UK Economic Indicators: UK GDP, UK Interest Rates, UK Inflation Rates, UK Unemployment Rates, UK Economic Data

June 29, 2010United Kingdomby EconomyWatch


The key UK economic indicators are GDP growth, unemployment rate, Bank of England interest rate, inflation rate, 3 month Treasury rate, public debt, and imports and exports.

GDP growth was 1.1 per cent in 2008. In 2009 and 2010 the economy is expected to contract, with GDP growth forecasts of -3.2 per cent and -1.1 per cent.

The Bank of England had cut interest rates to 1.0 per cent by the end of 2008, and that is expected to drop to 0.5 per cent for most of 2009 and 2010.

UK budget deficit stood at 5.3 per cent of GDP in 2008. With economic stimulus packages and bank bailouts being worked on, that is expected to balloon to 11.3 per cent of GDP in 2009 and 13 per cent of GDP in 2010.

In 2008, the UK had the 43rd largest relative national public debt, at 47.2 per cent of GDP. This figure could rise to 58.5 per cent of GDP by 2009 and 70 per cent of GDP in 2010, thanks to the projected budget deficits of 2009-2010.

Inflation had ramped up to 3.6 per cent in 2008, but has dropped back with the economic collapse and is expected to be 0.4 per cent in 2009 and 0.8 per cent in 2010. It had the 58th lowest inflation rate in the world at end 2008.

The 3-month Treasury rate has similarly dropped, from 5.5 per cent in 2008 to an expected 1.3 per cent in 2009 and 2010.

The unemployment rate had reached 6.3 per cent in the UK by the end of 2008 according to the Office of National Statistics, reaching close to 2 million unemployed. This figure is likely to grow to the 2.5 million – 3 million figures, taking unemployment dangerously close to the 8-10 per cent range at end 2008.

Other UK Economic Data

The UK has a population of 61 million and a labour force of 31 million as of 2009.

The UK has the third highest current account deficit in the world. It has a large trade deficit in manufactured goods. Its reserves of oil and gas in the North Sea and coal on the mainland are significant but have passed peak production and are in decline. The UK became a net importer of energy in 2005. It is the ninth largest exporter, with $468.7 billion of exports in 2008, and the sixth largest importer with $654.7 billion of imports. It is the second largest exporter and third largest importer of services, particularly financial services.

It was the second largest recipient of foreign direct investment (FDI) in 2007 according to UNCTAD, and one of the most competitive in Europe for business and personal taxation. London is cited by the European Cities Monitor as the best European business city.

UK GDP, GDP Growth and GDP Per Capita

The UK economy is the fifth largest country economy in the world by real or nominal GDP, and the sixth largest by purchasing power parity (PPP). At the end of 2008, it was estimated to be US$2.279 trillion. The UK is the second largest economy in Europe. The next largest economy in the world, and the largest in Europe, is Germany, which is estimated at US$2.863 trillion.

The UK economy grew 1.1 per cent in 2008, putting it at 187th in the world GDP growth rate league, compared to overall world GDP growth of 3.8 per cent and European Union GDP growth of 1.5 per cent.

The UK’s GDP per capita is $37,400, which makes it the 30th richest country in the world. The European Union average is $33,800 and the world average is $10,500.

UK Industries, GDP Composition by Sector

UK Services Sector – 76.2 per cent of GDPThe services sector dominates the UK economy. In particular banking, insurance and business services dominate. Financial services companies dominated the UK stock market until 2007, accounting for one quarter of all corporate profits.

UK Industry & Manufacturing – 22.8 per cent of GDPBoth manufacturing and energy (4.0 per cent of GDP) have been in long term decline, with Britain now a net importer of energy.

Current industries include machine tools, electric power & automation equipment, transport (trains, shipbuilding, aircraft, motor vehicles and parts), electronics and communications equipment, metals, chemicals, coal, petroleum, paper & paper products, food processing and textiles & clothing.

UK Agriculture – 0.9 per cent of GDPThe UK has a highly efficient agricultural sector by European standards, producing 60 per cent of its food needs. Less than 2 per cent of the workforce is employed in the agricultural sector, or under 500,000 workers.

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