UNITED KINGDOM / SALARY

Introduction

The United Kingdom is an island in the northwest of Europe. The country is made up of Scotland, Wales, England, and Northern England. London can be termed as a financial center and is well known as a cultural place. The United Kingdom is also the birthplace of Shakespeare and the best universities such as Oxford and Cambridge.

The United Kingdom is the fifth-largest in terms of economy globally. The United Kingdom has a market-oriented and social market economy. The currency used for transactions is the sterling pound. The guide will help you learn about the United Kingdom's economy as per the various sectors, the GDP, and its employment sector.

GDP

United Kingdom nominal GDP in 2021 stands at $3.12 trillion, and for 2020 the GDP stood at $3.17 trillion. Over the years 2009 to 2020, the GDP level has tremendously risen. However, in the first half of 2020, the GDP fell by 22.6%, which was the worst drop in the United Kingdom's history. The fall was worse than any other European country. The main reasons behind the fall include

• Temporarily ban non-essential businesses

• Travel bans in the United Kingdom

• A reduction of the interest rate to 0.1 % by the BoE

• Temporarily lay off of the British Workforce

From the period between June to December 2020, the UK lifted some restrictions, and economic growth rose. However, that was cut short due to a lockdown imposed in December. The total decrease of GDP in the year 2020 was 9.9%

United Kingdom has a nominal GDP per capita of $46,344 for 2021, thus being ranked as the 21st in the world. The GDP in terms of purchasing power parity stands at $47,089, ranking it as the 22nd globally. The GDP per sector for various economic sectors is as follows.

• 0.6% for Agriculture

• 19.2% for Industries

• 80.2% for Services

Economic sector

The following sectors have achieved vast economic growth.

• Agriculture

The United Kingdom is able to produce 65 percent of the food that the people consume. The agriculture sector significantly boosted its economy by creating job opportunities in forestry, fishing, and hunting industries. Agriculture had a substantial economic growth addition of £12.18 billion. The agriculture sector contributes to 0.6 % of the United Kingdom Nominal GDP.

• Manufacturing

In 2011 the United Kingdom hired around 2.6 million. The sector also led to a gross value of around £140,539 million. In 2008 the United Kingdom was ranked as the 6th largest manufacturer globally. The UK automotive sector had a £52.5 billion turnover and made £26.6 billion of exports during that period. Other leading industries in the United Kingdom manufacturing Centre include the pharmaceutical and aerospace industry, which have resulted in many job opportunities and an increase in exports.

• Financial and business services

In 2011 the gross value added by the United Kingdom finance services industry economy was £116,363 million. London is the leading Centre of banking, and it has over 500 banks. The bank's main activities include banking, foreign exchange trading, insurance, Eurobonds, and energy futures. The United Kingdom is the home to some of the largest financial organizations such as Barclays Bank, HSBC, Citigroup, standard life Leeds, NatWest Group, and Lloyds Banking Group.

• Real estate, and renting activities

Some of the popular real estate firms in the UK include the Peel Group, Land Security, and British Land. In 2008 the real estate market boomed; however, in some of the areas, the price fell. The primary reasons attributed to the increase in property prices include.

• Low-interest rates

• Economic growth in the UK

• Property investment by foreigners

• Planning limits of supply of new housing

The cost of property has doubled where we find that in 1997 an average household cost 3.6 times of the annual earnings, while in 2017 it cost 7.6 times the annual earnings. Renting activities has led to an increase in United Kingdom GDP. Estimates in 2014 show that if every person paid house rent, it would account for 12.3% of the GDP.

Employment

The retail and wholesale trade sector is the largest employer, having employed around 5.2 million people. The industries are closely followed by support service activities and the administrative industry with about 3.1 million employees.

The unemployment was relatively low before the Covid 19 Pandemic. However, the level of unemployment has begun to fall. During the first quarter of 2021, the unemployment rate was 5.1%, while in the second quarter, the unemployment rate was 4.7 percent.

Exports and Imports

In 2019 United Kingdom’s exports were $837 billion. The goods exported include chemicals, fuels, beverages, tobacco, and manufactured goods. The main export partners for the United Kingdom are the United States, China, Switzerland, and the European Union.

In 2018 United Kingdom's imports were $ 876.6 billion. The primary imported goods include machinery, fuel, foodstuffs, and manufactured goods.

Inflation

The average inflation rate in the United Kingdom in 2020 was 0.85 %. Before the Covid 19 Pandemic, the inflation rate was around 2 %. However, the inflation rate has begun to rise, with the bank of England aiming to have inflation of about 2 percent. The best way to curb inflation is raising the interest rates by the Bank of England. The loans and mortgage interest will rise. People will have less money to spend, leading to a drop in demand and a price increase.

Conclusion

Economic sectors which have led to high growth include the service sector, which has increased its GDP by 79%. The financial industry is also equally important. The United Kingdom is the home of London which is ranked as the second-largest financial Centre globally. It's also the fifth exporter and importer globally. Based on the information, the United Kingdom's economy is good.