BY

J.Kalyan Kiran.
Gunda.Mounika.
 M

The United Kingdom

borders
➔ Ireland by land

➔ Belgium,

➔ Germany,

➔ Denmark,

➔ France,
Sea
➔ Netherlands

➔ Norway
The City of London is the financial hub of the
UK.

➔
Pound- £
➔ 1pound=1.310$=94.559₹
GEOGRAPHY:
DEMOGRAPHICS:
● Other demographics statistics
● Demographic statistics according to the World
Population Review as follows:
● One birth for every 39 seconds.
● One death for every 53 seconds.
● Net gain of one person for every 1 minute.
● One net migrant for every 3 minutes.
 WHY UK?
➔ Uk has produced many great scientist and engineers
including
1.Issac Newton.
2.Charles Darwin.
3.Alexander fleming.
4.Henry Cavendish.
➔ Father of modern economics-Adam Smith.
➔ Presence of such brilliant minds helped british to form firm
fundamental base and knowledge in developement of
economy.
➔ Affluent avaliability of natural resources.
 th
18 Century-Industrial Revolution
●
Britain had LARGE AMOUNTS OF COAL AND IRON which benefited
the Industrial Revolution.
● LARGE LABOUR SUPPLY.

● Government was BUSINESS-FRIENDLY and business people

influenced government to get the PARLIAMENT to PASS LAWS that
HELPED BUSINESS GROW.

● British GOVERNMENT IMPROVED TRANSPORTATION and navy

was used to protect shipping lanes.

●
Britain had CAPITALISTS who were READY to BUILD FACTORIES
and to IMPROVE TRANSPORTATION.
●
Their TEXTILE INDUSTRY made Britain RICH and POWERFUL
industry.
 19th century Imperialism:
● United State saw the possible to have power over foreign
markets and earn enormous amounts of money.
● “The speed and efficiency with which Europeans expanded
prompted many Americans to argue for this European-style
imperialism of conquest and possession”
● British patronised free trade which led to fewer barriers and
tariffs.
● Pre and post world wars,Britan produced tonnes of raw material
such as coal,steel and imported it globally.
● Invented modern railway system and began foreign trade all over
the world.
Great depression(1929-39):
● In 1929 wall street crash affect the International economy.
● The Great Depression was a worldwide economic depression that
lasted 10 years.
●
Its kickoff was “BlackThursday,"October 24, 1929.
● Unemployment Reached to 25% from 3%.
● Price fall ......
● President Franklin D.Roosevelt established program called New Deal.
●
Aimed at helping farmers, like the AAA (AgriculturalAdjustment
Administration).
●
CCC (Civilian Conservation Corps)
●
WPA (Works Progress Administration), attempted to help curb
unemployment by hiring people for various projects.
 NATURE OF
●
ECONOMY:
Mixed Economic System.
(Both state and public sector direct economy.)
●
Thus, Private firms are free to produce and sell the goods
but it would be subject to indirect regulations and control by
government.
●
It induces to monitor the intrest of weaker industry.
●
Today, the UK is the 6th largest economy in the world in
2012 according to GDP .
●
Over-time business have grew and formed different types of
business organisation.
 LONDONVsECONOMY
● Capital of England and UK -LONDON.
● World’s leading financial center alongside
Newyork.
● Most populated city not only in UK but
Europe as a whole.
● About 12.5% of UK’s population reside in
London i.e; 13m appro.(2010).
● London generates 20% of UK’s GDP.
● City of London is home for Bank of England
and London Stock Exchange.
 ECONOMIC SCENARIO
● The United Kingdom is a developed country and has the world's
fifth-largest economy by nominal GDP.
● Ninth-largest economy by purchasing power parity.
●
It has a high-income economy and has a "very high" Human
Development Index, ranking 16th in the world.
● The United Kingdom remains a great power with considerable
economic, cultural, military, scientific and political influence
internationally.
● It is a recognised nuclear weapons state and is sixth in military
expenditure in the world.
 BI-LATERAL REALTIONS
REALTIONS
● A member of the

● Commonwealth of Nations.
● Council of Europe.
● G7.
● G20.
● NATO.
● Organisation for Economic Co-operation and
Development (OECD).
● World Trade Organization (WTO).
 MONETARY POLICY:
● How do they decide what action to take:
Monetary policy committe decides what monetary action to
take and announces policy 8 times a year.
● It has 9 individual members.
●
It can take around 2 years for Monetary Policy to have its full
effect on economy.
● So they need to consider what inflation and growth in economy
are likely to be in next few years.
They explain reasons behind their policy decisions either to
raise/decrease in their quaterly inflation report.
 MONETARY POLICY
COMMITTEE
●
Pre-MPC: MEETING:
Members are breifed on latest data and analysis on
economy including report on business conditions.
●
First meeting:
Discuss most recent economic data.It is held normally on
Thursday a week before annoucement.
●
Second meeting:
Debate what action to take.Normally held on monday before
announcement .
●
Final meeting:
Governor recommends the policy which he believes will be
supported by majority of members and vote.It is held wednesday of that
week.
Monetary Policy Committee announcement:
They publish decision with MINUTES of meeting aat
12 noon on Thursday of that week.
 FISCAL POLICY
● A quick look at some of the key fiscal policy numbers
● In 2017:
●
UK budget (fiscal) deficit was £46 billion, or 2.3 per cent of GDP
(peaked 10.1% in 2009)
● Public sector net debt was 87% of GDP
●
Government debt now stands at £1.8 trillion
●
Debt interest payments last year by the government were £48 billion
●
In 2018, total UK government spending is expected to be £814.0
billion
●
Health care - £150 billion
●
Pensions - £165 billion
●
Education - £85 billion
●
Defence - £47 billion
●
Government spending forecast to be 41% of UK GDP in 2018 (48%
in 2010).
● Main fiscal aims:
● Cut the structural fiscal deficit to below 2% of GDP by 2020-21
●
Achieve a balanced budget (G=T) by the middle of the next
decade
● Unemployment is closing in on 4% of the labour force and by
most estimates, the UK economy is close to productive potential
as measured by the output gap.
● Normally at this stage of the economic cycle, the government
would expect to be running either a balanced budget or even a
surplus.
● But the UK continues to run a budget deficit – suggesting that
there is structural gap between government spending and tax
revenues.
 MANUFACTURING:
MANUFACTURING
● A map of the major UK cities gives a good picture of where
manufacturing flourished, and often specialisations could be
identified, in particular:
Birmingham, (automotive).
● Glasgow (shipbuilding).
● London (various).
● Manchester (textiles).
● Newcastle (shipbuilding and steel).
● Nottingham (apparel, medicine).
● Sheffield (steel and steel products).
● Sunderland (shipbuilding and coal-mining).
● Leeds (textiles and engineering).
● Belfast (shipbuilding and textiles)
● Cardiff(steel).
 EXPORTS-
●
The UnitedIMPORTS
Kingdom is the 10th largest export
economy in the world.
●
In 2016, the United Kingdom exported $374B and
imported $609B, resulting in a negative trade
balance of $235B.
●
 TOP EXPORTS OF UK
➔ Cars($44.1B).

➔ Packed Medicaments($19.5B).
● .
➔ Gold($14.B).

● Gas Turbines ($13.1B).

Crude Petroleum($12.6B),using the 1992 revision of

the HS (Harmonized System) classification.
➢ The top export destinations:
➔ United States($52B),

➔ Germany($35.5B)

➔ Netherlands($22.5B)

➔ France ($22.4B)

➔ Switzerland($19B).
 TOP IMPORTS OF UK:
● Gold ($50B)
● Cars ($47.5B)
● Turbo-jets ($20.6 billion)
● Packaged Medicaments ($19B)
● Vehicle Parts ($15.5B)
●
Refined Petroleum ($14.6B).
● The top import origins :
● Germany ($88.4B)
● China ($59.8B)
● United States ($46B)
BALNACE OF PAYMENTS(BOP):
● In UK,BOP now a days is always deficit.
●
Bop defict means the current account is -ve which means the
imports is more than exports ie, the capital outflow is more
than capital inflow

BOP=current a/c +capital a/c

BOP have a relationship between compartive
advantage,scarcity and exchange rate.
• Either it may result in defict or surplus.
 SWOT ANALYSIS:
● STRENGTH: ● WEAKNESS:
● Advantageous Trading Position. ● Poor Transport
● High Standard of Education. ● Suboptimal Innovation.
● Plenty of FDI. ● Significant Internal Wealth
● Political Stability. Disparity.
● London Stock Exchange.
● High inflation rates.

● Opportunities: ● Threats:
● New Trade Partners. ● Worker/Business Relocation(over
crowded)
● Migrant Education.
● Competition.
● UK can create tech growth hubs
(t might get a much fairer slice of ● Financial Crisis.
the tech market.)
 GDP(Gross domestic product ) of UK:

➔ Gross domestic product (GDP) is equal to the total expenditures for all
final goods and services produced within the country in a stipulated
period of time

➔ The GDP value of the United Kingdom represents 4.23 percent of the
world economy.
➔ GDP by sector:

Agriculture: 0.6%,Industry: 19.2%,Services: 80.2%

 GNP(Gross Net Product) of UK:

➔ Gross National Product in the United Kingdom increased to 511762 GBP

Million in the first quarter of 2018 from 505883 GBP Million in the fourth
quarter of 2017.
➔
● Two men live alone on an isolated island.
● To survive they must undertake a few basic economic
● activities like water carrying, fishing, cooking and shelter construction and
maintenance. The first man
● is young, strong, and educated. He is also, faster, better, more productive a
everything. He has an
● absolute advantage in all activities. The second man is old, weak, and
uneducated. He has an
● Despite the fact that the younger man has absolute advantage in all
activities, it is not in the interest of
● either of them to work in isolation since they both can benefit from
specialization and exchange. If the two men divide the work according to
comparative advantage then the young man will specialize in tasks at which
he is most productive, while the older man will concentrate on tasks where
his
● productivity is only a little less than that of the young man. Such an
arrangement will increase total
● production for a given amount of labor supplied
● by both men and it will benefit both of them.
BY
J.Kalyan Kiran.
Gunda.Mounika