The United Kingdom has the sixth-largest economy in the world, is the third-largest economy in the European Union, and is a major international trading power. A highly developed, diversified, market-based economy with extensive social welfare services provides most residents with a high standard of living. Unemployment and inflation levels are amongst the lowest within the European Union.
The United Kingdom’s economy was hit by turmoil in the financial markets. It entered a recession in the third quarter of 2008, accompanied by rising unemployment which increased from 5.2% in January 2008 to 7.9% in July 2009. In response, the British Government implemented a wide-ranging stability and recovery plan that included a fiscal stimulus package, bank recapitalization, and credit stimulus schemes.
London remains a leading international financial center, but has been affected by recent financial market turbulence. London banks have laid off workers and many have scaled back their international operations. Two U.K. banks, Northern Rock and Bradford & Bingley, have been nationalized while the British Government has taken a significant share in two others. London’s financial exports contribute greatly to the United Kingdom’s gross domestic product, but its contribution is expected to be considerably lessened in the next few years. London is a global leader in emissions trading and is home to the Alternative Investment Market (AIM). It is also a government priority to make London the leading center of Islamic finance.
The United Kingdom is the European Union's only significant energy exporter. It is also one of the world's largest energy consumers, and most analysts predict a shift in U.K. status from net exporter to net importer of energy by 2020, possibly sooner. Oil production in the U.K. is leveling off. While North Sea natural gas production continues to rise, gains may be offset by ever-increasing consumption. North Sea oil and gas exploration activities are shifting to smaller fields and to increments of larger, developed fields, presenting opportunities for smaller, independent energy operators to become active in North Sea production.
Information by U.S. Department of State
United Kingdom Gallery
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