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2020/08/21 18:25:58

Economy of Great Britain

Content

GDP

2020: Recession of GDP in the second quarter for-20.4%

The vl against the background of a pandemic of COVID-19 of Great Britain observed the 2nd quarter 2020 the strongest economic downturn in Europe of-20.4% in a quarter.

2019: Recession in the 2nd quarter

2018: 3.29% of world GDP, the 5th place in the world

Shares of the countries on nominal GDP in world economy in 2018
The leading countries by the amount of nominal GDP in 2018

2011-2012: Double recession for the first time from the 1970th

In the first quarter 2012 of GDP of Great Britain it was reduced by 0.2 percent, and in the fourth quarter 2011 - for 0.3 percent. Thus, the British economy appeared in technical recession, and the second every three years. The last case of "double recession" in the country was observed in the 1970th years.

Financial system

Modern monetary theory

Main article: Modern Monetary Theory (MMT)

Financial policy of the country corresponds to the Modern Monetary Theory (MMT).

Key interest rate

Interest rates of the central banks in Europe, July, 2020

National debt

One of the main difficulties of economy of Great Britain as of 2012 is national debt volume. Till 2008 the debt of the country was about 45 percent of GDP - one of the best indicators in Western Europe at that time.

2020

The national debt of Britain for the first time in the history exceeded £2 trillion

On August 21 it became known that the public debt of Britain for the first time in the history exceeded 2 trillion. By the end of July it made £2.004 trillion that corresponds 100.5% of GDP of the country that is a record since the 1960s, the Office for National Statistics reports.

According to it, in a year the national debt grew by £227.6 billion because of increase in budget expenses at fight against crisis and COVID-19 pandemic effects.

Britain continues to sustain losses because of crisis of a coronavirus. GDP dropped by record 20.4% in the second quarter 2020 of rather same period of the 2019th. It became the second quarter falling in a row after its recession for 2.2% in the first quarter 2020. In comparison with previous – the fourth – quarter (from October to December) 2019 of GDP of Britain in the second quarter 2020 decreased by 22.1%.

The national debt of Britain for the first time in the history exceeded £2 trillion

Against the background of falling of tax revenues after occurrence of the British economy for the first time for the last 11 years in recession and acceptances of a number of measures for support of business and growth of expenses on social needs the budget deficit in July was £26.7 billion. The volume of loans for the first four months of 2020-2021 financial years (begins in April) reached £150.5 billion.

At the same time each of these four months, reports ONS, set up a record on the volume of loans. Commenting on the published data, the Minister of Finance of Great Britain of Risha Sunak noted that crisis with a coronavirus laid down a heavy burden on public finances, however without large-scale expenses of the government on programs of support the situation would be even worse.

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Today's data are a severe reminder that we will need to return public finances on a strong basis over time that will demand adoption of difficult solutions, – Sunak said.[1]
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The national debt of Britain for the first time in 57 years exceeded GDP

The public debt of Britain for the first time in 57 years exceeded GDP. The data of National bureau of statistics (ONS) published on June 19, 2020 demonstrate to it.

Dynamics of change of the relation of a national debt to GDP of Britain

In May the national debt in Britain reached 1.95 trillion pounds sterling ($2.42 billion) that corresponds to 100.9% of GDP of the country.  The volume of loans of the government in May was 62.7 billion pounds that is a maximum since the beginning of tracking of these data in 1993. The indicator exceeded the level of all financial year which came to the end on March 31. According to the results of the current fiscal year loans can reach record level, experts predict.

The national debt of Great Britain for the first time since 1963 exceeded the volume of GDP of the country

According to them, measures of support of economy in the conditions of the crisis caused by COVID-19 coronavirus pandemic demanded from the government of accumulation of volume of loans.

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Today's data confirm that the coronavirus had a serious impact on our public finances. The best method for recovery of public finances to more steady position — at observance of security measures to open our economy that people could return to work — the Minister of Finance of Great Britain of Risha Sunak said after the publication of data of ONS.
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The volume of the state loans in May, 2020 grew by 49.6 billion  pounds sterling ($61.6 billion)  in comparison with the same period of the 2019th. At the same time receipts in the state budget dropped by 28.4% in comparison with May, 2019, having made 40.7 billion pounds  ($50.5 billion). In this amount about 28.9 billion pounds sterling  ($36 billion) were the share of income from tax deductions.

In 1946-1947 the national debt of Britain reached 258% of GDP.

According to the results of April, 2020 National bureau of statistics  noted record reduction  of GDP — for 20.4%. Totally in three months since February decline in production in the country was 10.4%.[2]

National debt relation to GDP of the country

National debt relation to GDP of the country, 2017.

In May, 2012 the national debt reached 66 percent of GDP.

National debt per capita

For the end of 2018

Currency pound sterling

The volume of pounds in the address for $101 billion

The offer of gold as of August, 2019, makes 8.7 trillion dollars, the offer of US dollar of 1.7 trillion dollars.

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​ Amount of money in the address (in US dollar). Data for 2019]]

Monetary issue and inflation

In 2009 in the middle of financial crisis the British Central Bank started the quantitative easing program. Then the regulator bought up assets of 200 billion pounds.

In October, 2011 the Bank of England expanded the program to 275 billion pounds.

At the beginning of February, 2012 it was decided to print 50 billion more pounds. Thus, during the redemption of assets the Bank of England printed 325 billion pounds sterling. As the reason for the last stage of quantitative easing deceleration of growth rates of economy in 2011 was called. It was supposed that using injection of means it will be possible to support the high prices of assets, including of actions and the real estate and to hold thus economy from slipping in recession.

In May, 2012 it became known that the Committee on monetary policy (Monetary Policy Committee) of the Bank of England voted against further buying up of government bonds using turning on of the press (so-called quantitative easing). In the long term perhaps further expansion of the program of the redemption of assets. Besides, the Central Bank did not begin to raise a refunding rate which is at record-breaking low level in 0.5 percent.

The regulator suspended the press against the background of messages about high inflation. The target objective of this indicator for the Central Bank makes 2 percent until the end of 2012. In March, 2012 growth of consumer prices reached a maximum for the last five months - 3.5 percent[3].

The world harbor for avoidance of taxes

The new analysis of network of tax justice in 2019 showed that Great Britain is the world's largest means of deviation from payment of corporate taxes. The British overseas territories and dependent territories of Corona dominate in the list of the places allowing multinational corporations to avoid payment of a tax. In total it does Great Britain responsible approximately for a third of global risk of tax avoidance.

Health care

2019: The blockchain can kill the tax and medical systems of Britain

At the end of October, 2019 the senior employee of consulting company McKinsey and the expert of Business 5.0 John Straw said that the blockchain can kill the tax and medical systems of Britain. With this forecast of Straw made a speech on behalf of McKinsey and IBM at the recent action of Computing Cloud and Infrastructure Live devoted to the Business 5.0 model. Read more here.

Currency reserves

In comparison with other countries

Budget

2019: Rise of charges of the royal family

How much is keeping of the royal family in Britain

2012: Reduction of budget expenditure and protests of the population

Measures of the government of David Cameron for reduction of budget expenditure became the answer to the economic crisis which affected Great Britain. In particular, the country national debt for the last four years (October, 2012) increased from 45 to 66 percent of GDP, and in the first two quarters 2012 in a row national economy was reduced that happened for the first time in forty years.

On October 20, 2012 about 100 thousand people took part in demonstrations in London, protesting against the plan of the government of the country for reduction of budgeted expenses. Agence France Presse[4] reports about it[4].

The demonstrations organized by the largest labor unions of the country and the organizations of the left sense took place under the slogans "no to reductions", "shame on policy of the Tory" and "Cameron Killed Britain". Protesters expressed opinion that the policy of the government on cost reduction is pursued only for the benefit of elite and endangers the least socially protected groups of citizens.

In general, protest actions took place peacefully, however the police announced separate cases of "antisocial behavior" when several groups of anarchists protested at offices of the large companies, such as McDonald's and Starbucks.

Similar mass demonstrations took place in the capital of Northern Ireland Belfast and the largest city of Scotland of Glasgow.

Energy carriers

Gasoline price

The card of petrol prices in the countries of the world for February 12, 2018

Salaries

Average monthly salary in the countries of Europe and Kazakhstan. Data for 2017

Consumption

Beer

Consumption of beer per capita, given for the beginning of 2019.

Tea

Consumption of tea per capita, kg a year. Data for 2018

Milk

Consumption of milk in liters a year on the person. Data for the end of 2018

Research and development

2019: The seventh place by patents in the world

At the end of April, 2020 the World Intellectual Property Organization (World Intellectual Property Organization, WIPO) made the rating of the countries on number of new patents. In 2019 5,786 patents were the share of Britain. Read more here.

IT market of Britain

Main article: IT market of Britain

IT in a public sector of Great Britain

Main article: IT in a public sector of Great Britain

Level of penetration of the Internet in comparison with other countries

2018.

Trade

Data for 2018

Export of computer devices

The export volume of computer devices in the countries of the world, 2019

1855

Reconstruction of sea routes on records of 280,000 logbooks.

Transport

2018: Start of a system of recognition of drones after a delay of 1000 runs because of them

In December, 2018 Britain began to develop the new system of recognition of drones through the whole country after because of such unmanned aerial vehicles about 1000 flights were delayed and about 140 thousand people suffered. Read more here.

Tourism

Data for 2018.

Alcohol market

The minimum age for acquisition of alcoholic beverages

Data for 2018

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Notes