United Kingdom

The light green area is the European Union

The UK is the sixth-largest economy in the world and third in Europe. But its prominence in the global economy is even greater than these rankings suggest because of its openness to trade and high level of development both economically and financially. London is the second most important world financial centre after New York and has the largest GDP of any city in Europe. Of the world's 500 largest companies, around 26 are headquartered here. The service sector contributes around 80 percent of GDP (financial services contributing 6.9 percent of GDP and 3.1 percent of all UK jobs.) The UK also has the second largest aerospace industry and the tenth largest pharmaceutical industry. It has been a net importer of energy since 2005 despite large oil reserves remaining in the North Sea (2.8bn barrels in 2016). The UK was the first country to industrialise and was the leading economy in the 19th and early 20th centuries. Benefitting from natural resources, particularly coal, the economy transitioned from agriculture to industrial production and trade. Its position was weakened by the two World Wars and accompanying debt, but along with the US played the key role in creating the institutional framework for today's global economy (Bretton Woods). The global financial crisis and resulting slowdown compounded domestic problems of falling house prices and high consumer debt leading to recession in 2008/9. Government finances also came under pressure with public debt increasing from 42 to 75 percent of GDP between 2007 and 2010. In 2010, the Conservative-led coalition with the Liberal Democrats initiated an austerity program, which was continued by the conservative government that followed. A subsequent conservative government indicated a return to spending, investment and a “new decade of renewal”. In June 2016, the UK voted via referendum to leave the EU but numerous delays to the exit agreement created political and economic uncertainty. The pound depreciated while exports, investment and consumer spending reduced. Critics argue that Brexit will jeopardise the importance of London as a global financial centre, but proponents counter that the UK will emerge stronger as a leading global free trade centre. By late 2019, the UK had already concluded close to 20 free-trade agreements to take effect post-brexit.

What free trade areas or economic unions is it a member of?

None