009,^[234] and UK companies have discovered and developed more leading medicines than any other country apart from the US.^[235] The UK remains a leading centre of automotive design and production, particularly of engines, and has around 2,600 component manufacturers.^[236] Scientific research and development remains important in British universities, with many establishing science parks to facilitate production and co-operation with industry.^[237] Between 2004 and 2008 the UK produced 7% of the world's scientific research papers and had an 8% share of scientific citations, the third and second highest in the world (after the United States and China, and the United States, respectively).^[238] Scientific journals produced in the UK include Nature, the British Medical Journal and The Lancet.^[239]

Transport

Main article: Transport in the United Kingdom

Heathrow Terminal 5 building. London Heathrow Airport has the most international passenger traffic of any airport in the world.^[240][241]

A radial road network totals 29,145 miles (46,904 km) of main roads, 2,173 miles (3,497 km) of motorways and 213,750 miles (344,000 km) of paved roads.^[99] In 2009 there were a total of 34 million licensed vehicles in Great Britain.^[242] The National Rail network of 10,072 route miles (16,116 km) in Great Britain and 189 route miles (303 route km) in Northern Ireland carries over 18,000 passenger and 1,000 freight trains daily.^[99] Plans are now being considered to build new high-speed railway lines by 2025.^[243]
In the year from October 2009 to September 2010 UK airports handled a total of 211.4 million passengers.^[244] In that period the three largest airports were London Heathrow Airport (65.6 million passengers), Gatwick Airport (31.5 million passengers) and London Stansted Airport (18.9 million passengers).^[244] London Heathrow Airport, located 24 kilometres (15 mi) west of the capital, has the most international passenger traffic of any airport in the world^[240][241] and is the hub for the UK flag carrier British Airways, as well as BMI and Virgin Atlantic.^[245]

Energy

Main article: Energy in the United Kingdom

An oil platform in the North Sea

In 2006 the UK was the world's ninth-largest consumer of energy and the 15th largest producer.^[246] In 2007 the UK had a total energy output of 9.5 quadrillion Btus, of which the composition was oil (38%), natural gas (36%), coal (13%), nuclear (11%) and other renewables (2%).^[247] In 2009 the UK produced 1.5 million barrels per day (bbl/d) of oil and consumed 1.7 million bbl/d.^[248] Production is now in decline and the UK has been a net importer of oil since 2005.^[248] As of 2010 the UK has around 3.1 billion barrels of proven crude oil reserves, the largest of any EU member state.^[248]

In 2009 the UK was the 13th largest producer of natural gas in the world and the largest producer in the EU.^[249] Production is now in decline and the UK has been a net importer of natural gas since 2004.^[249] In 2009 the UK produced 19.7 million tons of coal and consumed 60.2 million tons.^[247] In 2005 it had proven recoverable coal reserves of 171 million tons.^[247] It has been estimated that identified onshore areas have the potential to produce between 7 billion tonnes and 16 billion tonnes of coal through underground coal gasification (UCG).^[250] Based on current UK coal consumption, these volumes represent reserves that could last the UK between 200 and 400 years.^[251] The UK is home to a number of large energy companies, including two of the six oil and gas "supermajors" – BP and Royal Dutch Shell – and BG Group.^[252][253]