Detailed Review of the UK’s Economy
As with most countries worldwide, the United Kingdom suffered from the global economic downturn brought about by the 2008 economic crisis. The United Kingdom has suffered a great deal due to the central role the financial sector plays in the country’s economy. In 2009, growth decreased by 5% but is now slowly recovering. United Kingdom growth for 2014 is estimated at 3.1%.
The British agricultural sector represents only 1% of national GDP, but remains very active and produces large amounts of potatoes, beets, wheat and barley. Animal husbandry is also an important aspect of the agricultural sector. The country has extensive natural resources, and was once the 10th largest oil producer; national companies BP and Shell are leaders in the petroleum industry.
Industry, on the other hand, is not a very competitive sector, although high-tech industry is a growth area. The service sector is by far the most important sector in the country, and generates three-quarters of the nation’s GDP. Heavily finance focused, the service sector has made London a stock market that rivals New York.
The United Kingdom has a strong international presence in the commercial field, which accounts for 60% of the country’s GDP. The second largest exporter and third largest importer of commercial services, the United Kingdom’s main trading partners are the European Union, the United States and China.
UK’s Economic Strengths
- Relatively fast company formation times.
- Low effective tax rates.
- London is the global leader in financial services.
- London has been voted the best European city for business.
UK’s Economic Weaknesses
- The necessity of forex when trading between GBP and EUR.
- Poor infrastructure.
- Strong competition in the industrial sector.
Once a foreign-owned company is registered in the United Kingdom it is treated the same as any other British company. Also, the United Kingdom strongly protects the rights of its businesses within the European Union.