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Economy of the United Kingdom

Economy of the United Kingdom
Greenwich looking towards Canary Wharf, part of London's central business district, one of the major financial centres of the world
CurrencyPound sterling (GBP, £)
1 April to 31 March[a]
Trade organisations
WTO, G-20, G7, CPTPP and OECD
Country group
Statistics
Population67,596,281 (2022)[5]
GDP
GDP rank
GDP growth
  • Increase 4.8% (2022)[7]
  • Increase 0.3% (2023)[7]
  • Increase 1.1% (2024f)[7]
  • Increase 1.5% (2025f)[7]
GDP per capita
  • Increase $52,423 (nominal; 2024f)[6]
  • Increase $62,570 (PPP; 2024f)[6]
GDP per capita rank
Neutral decrease 1.7% (Sept 2024)[8]
Neutral decrease 5.0% (Aug 2024)[9]
Population below poverty line
Negative increase 21% (2023)[b][10]
Positive decrease 35.4 medium (2021)[11]
  • Increase 0.940 very high HDI (2022)[12] (15th)
  • Increase 0.865 very high IHDI (2022)[12]
(12th)
Decrease 71 out of 100 points (2023)[13] (20th)
Labour force
32,997,000 / 74.5% in employment (Jan–Mar 2024)[c][14]
Labour force by occupation
List
  • 26.8% Professional
  • 15.0% Associate professional
  • 10.7% Managers, directors and senior officials
  • 9.6% Administrative and secretarial
  • 9.2% Elementary occupations
  • 8.8% Skilled trades
  • 8.0% Caring, leisure and other service
  • 6.3% Sales and customer service
  • 5.4% Process plant and machine operatives
  • (Jan–Dec 2023)[d][14]
Unemployment1,486,000 / 4.3% (Jan–Mar 2024)[e][14]
Average gross salary
£681.70 per week (2023)[f][14]
Main industries
List
External
ExportsIncrease £864.5 billion (2023)[g][16] (4th)
Export goods
List
  • £36.5bn Cars
  • £34.4bn Power generators
  • £26.1bn Medicinal and pharmaceutical products
  • £20.6bn Crude oil
  • £19.8bn Unspecified goods
  • £13.2bn Refined oil
  • £11.8bn Aircraft
  • £11.7bn Scientific instruments
  • £11.3bn Beverages and tobacco
  • £11.1bn Non-ferrous metals
  • £394.8bn Total (2023)[h][16]
Main export partners
List
  • £191.5bn (22.1%) United States
  • £60.8bn (7.0%) Germany
  • £57.4bn (6.6%) Ireland
  • £53.6bn (6.2%) Netherlands
  • £45.0bn (5.2%) France
  • £31.5bn (3.6%) China
  • £31.2bn (3.6%) Switzerland
  • £25.9bn (3.0%) Belgium
  • £19.9bn (2.3%) Spain
  • £18.5bn (2.1%) Italy
  • £16.5bn (1.9%) Canada
  • £15.8bn (1.8%) India
  • £15.7bn (1.8%) Hong Kong
  • £14.9bn (1.7%) Singapore
  • £14.6bn (1.7%) Australia
  • £14.3bn (1.7%) United Arab Emirates
  • £13.8bn (1.6%) Japan
  • £13.1bn (1.5%) Saudi Arabia
  • £12.1bn (1.4%) Luxembourg
  • £11.3bn (1.3%) Sweden
  • (2023)[g][16]
ImportsPositive decrease £897.9 billion (2023)[g][16] (6th)
Import goods
List
  • £40.2bn Cars
  • £28.2bn Refined oil
  • £26.6bn Crude oil
  • £26.4bn Power generators
  • £25.4bn Medicinal and pharmaceutical products
  • £21.2bn Gas
  • £21.2bn Miscellaneous electrical goods
  • £16.9bn Telecoms and sound equipment
  • £15.7bn Clothing
  • £14.3bn Other manufactures (consumer)
  • £581.5bn Total (2023)[h][16]
Main import partners
List
  • £119.4bn (13.3%) United States
  • £89.2bn (9.9%) Germany
  • £65.1bn (7.2%) Netherlands
  • £60.2bn (6.7%) France
  • £58.8bn (6.5%) China
  • £44.2bn (4.9%) Spain
  • £32.4bn (3.6%) Italy
  • £32.0bn (3.6%) Ireland
  • £31.9bn (3.6%) Belgium
  • £30.2bn (3.4%) Norway
  • £23.2bn (2.6%) India
  • £20.5bn (2.3%) Poland
  • £19.6bn (2.2%) Switzerland
  • £16.0bn (1.8%) Turkey
  • £14.5bn (1.6%) Sweden
  • £13.7bn (1.5%) Japan
  • £9.8bn (1.1%) United Arab Emirates
  • £9.8bn (1.1%) Hong Kong
  • £9.8bn (1.1%) Canada
  • £8.9bn (1.0%) Denmark
  • (2023)[g][16]
FDI stock
  • Inward: £2.002 trillion
  • Outward: £1.769 trillion
  • (2021)[16]
£−78.3 billion (2022)[17]
£7.572 trillion (2023)[18] (2nd)
£−244.4 billion (2022)[17]
Public finances
£2.690 trillion / 98% of GDP (2023/24)[19]
£−120 billion / 4.4% of GDP (2023/24)[19]
Revenues£1.096 trillion (2023/24)[19]
Expenses£1.217 trillion (2023/24)[19]
Economic aid$19.1 billion (2023)[i][20]
List
List
  • Gross reserves (Apr 2024):[25]
  • UK Government: $180.2 billion
  • Bank of England: $27.1 billion
  • Net reserves (Apr 2024):[25]
  • UK Government: $86.9 billion
  • Bank of England: $0.015 billion

The economy of the United Kingdom is a highly developed social market economy.[26][27][28] It is the sixth-largest national economy in the world measured by nominal gross domestic product (GDP), ninth-largest by purchasing power parity (PPP), and twentieth by nominal GDP per capita, constituting 3.1% of nominal world GDP.[29] The United Kingdom constituted 2.17% of world GDP by purchasing power parity (PPP) in 2024 estimates.[30]

The United Kingdom has one of the most globalised economies[31] and comprises England, Scotland, Wales and Northern Ireland.[32] In 2022, the United Kingdom was the fifth-largest exporter[33] in the world and the fourth-largest importer.[34] It also had the fourth-largest outward foreign direct investment,[35] and the fifteenth-largest inward foreign direct investment.[36] In 2022, the United Kingdom's trade with the European Union accounted for 42% of the country's exports and 48% of its imports.[37] The United Kingdom has a highly efficient and strong social security system, which comprises roughly 24.5% of GDP.[4][38][3]

The service sector dominates, contributing 82% of GDP;[39] the financial services industry is particularly important, and London is the second-largest financial centre in the world.[40] Edinburgh was ranked 17th in the world, and 6th in Europe for its financial services industry in 2021.[41] The United Kingdom's technology sector is valued at US$1 trillion, third behind the United States and China.[42] The aerospace industry in the United Kingdom is the second-largest national aerospace industry.[43] Its pharmaceutical industry, the tenth-largest in the world,[44] plays an important role in the economy. Of the world's 500 largest companies, 18 are headquartered in the UK.[45] The economy is boosted by North Sea oil and gas production; its reserves were estimated at 2.5 billion barrels in 2021,[15] although it has been a net importer of oil since 2005.[46] There are significant regional variations in prosperity, with South East England and North East Scotland being the richest areas per capita. The size of London's economy makes it the wealthiest city by GDP per capita in Europe.[47] In 2021, the UK spent around 2.9% of GDP on research and development.[48]

In the 18th century, Britain was the first nation to industrialise.[49][50][51] During the 19th century, through its expansive colonial empire and technological superiority, Britain had a preeminent role in the global economy,[52] accounting for 9.1% of the world's GDP in 1870.[53] The Second Industrial Revolution was also taking place rapidly in the United States and the German Empire; this presented an increasing economic challenge for the UK, leading into the 20th century. The cost of fighting both the First and Second World Wars further weakened the UK's relative position. Despite a relative decline in its global dominance, in the 21st century the UK retains the ability to project significant power and influence around the world.[15][54][55][56]

Government involvement is primarily exercised by His Majesty's Treasury, headed by the Chancellor of the Exchequer, and the Department for Business and Trade. Since 1979, management of the economy has followed a broadly laissez-faire approach.[26][27][57][58][59][60] The Bank of England is the UK's central bank, and since 1997 its Monetary Policy Committee has been responsible for setting interest rates, quantitative easing, and forward guidance.


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