United Kingdom

The UK is a member of the UN Security Council and one of the creators of NATO and the Commonwealth. In keeping with this international attitude, the country also pursues a worldwide foreign policy strategy. The UK carefully contemplates its degree of involvement with the rest of Europe; the UK chose not become a member of the Economic and Monetary Union of the EU. In regard to its constitutional reforms, in 1999 the Scottish Parliament and the National Assembly for Wales were created.

Main Airports

Gatwick (LGW) , Heathrow (LHR), Manchester (MAN)

U.S. Embassy

24 Grosvenor Sq., W1A 1AE, London
tel. [44] (207) 499-9000

Statistics

GDP: purchasing power parity:

$1.83 trillion (2005 est.)

GDP - real growth rate:

1.8% (2005 est.)

GDP - per capita: purchasing power parity:

30,300 (2005 est.)

Inflation rate (consumer prices):

2.1% (2005 est.)

Labor force:

30.07 million (2005 est.)

Exports:

$372.7 billion f.o.b. (2005 est.)

Exports - partners:

US 15.1%, Germany 10.5%, France 8.9%, Ireland 7.3%, Netherlands 5.5%, Belgium 5%, Spain 4.4% (2005)

Imports:

$483.7 billion f.o.b. (2005 est.)

Imports - partners:

Germany 12.8%, US 8.7%, France 7.1%, Netherlands 6.6%, China 5%, Belgium 4.6%, Norway 4.7%, Italy 4% (2005)

Population:

60,609,153 (July 2006 est.)

Population growth rate:

0.28% (2006 est.)

Population Below Poverty Line:

17% (2002 est.)

Major Industries:

machine tools, electric power equipment, automation equipment, railroad equipment, shipbuilding, aircraft, motor vehicles and parts, electronics and communications equipment, metals, chemicals, coal, petroleum, paper and paper products, food processing, textiles, clothing, other consumer goods

Employing Workers: 17*

Registering Property: 19*

Enforcing Contracts: 22*

Closing a Business: 10*

*2006 World Bank rank out of 175 countries

Starting a Business

The table below shows the number of steps and the amount of time needed to start a business, on average

Indicator	United Kingdom	Region
Procedures (number)	6
Time (days)	18

United Kingdom Risk Assessment

Country Rating

Rating: A1

The political and economic situation is very good. A quality business environment has a positive influence on corporate payment behaviour. Corporate default probability is very low on average.

Risk Assessment

Despite a slowdown in the fourth quarter, economic growth remained strong in 2007. Households increased their spending encouraged by strong job creation notably in services (3/4 of GDP) and construction. Public spending remained dynamic with much ground to make up as regards public health, education and infrastructure, which has contributed to a continuing large public sector deficit.

The British economy will be markedly less dynamic this year due mainly to sharp slowdown of both household consumption and investment. Households will be faced with a slower pace of job creation in the public and financial spheres, which will not, however, result in increased unemployment, due to easing immigration. The slow growth of disposable income, attributable to persistent inflationary pressures and substantial wage moderation in both the public and private sectors, will be more difficult to offset through borrowing. Despite a reduction in the Bank of England's key rate, credit will become both more expensive and less available with financial institutions, aware of the sharp increase in personal bankruptcies in 2007, exercising greater caution. A decline in housing prices would moreover hinder the mortgage equity withdrawals that currently represent six per cent of disposable income. In this context, residential construction could well decline particularly for assets intended for rental purposes — where profitability has deteriorated substantially — as well as for the high end affected by the reduction of the bonuses distributed in the financial sector of the City. Office construction will slow due to the slowdown in services. Ongoing preparations for the 2012 Olympic Games along with the continuing dynamism of school, hospital, and road and rail infrastructure construction will only partly offset that trend. Only the performance of goods exports, despite the flagging dynamism of the US market (15 per cent of sales) and the decline of the dollar, should improve thanks to the weakening of the pound sterling against the euro. That will not suffice, however, to reduce a very large trade deficit only partly offset by the recurrent surplus position of the services and investment income balance.

In 2007, the Coface payment incident index remained satisfactory, bearing out the decline in bankruptcies. Corporate profitability remained high with profits increasing 10 per cent. They could level off in 2008, albeit at a good level, amid a decline in economic activity. Although that will have little effect on large companies in view of their low-debt positions and good cash flow, smaller companies with limited access to the financial market and that rely on adjustable-rate loans in consequence will experience difficulties to varying degrees. The housing and home furnishings (manufacturing and retailing sector) should suffer from the decline in residential investment, even if that can be partly offset by orders from the public sector or related to preparations for the Olympics. Agricultural-product users and processors (breeders, cheese-makers, biscuit-makers, and so on) will enjoy varying degrees of latitude to pass on the rising cost of those products in sales prices to their buyers. That may prove difficult when dealing with mass distribution where a context of sluggish consumption will exacerbate competition. Financial sector sub-contracting will also present higher risk.

STRENGTHS

• The presence of many financial institutions has contributed to the City's influence as Europe's leading financial centre.
• Strong growth potential, moderate taxes, procedural simplicity, and access to the Anglo Saxon world have attracted foreign capital.
• High value-added sectors like pharmaceuticals, biotechnology, electronics and aeronautics are well positioned in the international arena.
• Despite the increase in the working population fuelled by immigration, labour market flexibility and efficient employment agencies have stemmed any increase in unemployment.
• Coverage of three-quarters of energy needs by national hydrocarbon production has kept the trade deficit from widening further.

• The inadequacy of public services in education, research, and transport has undermined productivity.
• Deterioration of public sector finances will not facilitate eliminating the imbalances in public services.
• The surplus in the services and investment income balance has not nearly sufficed to offset the goods trade deficit.
• Northern England, Wales, and Scotland have been unable to bridge the gap with the Greater London region.
• Differences in the level of activity prevailing in financial services, high technologies and property compared to traditional industries has complicated matters in adjusting economic policy.

• Agriculture
• Apparel
• Arts & Crafts
• Automobile
• Bags, Cases & Boxes
• Chemicals
• Computer Hardware & Software
• Construction & Real Estate
• Consumer Electronics
• Electrical & Electronics
• Energy & Environment
• Food & Beverage
• Furniture & Furnishing
• Health & Medicine
• Home Supplies
• Industrial Supplies
• Lights & Lighting
• Machinery
• Mineral & Materials
• Office Supplies
• Security & Protection
• Service
• Sports & Entertainment
• Telecommunications
• Textile
• Toys
• Transportation