The economy of the United Kingdom is the sixth-largest national economy in the world measured by nominal GDP and

seventh-largestmeasured by purchasing power parity (PPP), and the third-largest in Europe measured by nominal GDP (after Germany and France) and second-largest measured by PPP (after Germany). The UK's GDP per capita is the 20th highest in the world in nominal terms and the 17th highest measured by PPP. The British economy comprises (in descending order of size) the economies of the countries of England, Scotland, Wales andNorthern Ireland. The UK is a member of the Commonwealth of Nations, the European Union, the G7, the G8, the G20, the International Monetary Fund, the Organisation for Economic Co-operation and Development, the World Bank, the World Trade Organisation and the United Nations. In the 18th century the UK was the first country in the world to industrialise,[15] and during the 19th century possessed a dominant role in the global economy.[16] From the late 19th century the Second Industrial Revolution in the United States and the German Empire presented an increasing challenge to Britain's role as leader of the global economy. By the turn of the 20th century the German Empire had vastly outperformed the British economy. The size of the German economy had surpassed the British by 25%. The costs of fighting both the First World War and Second World War further weakened the relative economic position of the UK, and by 1945 Britain had been superseded not only by Germany but by the United States as the world's dominant economic power.[17] However, the UK still maintains a significant role in the world economy.[18][19] The UK is one of the world's most globalised countries.[20] London is the world's largest financial centre alongside New York[21][22][23] and has thelargest city GDP in Europe.[24] As of December 2010 the UK had the third-largest stock of both inward and outward foreign direct investment (in each case after the United States and France).[25][26] The aerospace industry of the UK is the second- or third-largest national aerospace industry, depending upon the method of measurement.[27][28] 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).[29][30] The British economy is boosted byNorth Sea oil and gas reserves, valued at an estimated 250 billion in 2007.[31] The UK is currently ranked fourth in the world (and first in Europe) in the World Bank's Ease of Doing Business Index.[8] Recent

UK exports of goods in 2005 The UK entered a recession in Q2 of 2008, according to the UK Office of National Statistics (ONS) and exited it in Q4 of 2009. The revised ONS figures of November 2009 showed that the UK had suffered six consecutive quarters of negative growth.[46][47] As of the end of November 2009, the economy had shrunk by 4.9%, making the 20082009 recession the longest since records began.[48] In December 2009, the Office of National Statistics revised figures for the third quarter of 2009 showed that the economy shrank by 0.2%, compared to a 0.6% fall the previous quarter.[46] On 23 January 2009, Government figures from the Office for National Statistics showed that the UK was officially in recession for the first time since 1991.[49] It entered a recession in the final quarter of

2008, accompanied by rising unemployment which increased from 5.2% in May 2008 to 7.6% in May 2009. The unemployment rate among 18 to 24-year-olds has risen from 11.9% to 17.3%.[50] Though initially Britain lagged behind other major economies including Germany, France, Japan, and the US which all returned to growth in the second quarter of 2009, the country eventually returned to growth in the last quarter of 2009. On 26 January 2010, it was confirmed that the U.K. had left its recession, the last major economy in the world to do so.[51] In the 3 months to February 2010 the U.K. economy grew yet again by 0.4%.[48] In Q2 of 2010 the economy grew by 1.2% the fastest rate of growth in 9 years. In Q3 of 2010 figures released showed the UK economy grew by 0.8%; this was the fastest Q3 growth in 10 years. It has been suggested that the UK initially lagged behind its European neighbours because the UK entered the 2008 recession later. However, German GDP fell 4.7% year on year compared to the UK's 5.1%, and Germany has now posted a second quarterly gain in GDP.[52] Commentators suggest that the UK suffered a slightly longer recession than other large European countries, as a result of government policy dating back to the policies of the Thatcher government of 1979, in which UK governments have moved away from supporting manufacturing and focused on the financial sector.[53][54][55] The OECD predicts that the UK will grow 1.6% in 2010. The unemployment rate recorded by the Labour Force Survey fell in the fourth quarter of 2009,[56] the first of the big 3 economies in the EU to do so. Gross Domestic Product (GDP) decreased by a (second revision) figure of 0.2% in the third quarter of 2009, after a decrease of 0.6% in the second quarter, according to the Office for National Statistics (ONS).[46] There was a 2.4% decline in the first quarter of 2009. The economy has now contracted 5.9% from its peak before the recession began, the BBC reports.[57] In October 2007, the International Monetary Fund (IMF) had forecast British GDP to grow by 3.1% in 2007 and 2.3% in 2008.[58]However, GDP growth slowed to a fall of 0.1% in the AprilJune (second) quarter of 2008 (revised down from zero).[59] In September 2008, the OECD forecast contraction for at least two quarters for the UK economy, possibly severe, placing its predicted performance last in the G7 of leading economies.[60] Six quarters later the UK economy was still contracting, placing a question mark over OECD forecasting methods. It has been argued that heavy government borrowing over the past cycle has led to a severe structural deficit, reminiscent of previous crises, which will inevitably exacerbate the situation and place the UK economy in an unfavourable position compared to its OECD partners as attempts are made to stimulate recovery, other OECD nations having allowed greater room for manoeuvre thanks to contrasting policies of relatively tighter fiscal control prior to the global downturn.[61] In May 2009 the European Commission (EC) stated: "The UK economy is now clearly experiencing one of its worst recessions in recent history." The EC expected GDP to decline 3.8pc in 2009 and projected that growth will remain negative for the first three quarters of 2009. It predicted two quarters of "virtual stagnation" in late 2009-early 2010, followed by a gradual return to "slight positive growth by late 2010".[62] The FTSE 100 and FTSE 250 rose to their highest levels in a year on 9 September 2009 with the FTSE 100 breaking through 5,000 and the FTSE 250 breaking through 9,000. On 8 September the National Institute of Economic and Social Research believed that the economy had grown by 0.2% in the three months to August, but was proved wrong. In its eyes the UK recession was officially over, although it did warn that "normal economic conditions" had not returned. On the same day, figures also showed UK manufacturing output rising at its fastest rate in 18 months in July.[63] On 15 September 2009 the EU incorrectly predicted the UK is expected to grow by 0.2% between July and September, on the same day the governor of the Bank of England, Mervyn King said the UK GDP is now growing.[63] Unemployment has recently fallen in Wales.[63]

Many commentators in the UK were certain that the UK would leave recession officially in Q3, believing that all the signs showed that growth was extremely likely, although in fact government spending had been insufficient to rescue the economy from recession at that point. Figures in fact showed no growth in retail sales in September 2009, and a 2.5% decline in industrial output in August.[57] The revised UK figures confirmed that the economy shrank in Q3 of 2009 by 0.2%, although government spending on cash for the car scrappage scheme helped. Yet this temporary lapse was followed by a solid 0.4% growth in the Q4. UK manufacturers' body, the EEF, appealed for more cash from the government: "Without an extension of support for business investment in the pre-Budget statement next month, it will be difficult to see where the momentum for growth will come from."[64] Moody's, an American credit rating organisation, gave the UK an AAA credit rating in September 2010, forecasting stable finances largely driven by governmental action. It also reported that the economy is flexible to grow in the future and that household debts and poor exports were large growth-reducing factors, as well as its financial sector.[65] The UK entered its worst recession since World War II in 2008.[46] However the UK economy grew by 1.2% in Q2 of 2010 and 0.8% in Q3, the fastest consecutive growth in over 10 years, accelerating from the 0.4% growth recorded in Q1 of 2010 and 0.4% growth in Q4 of 2009. However, the UK economy shrunk 0.5% in Q4 of 2010 after the UK had its coldest December on record.[66] The UK economy grew by 0.4% in the first three months of 2011, reducing the risk of a double-dip recession. Q2 brought little growth of first 0.3% but then revised down to 0.1%. This was followed by 0.5% in Q3.[67] In 2011 the UK's economy has grown only 1.0%.[68] Macroeconomic trend

This is a table of the trend of gross domestic product of United Kingdom at market prices estimated by the International Monetary Fund with figures in millions of pounds sterling.[clarification needed] Inflation index Per Capita Income (2000=100) (as % of USA)

Year Gross domestic product US dollar exchange[70]

1925 4,466

0.21

61.79

1930 4,572

0.21

66.08

1935 4,676

0.20

85.67

1940 7,117

0.26

74.28

1945 9,816

0.25

50.93

1950 13,162

0.36

38.26

1955 19,264

0.36

42.54

1960 25,678

0.36

47.86

1965 35,781

0.36

49.96

1970 51,515

0.42

11

44.04

1975 105,773

0.45

20

55.54

1980 230,695

0.42

43

78.57

1985 354,952

0.77

60

46.84

1990 557,300

0.56

76

76.62

1995 718,383

0.63

92

71.84

2000 953,576

0.65

100

72.29

2005 1,209,334

0.54

107

90.17

For purchasing power parity comparisons, the US Dollar is exchanged at 0.66.

Businesses in UK

Construction industry of the United Kingdom The construction industry of the United Kingdom contributed gross value of 64,747 million to the UK economy in 2004.[1] The industry employed around 2.2 million people in the fourth quarter of 2009.[2] There were around 194,000 construction firms in Great Britain in 2009, of which around 75,400 employed just one person and 62 employed over 1,200 people.[2] In 2009 the construction industry in Great Britain received total orders of around 18.7 billion from the private sector and 15.1 billion from the public sector.[2] Agriculture in the United Kingdom uses around 71% of the country's land area and contributes about 0.6% of its gross value added. The UK produces less than 60% of the food it eats and the industry's share of the national economy is declining. Despite skilled farmers, high technology, fertile soil and subsidies, which primarily come from the European Union, farm earnings are low and falling, mainly due to low prices at the farm gate. With each generation, fewer young people can afford the increasing capital cost of entry into farming and more are discouraged by low earnings. The average age of the British farm holder is now 59. Recently there have been moves towards organic farming in an attempt to sustain profits, and many farmers now supplement their income by diversifying activities away from pure agriculture. Now, biofuels present new opportunities for farmers against a background of rising fears about fossil fuel prices, energy security, energy sustainability, and climate change. There is increasing awareness that farmers have an important role to play as custodians of the British countryside and wildlife. The high cost of entry into farming presents a significant barrier. Land prices in the United Kingdom are high. Local authorities recognise this and some offersmallholdings intended to allow those with skill or training but little capital to set up as tenant farmers. Nevertheless, this provision is shrinking and there is an increasing shortage of farmland to let. Forestry in the United Kingdom The United Kingdom[Notes 1] is a good place to practise forestry, because the British Isles are ideal for tree growth, thanks to their mild winters, plentiful rainfall, fertile soil and hill-sheltered topography.[1] Growth rates forbroadleaved (hardwood) trees exceed those of mainland Europe, while conifer (softwood) growth rates are three times those of Sweden and five times those ofFinland.[1] In the absence of people, much of Great Britain would be covered with mature oaks, except for Scotland.[2] Although conditions for forestry are good, trees do face damage threats arising from fungi, parasites and pests. Nowadays, about 10% of Britain's land surface is wooded.[3] This area is increasing. The country's supply of timber was severely depleted during the Firstand Second World Wars, when imports were difficult, and the forested area bottomed out at under 5% of Britain's land surface in 1919.[4] That year, theForestry Commission was established to produce a strategic reserve of timber. However, the recovery is still very much in progress. European countries average 25% of their area as woodland.[5] Of the 23,000 square kilometres (8,900 sq mi) of forest in Britain, around 40% is state-owned and 60% is in the private sector.[6][Notes 2] More than 40,000 people work on this land.[6] Broadleaves account for 29% of Britain's woodlands, the rest being conifers, but considering only England, the figures are 55% broadleaf and 45% conifer. Britain's native tree flora comprises 32 species, of which 29 are broadleaves.[7] Britain's industry and populace uses at least 50 million tonnes of timber a year.[6] More than 75% of this is softwood, and Britain's forests cannot supply the demand; in fact,

less than 10% of the timber used in Britain is home-grown.[8] Paper and paper products make up more than half the wood consumed in Britain by volume.[8] Engineering and allied industries Engineering and allied industries comprise the single largest sector, contributing 30.8% of total Gross Value Added in manufacturing in 2003. Within this sector, transport equipment was the largest contributor, with 8 global car manufacturers being present in the UK. These include British makers now owned by overseas companies such as BMW (MINI, Rolls-Royce), Tata (Jaguar-Land Rover),Volkswagen (Bentley) and General Motors (Vauxhall Motors) and plants making vehicles under foreign ownership and branding such as Honda, Nissan and Toyota with a number of smaller, specialist manufacturers (including Lotus and Morgan) and commercial vehicle manufacturers (including Leyland Trucks, LDV, Alexander Dennis, JCB, the main global manufacturing plant for the Ford Transit,Manganese Bronze and Case-New Holland) also being present. The British motor industry also comprises numerous components for the sector, such as Ford's diesel engine plant in Dagenham, which produces half of Ford's diesel engines globally. A range of companies like Brush Traction and Hunslet manufacture railway locomotives and other related components. Associated with this sector are the aerospace and defence equipment industries. The UK manufactures a broad range of equipment, with the sector being dominated by BAE Systems, which manufactures civil and defence aerospace, land and marine equipment; VT Group, one of the world's largest builders of warships; and GKN and Rolls Royce, who manufacture aerospace engines and power generation systems. Commercial shipbuilders include Harland and Wolff, Cammell Laird, Abels, Barclay Curle and Appledore. Companies such as Princess, Sealine, Fairline Boats and Sunseeker are major builders of private motor yachts. Another important component of engineering and allied industries is electronics, audio and optical equipment, with the UK having a broad base of domestic firms, alongside a number of foreign firms manufacturing a wide range of TV, radio and communications products, scientific and optical instruments, electrical machinery and office machinery and computers. Chemicals and chemical-based products are another important contributor to the UK's manufacturing base. Within this sector, the pharmaceutical industry is particularly successful, with the world's second and third largest pharmaceutical firms (GlaxoSmithKline and AstraZeneca respectively) being based in the UK and having major research and development and manufacturing facilities there. Mining and quarrying The Blue Book 2006 reports that this sector added gross value of 21,876 million to the UK economy in 2004.[72] 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%).[86] In 2009, the UK produced 1.5 million barrels per day (bbl/d) of oil and consumed 1.7 million bbl/d.[87] Production is now in decline and the UK has been a net importer of oil since 2005.[87] As of 2010 the UK has around 3.1 billion barrels of proven crude oil reserves, the largest of any EU member state.[87] In 2009 the UK was the 13th largest producer of natural gas in the world and the largest producer in the EU.[88] Production is now in decline and the UK has been a net importer of natural gas since 2004.[88] In 2009 the UK produced 19.7 million tons of coal and consumed 60.2 million tons.[86] In 2005 it had proven recoverable coal reserves of 171 million tons.[86] 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).[89] Based on current UK coal consumption, these volumes represent reserves that could last the UK between 200 and 400 years.[90]

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.[91][92] Healthcare Healthcare in the United Kingdom is a devolved matter, meaning England, Northern Ireland, Scotland and Wales each have their own systems of private and publicly-funded healthcare, together with alternative, holistic and complementary treatments. Each country having different policies and priorities has resulted in a variety of differences existing between the systems.[1][2] That said, each country provides public healthcare to all UK permanent residents that is free at the point of need, being paid for from general taxation. In addition, each also has a private healthcare sector which is considerably smaller than its public equivalent, with provision of private healthcare acquired by means of private health insurance, funded as part of an employer funded healthcare scheme or paid directly by the customer, though provision can be restricted for those with conditions such as AIDS/HIV.[3] Taken together, the World Health Organization, in 2000, ranked the provision of healthcare in the United Kingdom as fifteenth best in Europe and eighteenth in the world.[4][5] Overall, around 8.4 per cent of the UK's gross domestic product is spent on healthcare, which is 0.5% below theOrganization for Economic Co-operation and Development average and about one percent below the average of the European Union.[6] Financial and business services This industry added gross value of 86,145 million to the UK economy in 2004.[72] The UK's exports of financial and business services make a significant positive contribution towards the country's balance of payments. London is a major centre for international business and commerce and is one of the three "command centres" of the global economy (alongsideNew York City and Tokyo).[21][23][100][101] There are over 500 banks with offices in London, and it is the leading international centre for banking, insurance, Eurobonds, foreign exchange trading and energy futures. London's financial services industry is primarily based in the City of Londonand Canary Wharf. The City houses the London Stock Exchange, the London International Financial Futures and Options Exchange, theLondon Metal Exchange, Lloyds of London, and the Bank of England. Canary Wharf began development in the 1980s and is now home to major financial institutions such as Barclays Bank, Citigroup and HSBC, as well as the UK Financial Services Authority.[102][103]) London is also a major centre for other business and professional services, and four of the six largest law firms in the world are headquartered there.[104] Several other major UK cities have large financial sectors and related services. Edinburgh has one of the large financial centres in Europe[105]and is home to the headquarters of the Royal Bank of Scotland Group and Standard Life. Leeds is now the UK's largest centre for business and financial services outside London,[106][107][108] and the largest centre for legal services in the UK after London. Tourism The United Kingdom is the world's 6th biggest tourist destination, with 24.8 million visiting in 2003. US$17.2 billion was spent in the UK by tourists. VisitBritainrecently released data showing that the US remains the most-valuable inbound market, with American visitors spending 2.1bn in 2010.[2] Nevertheless, the number of travellers originating from Europe is larger than those travelling from North America - 21.5 million compared to 3.5 million American/Canadian visitors.