UK Market

The Federal Republic of Germany is a democratic country and is one of the highly developed market The United Kingdom is a constitutional monarchy composed of the four constituent countries of England, Scotland, Wales and Northern Ireland. UK is a member of the United Nations Security Council (UNSC), the G-8 (Group of eight industrialized countries) and the European Union (EU) and the Commonwealth of Nations. The market structure of the UK followed since the 1980’s has been called the Anglo-Saxon model by many economists which focuses on the tenets of liberalization, free market, low tax rates and minimal government regulation and control. UK is recognized as a nuclear power and is the world’s fifth largest economy. Based on market exchange rates, however, the UK happens to be the fourth largest economy of the world and is the second largest economy in Europe after Germany.

From the emphasis on heavy industries such as shipbuilding, coal mining and steel production after the Industrial Revolution and throughout the 19th century, the emphasis has gradually shifted to the service sector which at present constitutes about 73% of the Gross Domestic Product (GDP) for the country.

Some of the key UK markets would include:

Financial services: the financial services industry is concentrated on the fields of banking and insurance. The Bank of England is the central bank for the whole of the UK. London is the largest financial centre of the world with other important financial landmarks such as the London Stock Exchange (LSE) and the London International Financial Futures and Options Exchange. The LSE is one of the oldest stock exchanges of the world founded as early as in 1801. The Financial Times Stock Exchange (FTSE) 100 Share Index or simply FTSE is most commonly used benchmark for the performance of equities traded on the London Stock Exchange. It consists of the largest 100 companies traded on the LSE based on the amount of market capitalization. These represent about 80% of the value of all issues which are traded on the exchange. Being weighted by the extent of market capitalization, the largest stocks have the greatest influence on the value of the FTSE. The London International Financial Futures and Options Exchange (LIFFE) is also a major component of the financial service market that basically deals with futures and options and commodities contracts. Situated in London, it was modeled according to the Chicago Board of Trade and Chicago Mercantile Exchange. In 2002, LIFFE was acquired by Euronext as part of its strategy to diversify its base for the derivates market and the company has been known as Euronext.liffe since then.

Labour market: The UK labour market performance is closely associated with the performance of the inflation rate or the Gross Domestic Product (GDP) deflator. According to the estimates of the International Labour Organization (ILO), unemployment for the period 1986-1989, decreased from 11.2% to 7.2% with a rise in the inflation rate 3.5% to 7.1%. However, in the decade of the 1990’s both of the measures were found to simultaneously fall. Since 1997, unemployment has continued to fall and inflation has been low. Finally, real wage growth has been relatively healthy and a degree of macroeconomic stability has been achieved. Public sector employment reached a peak for the recent years 5.849 million in the second and third quarters of 2005 with 5.839 million in the second quarter of 2006.

Commodity market: According to the Financial Services Authority (FSA), the commodity markets have attracted a wave of investment opportunities which has seen the commodity markets grow with high record prices, high volatility and high returns. Previously considered to be a specialized market, the new investments have come in the shape of hedge funds, pension funds and even a small number of retail investments.