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This report analyzes the political, economic, social, technological, legal and environmental
(PESTLE) structure in United Kingdom. Each of the PESTLE factors is explored in terms of
current strengths, current challenges, current opportunities and current threats.

The United Kingdom of Great Britain and Northern Ireland is situated on the British
Isles, a large group of islands lying off the north-western coast of Europe. The total area
of the United Kingdom is 244 square kilometers.
Great Britain is situated in the temperate zone of Europe. The nature of Great Britain is greatly
affected by the sea. The territory of UK can be divided in four areas England, Wales, Scotland
and Ireland. The coastline of Great Britain is greatly indented, especially in the west and north-
west where the mountains come close to the coast. Great Britain enjoys the humid and mild
marine West-Coast climate with cold winters and warm summers and a lot of rainfall
throughout the year. The prevailing winds blow from the south-west. The south of England is
often called the "Garden of England", because there are many gardens and orchards there.
United Kingdom currently has political stability; it has good bilateral ties with many
countries but currently has tensed relationship with European Union.
In United Kingdom constitutional monarchy framework is followed in which Monarch is the
head of state and the Prime Minister is the head of government. Currently Queen Elizabeth is
serving as a monarch and David Cameron is acting as Prime Minister. Following the May 2010
general election, the political situation in the country is stable. In 2010 election Conservative
party headed by David Cameron won the election against the major contender Labor party and
Liberal Democrat party In the earlier election Labor party headed by Tony Blair won the
election by full majority.
The UK is one of 27 member states of the European Union (EU) and is subject to EU
legislation but UK is not part of the euro zone. The chances of its joining EU has further

decreased after UK blocked proposed changes to the EU Lisbon treaty aimed at addressing
the crisis in the euro zone, which by the autumn of 2011 had reached an acute phase. As per
the survey of 2008, UK is the 8
most politically stable place to live in because there is less
risk of military invasion. Australia has the strongest relationship politically and on economic
matters with UK.
The UK, a leading trading power and financial center, is the third largest economy in
Europe after Germany and France. Over the past two decades, the government has
greatly reduced public ownership and contained the growth of social welfare programs.
Agriculture is intensive, highly mechanized, and efficient by European standards, producing
about 60% of food needs with less than 2% of the labor force. The UK has large coal, natural
gas, and oil resources, but its oil and natural gas reserves are declining and the UK became a
net importer of energy in 2005. Services, particularly banking, insurance, and business
services, account by far for the largest proportion of GDP while industry continues to decline in
In 2008, however, the global financial crisis hit the economy particularly hard, due to the
importance of its financial sector. Sharply declining home prices, high consumer debt, and the
global economic slowdown compounded Britain's economic problems, pushing the economy
into recession in the latter half of 2008 and prompting the government to implement a number
of measures to stimulate the economy and stabilize the financial markets. In 2010 government
initiated a five-year austerity program, which aimed to lower London's budget deficit from over
10% of GDP in 2010 to nearly 1% by 2015. GDP fell 0.1%, budget deficit remained high at
7.7% of GDP and debt continued to increase.
The aging population, Ethnic and religious differences these days is concern for the UK
government but the literacy rate in UK is their power.
The impact of terrorism and political violence has been a major issue in British life over many
years. The complexity of cultural and social interaction in Britain leads to discussions of race,
ethnicity and deprivation amongst minority groups. The status and problems of minorities are a
continuing challenge for British governments despite efforts to produce a more inclusive
society, which is an ambition, shared by all the major political parties. An added dimension is
the apparent growth of race-related crime and the role of various minority groups.

Literacy rate in UK is near to 100% and government wants to increase their investment on
Education services as it is one of their most important exports. Furthermore there is no
difference on the basis of sex in employment area.
The European Innovation Scoreboard 2008 ranks the UK one of the innovation leaders,
with innovation performance well above that of the EU average and all other countries.
The UK has a strong track record in science and innovation. It possesses four of the worlds
top six universities, and a research base that is now second only to the US in the G8 group of
countries for excellence, producing 12% of all cited papers and 14% of the most highly cited
papers. The UK is also recognized as one of Europes Innovation Leaders.
For over a decade, Government policy has consistently supported the development of the UKs
scientific and technological capabilities. This has been underpinned by record levels of
investment in science of over GBP 40 billion.
Since the early 1990s, the UK has made noteworthy progress in dealing with number
environmental pressures from economic growth.
It achieved strong decoupling for major air pollutants and CO2, for water withdrawals and for
agrochemical consumption. This progress reflects both the reshaping of the economy and the
strengthening of UK environmental policies in the EU context. The UK is committed at the
highest level of government to environmental protection and sustainable development. Yet, it
could still improve its ranking among OECD and EU countries with respect to a number of
indicators of environmental pressure intensity.


Key Facts and Geographic Location 1
Key facts 1
PESTLE Analysis 2
Summary 2
Political Analysis 4
Overview of UK Political System 4
Election, Political Parties and their Current Representation 6
General Election of 2010 8
Current Strength and Opportunity 8
Current Weakness and Threats 10
Economic Analysis 13
Overview of UK Economic 13
Type of Economic System 14
Government Intervention in Market 15
Comparative Advantage in UK 16
Exchange Rate and Stability of UK currency 19
Financial Markets 20
Infrastructure Quality 20
Business Cycle Stage and Economic Growth 21
Skill Level of Workforce 22
Labor Costs 23
Unemployment Rate, Inflation Rate and Interest Rate 24

Social Analysis 26
Overview of UK social system 26
Demographic Characteristics 26
Class Structure and Education 29
Culture 30
Entrepreneurial spirit 31
Health and Environment 31
Technological Analysis 33
Overview of UK Technological and Scientific Environment 33
Innovation in Macro Economy 33
Important Scientific Researches by UK scientist 35
UK society and Technology 36
Nobel Laureates 36
UK Vision for Future Technologies 37
Legal Analysis 38
Consumer Protection Legislation 40
Employee Protection Legislation 41
Competition legislation 42
Environmental Analysis 43
Overview of Environment in UK 43
Carbon Dioxide Emissions 44
Ecological Footprint 44
Environmental Issues in UK 44
Key Environmental Regulation 44
Current Threat 45
Conclusion 46
Bibliography 48