UK: Country fact sheet
- Content Type
- Country Data and Maps
- Economist Intelligence Unit
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- Summary, Economy, Background, Fact sheet
- Political Geography
- United Kingdom
Annual data 2018 Historical averages (%) 2014-18 Population (m) 67.1 Population growth 0.8 GDP (US$ bn; market exchange rate) 2,858.8 Real GDP growth 2.0 GDP (US$ bn; purchasing power parity) 3,056.7 Real domestic demand growth 2.2 GDP per head (US$; market exchange rate) 42,579 Inflation 1.5 GDP per head (US$; purchasing power parity) 45,526 Current-account balance (% of GDP) -4.4 Exchange rate (av) £:US$ 0.75 FDI inflows (% of GDP) 4.0
Background: The end of the second world war coincided with the decline of the UK as an imperial power. Residual links with former colonial territories, close relations with the US and a separate sense of identity delayed UK membership of the European Community (now the EU) until 1973. Successive governments have resisted closer EU integration. In a referendum in June 2016 the UK electorate voted to leave the EU. The future contours of the UK's relationship with the EU are uncertain, but a diminution of UK influence in the region looks inevitable.
Political structure: The UK is a constitutional monarchy. The head of state is Queen Elizabeth II. Parliament has an elected House of Commons (the lower house, 650 seats) and a non-elected House of Lords (the upper house, non-fixed membership of about 800). A general election has been called for December 12th 2019, and parliament has dissolved in the interim.
Policy issues: UK economic policy has yet to return to normal after the financial crisis. The monetary stance remains exceptionally loose by historical standards. Real GDP growth slowed modestly in 2016-18 compared with 2015. The fallout from the Brexit vote has dominated the policy agenda. The Economist Intelligence Unit expects the government to focus its efforts on negotiating a future trade relationship with the EU and on reducing the damaging effect on the economy of the greater barriers to trade caused by leaving the EU single market. This has led to a shift in the UK's monetary and fiscal policy mix, with fiscal policies becoming more significant. Fiscal policy has been eased slightly in 2019, and this will continue into 2020. Managing Brexit has forced policymakers to address structural deficiencies in the UK, such as weak productivity.
Taxation: The headline rate of corporation tax has been reduced steadily, from 28% in 2010 to 19% since April 2018. There are three bands of personal income tax, set at 20%, 40% and 45% (the 45% rate came into effect in April 2013, replacing the 50% rate introduced in 2010). The standard rate of value-added tax (VAT) is 20%, raised from 17.5% in 2011. Excise duties on tobacco and alcohol are among the highest in Europe.
Foreign trade: In 2018 exports of goods totalled US$460.3bn and imports amounted to US$650.1bn, resulting in a trade deficit of US$189.9bn. The services surplus declined to about US$143bn. The overall current-account deficit widened in absolute terms, to US$123.1bn, from US$93bn in 2017, and increased as a share of GDP from 3.5% to 4.3%.
Major goods exports, 2018 % of total Major goods imports, 2018 % of total Machinery & transport equipment 38.2 Machinery & transport equipment 37.3 Chemicals & related products 15.7 Chemicals & related products 11.9 Mineral fuels, lubricants & related materials 10.2 Mineral fuels, lubricants & related materials 10.3 Leading export markets, 2018 % of total Leading import suppliers, 2018 % of total US 14.0 Germany 14.0 Germany 10.2 US 10.0 Netherlands 7.4 China 9.6 France 6.8 Netherlands 8.6
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