UK economy

Main article on the country: UK

GDP

Main article: UK GDP

Financial system

Modern monetary theory

Main article: Modern Monetary Theory (SDT)

The financial policy of the country corresponds to the Modern Monetary Theory (SDT).

Bank of England

Main article: Bank of England (BOE)

Sterling issue, key rate management.

Currency: £

• Digital pound sterling

2022: Depreciation against the dollar to a record high in history

On September 7, 2022, amid a worsening energy crisis, the pound fell to its lowest level against the US dollar since 1985.

Sterling fell nearly 5% to historic lows on September 26 after the British government promised to continue cutting taxes, fuelling fears that the new fiscal policy would send inflation and debt soaring.

It was sterling's biggest intraday drop since March 2020. The fall raised the prospect of the currency reaching parity with the dollar to about 50% this year.

By the end of September 2022, sterling had moved closer to parity with the US dollar. The current level is unparalleled in history.

1955: Dollar displaces sterling in international reserves

After World War II, by 1955, in just ten years, the share of sterling in the reserves of the world's countries fell from 80% to 38% (and over the next 20 years another ten times), and the share of the US dollar increased to 52%.

Non-financial debt

2022: Aggregate non-financial debt

National debt

Main article: UK National Debt

Foreign exchange reserves

2018: $123 billion

Budget

Main article: UK Budget

Sovereign Wealth Fund

Inflation

Main article: UK inflation

Banking system

2023

High household debt: 78% of GDP

Mortgage arrears hit 7-year high

Mortgage arrears in Britain hit a 7-year high.

Withdrawal of deposits of individuals and companies for 11 billion pounds in March

British households and businesses withdrew almost £11bn (13.8bn) from banks dollars in March 2023 amid panic over the bank's collapse Silicon Valley Bank and takeover. Credit Suisse

4 thousand bank branches closed in 7 years

By April 2023, a third of bank branches were closed in Britain - the country is massively moving into numbers. More than 4 thousand branches have closed over the past 7 years.

2022

Financial fraud losses in Britain reach £1.2bn

In 2022, cybercriminals, using various fraudulent schemes, stole more than £1.2 billion in Britain (approximately $1.5 billion at the exchange rate as of May 11, 2023). This is 8% less compared to 2021. The corresponding data are given in the study of the trade association UK Finance, the results of which were released on May 11, 2023. Read more here.

Mortgage rate rise to 6% for the first time since 2008

In October 2022, the key mortgage rate in Britain rose above 6% for the first time since 2008.

2019: $0.3 trillion in accounts of foreign individuals

A worldwide haven for tax avoidance

A new analysis of the tax justice network in 2019 found that the UK is the world's largest vehicle for corporate tax evasion. The British Overseas Territories and Crown dependencies dominate the list of places allowing multinationals to avoid paying tax. In total, this makes the UK responsible for about a third of the global risk of tax evasion.

Stock market

2024: Issuer capitalization 140% of GDP

2023: Negative market dynamics after Britain leaves the EU

Cryptocurrencies

Main article: Cryptocurrencies in Britain

Electronic Payment Systems

2022: 26.7% of the population pay for smartphone purchases

2020:70% of Internet users prefer cashless payment

Exchanges

• London Stock Exchange (LSE)
• LME (London Metal Exchange)

Investment abroad

2020: Fifth largest investment in Africa

Foreign investment

2023: 2.9 thousand projects with foreign direct investment

Venture Capital Investments

Main article: Venture capital investment in Britain

Businessmen

2023: Rising bankruptcies as pressure falls on Russia

2022: Record number of companies close in Britain

At the end of 2022, approximately 345 thousand companies and organizations ceased operations in Britain. For comparison: a year earlier, the number of closed enterprises was estimated at 328 thousand. Such data are provided in a study by the country's Bureau of National Statistics (ONS), the results of which were published on November 22, 2023.

The share of companies that curtailed operations in 2022 in Britain has grown record, reaching 11.8%. In 2021, this figure was 11.2%, and in 2020 - 10.4%. At the same time, the number of enterprises opened in 2022 was at the level of 337 thousand against about 364 thousand a year earlier. The level of formation of new companies on an annualized basis decreased from 12.4% to 11.5%. Thus, as noted, for the first time since 2010, the share of closed companies exceeded the share of opened ones.

In 2022, there were approximately 2.93 million active enterprises in Britain, compared with 2.94 million in 2021. The highest level of creation of new organizations in 2022 was recorded in the transport and warehouse industries - plus 21.2%. This is followed by business administration and support services (+ 14.7%), as well as hospitality and catering (+ 14.2%). The largest indicator of curtailment of companies' activities is also observed in the transport and warehouse industries - 23.8%. Then there is the information and communication segment with 13.6%, as well as retail, hospitality and catering with 12.8%.

Of the 291,000 British businesses with 10 or more employees in 2022, 11,480 companies (3.9%) are classified as fast-growing. This corresponds to an increase of 0.1% compared to the previous year. At the regional level, London in 2022 showed the highest level of formation of new enterprises - 12.7%. At the same time, the main industry was the professional scientific and technical sphere (16.5%), with almost half of the growth coming from management consulting.^[1]

Energy carriers

Oil and gas production and import

Main article: Import of gas, coal, oil and petroleum products in Europe

2023: Britain bought oil from Russia for 2.2 billion pounds, despite its own sanctions

In 2023, Britain purchased oil from the Russian Federation for 2.2 billion pounds, despite its own sanctions. This became known in early March 2024.

According to the British newspaper The Guardian, citing local government data, Britain continues to purchase energy resources from Russia thanks to a loophole in the law, since if Russian oil is processed in another country, it is no longer considered Russian from the technical side.

Britain bought oil from the Russian Federation for 2.2 billion pounds sterling

The publication, referring to an analysis of the news site Desmog, notes that imports of "refined" oil from India, China and Turkey to Britain in 2023 increased fivefold compared to 2021 (£434.2 million) and turned out to be a record.

According to the organization Global Witness, despite the increase in oil purchases from the Middle East, every twentieth flight in 2023 was carried out on Russian fuel. The organization emphasizes that fuel that is processed outside the Russian Federation does not fall under the sanction. Global Witness calls it money laundering. According to the organization's estimates, over the year the Russian Federation earned more than £100 million.

Global Witness estimates that about 5.2 million barrels of petroleum products produced from Russian crude oil were imported to Britain during 2023, with the majority of imports being jet fuel (4.6 million barrels). At the same time, reports from the British government show that direct oil imports from Russia fell from £1.5bn in the first quarter of 2022 to zero a year later. Against this background, Britain increased its purchases of oil and gas from, Algeria,, Bahrain,, and Kuwait Libya: Qatar in Saudi Arabia UAE the 12-month period, which ended in March 2023, supplies from these countries increased by 60%, to £19.3 billion.^[2]

Coal mining

2022: Opening of the first deep coal mine in 30 years

In December 2022, Britain approved the opening of its first deep coal mine in more than 30 years.

Nuclear fuel

2023: Creation of a $90 million fund to reduce dependence on the supply of enriched uranium from Russia

In January 2023, it became known that the British authorities created a $90 million fund designed to reduce dependence on the supply of enriched uranium from Russia. A third of the funds have already been distributed between uranium enrichment and processing companies, and a competition has been announced for the development of the remaining ones.

Oil processing

2023: Decision to close Grangemouth refinery in Scotland in 2025

The Grangemouth refinery in Scotland, built in 1924, is one of only six in Britain to process crude oil, which is often mined in the North Sea, and turn it into fuels such as petrol and diesel.

Grangemouth had an advantage over many other refineries - it was located at the end of the pipeline, which received North Sea oil, which allowed setting world prices. But today, even these barrels have lost their relevance thanks to the rapid growth in supplies from the United States.

Many years ago, the benchmark Brent crude consisted of just three grades - Brent, Oseberg and, crucially, Forties. Grangemouth could take between five and eight Forties cargoes a month via a canal from the North Sea, representing a significant amount of vital supplies.

But as of November 2023, Brent grades are dominated by U.S. crude, and Forties shipments have slowed to a low. In some months, the Forties pipeline does not ship eight cargoes either.

And so PetroIneos, the owner of Grangemouth, decided to close the refinery in 2025 and turn it into a terminal for importing and exporting fuel.

This speaks not only to how world oil prices have changed, but also to how fuel production is changing.

New giant refineries in West Africa, the Middle East and China have been and continue to be put into operation, shifting production centers.

During the COVID-19 pandemic, Grangemouth, like many other European plants, mothballed some of its fuel processing plants, saying they were simply unprofitable. It highlighted an existential threat to the enterprise that persisted even after the economic recovery.

And now the part of the enterprise, which accounts for 4% of Scotland's gross domestic product, will be closed. It will delight environmentalists, but it has already angered unions wary of job cuts.

At its core, Grangemouth is a snapshot of decades of transformation in the oil market. Europe pumps less oil and other regions produce more fuel. This is not the last European refinery to be closed.

Gasoline price

Main article: Gasoline prices

2022: Petrol prices rise in Britain to £1.67 a litre

On March 8, 2022, the price of diesel fuel in Britain reached another record. The average price of motor fuel rose to 165.24p per litre ($2.17), 3p higher than the previous day. It is the second-highest daily increase since 2000, according to the RAC. Diesel prices are especially at risk of a sharp increase, since about a third of imports of this fuel to Britain come from Russia, against which sanctions were imposed against the background of a special operation of the Russian Armed Forces in Ukraine.

Gasoline prices Great Britain are growing at a record pace over the past 13 years. The cost of petrol rose 2.5% in the first week of March 2022 and 24% for the year.

Power

Main article: Power Britain

Automotive market

2023: Seventh in the world in terms of the number of cars sold - 2.3 million units

2022: Minimum age to drive - 17

2021: Auto production fell to 1956 levels to 860,000

British automakers in 2021 experienced their worst year since 1956 due to a global shortage of semiconductors, personnel problems associated with the COVID-19 pandemic, and the closure of a key Honda Motor plant.

Production fell about 7% to less than 860,000 vehicles in 2021, the lowest in more than six decades and about a third below pre-pandemic levels.

The country is counting on the modernization of local factories.

2018: Number of cars per 1000 people

Richest people

Main article: Britain's richest people

Salaries, income tax, real income, pensions

2024: Increase in income tax to 60% on income above 100 thousand pounds

Since July 2024, Britain has an income tax of 60%.

Anyone earning more than £100,000 is an individual with a family or not, must pay 60% tax on any income in excess of £100,000.

Breakdown of calculation:

For example: your salary is £100,000 a year.

• From the first £45,000 you pay 20% tax.

• From £45,000 to £100,000, you will pay 45% tax.

• If you make just £1 on top of the £100,000 limit after that, you only save 0.40p of your money, meaning you pay 60% tax.

The calculation also takes into account stocks and cryptocurrencies.

2023

Minimum wage - $1705

The minimum retirement age is 66

2022

Real salary growth by 20% over 22 years

Decrease in real income per employee in the third quarter by 2.7%

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Biggest drop in living standards in a century

As of October 2022, Britain in 2022 is experiencing the largest drop in living standards in at least a century.

Pension funds write off £10bn in Russian assets

In March 2022, British pension fund managers write off billions of pounds worth of frozen Russian assets due to the inability to sell them amid Russia's special operation in Ukraine, Reuters reports.

The share of Russian assets in about 0.5% of all pension savings in Britain, or about £10 billion.

If pension funds decide to get rid of their Russian assets as quickly as possible, they will probably be forced to sell them for nothing. And at the same time, the sale will require additional costs for the "sanction" check of potential buyers. However, leaving them in the expectation of restoring prices after the resolution of the conflict would be a violation of the stated ethical principles.

Record 30-year decline in disposable income

Revenues in Britain in December 2021 decreased significantly due to inflation, and this fall will intensify in April 2022, when electricity bills and taxes will rise.

Overall, households faced the biggest decline in disposable income in 30 years, according to the Bank of England.

2020: Average household assets exceed £ 300

2017: Average monthly salary - €1,980

Labour market and unemployment

2024

Unemployment rate is higher than in Russia, Japan and the United States

In Britain, they begin to dismiss civil servants and replace them with artificial intelligence

At the end of February 2024, it became known that the British government is actively testing systems based on artificial intelligence to replace employees of government departments. It is assumed that this will increase the efficiency of government structures and reduce costs.

Oliver Dowden, Deputy Prime Minister of Britain, spoke about the new initiative. According to him, AI systems will be used to perform "routine" tasks, and not to solve confidential political issues and process important information. One use case that is likely to significantly improve the efficiency and productivity of civil servants is an AI tool for public consultation. This service will help in the formation of documents that usually take a long time to prepare.

The British government is actively testing systems based on artificial intelligence to replace employees of government departments

Dowden assured that the level of errors associated with AI in the public sector would be significantly lower compared to commercial industries. The Department of Artificial Intelligence in the British Cabinet Office receives significant funds for developments in the field of neural networks.

Speaking about the ROI that the government can expect in the field of AI, Laura Gilbert, chief analyst and director of data science at Downing Street (it houses the official residence of the British Prime Minister), said that "some of the first tools give a 200-fold return on investment."

AI algorithms can explore and analyze complex data in new ways. Thus, it is possible to detect new trends and patterns that may not be apparent in other cases. These algorithms are able to summarize information, describe several solutions, generate ideas and create detailed documentation based on research records.^[3]

2023

Youth unemployment - 11.4%

Stable number of employees aged 15 to 64 years

2022

The average annual number of working hours per person is about 1530

The proportion of employees aged 65 or more - above 10%

Unemployment rate - 3.8%

2021

Unemployment drop to 4.9%

Unemployment in Britain was 4.9% by the end of 2021, while youth unemployment was 11%.

30.3% of workers are employed in public administration, education and health care

Employment by sector in Britain for 2021 looks like this:

1. Public administration, education and health 30.3%

2. Distribution, hotels and restaurants 18.1%

3. Banking and Finance 17.6%

4. Transport and communications 9.1%

5. Production 9%

6. Construction 7.2%

7. Other services 5.9%

8. Power%

9. Agriculture, Forestry and Fisheries 1.1%

2020: Unemployment rate - 5.4%

2019: Average labor productivity - $54.35 per hour

2015: More than 5.2% of workers work 60 or more hours a week

Real estate

Main article: Real estate in the UK

Information Technology

• UK e-government
• DirectGov - UK e-government service
• UK National Information Security Programme

Britain's IT Market

Main article: Britain's IT market

• Major Oracle and SAP partners in Europe
• Europe's IT Market
• Western Europe IT Market

IT in the UK public sector

Main article: IT in the UK public sector

Internet

Main article: Internet regulation in Britain

2022: Internet is used by 96.8% of the population

2018: Internet penetration compared to other countries

Communication (British market)

Main article: Communication (British market)

Semiconductors (British market)

2024: $1.3 billion earmarked for semiconductor industry

2023: £1bn earmarked for chip development in the next 10 years

The country is implementing, albeit with great delays, a long-term strategy to develop the semiconductor industry. The problems, according to experts, are associated with new appointments and personnel reshuffles in the government. In May 2023, the country's authorities announced the allocation of £1 billion for the development of chips in the next 10 years. It is planned that the first tranche of £200 million will be distributed until 2025. The strategy of the British, unlike the United States and the EU, is focused on the development of the so-called. "Faceless" companies and the sale of technology. [1]Learn more here.

CCTV (UK Market)

2022: More than 7,000 CCTV cameras on the roads

R&D

2022

2020: R&D spending - $44.2 billion

2019: Seventh most patented in the world

At the end of April 2020, the World Intellectual Property Organization (WIPO) ranked countries by the number of new patents. Britain had 5,786 patents in 2019. Read more here.

Foreign trade

Main article: UK Foreign Trade

Retail

2023: Retail volume declines for second year in a row

2021: 35.9% of total retail sales came from the Internet

2018: Largest retail chain - The co-operative food

Transport

• HS2 (High Speed ​​2) High Speed Rail in Britain

2023: Britain tries to launch single GIS for bus services for 3 years, but money goes to waste

In early September 2023, the British Department of Transport announced its intention to allocate £24 million (approximately $30.16 million at the exchange rate as of September 6, 2023) to technology companies that will help in the deployment of the state information system (GIS) for bus transportation. Read more here.

2021: Average train speed - 134.4 km/h

2018: Drone recognition system launched after 1,000 flights delayed due to them

In December 2018, Britain began deploying a new drone recognition system throughout the country after about 1,000 flights were delayed due to such unmanned aerial vehicles and about 140,000 people were injured. Read more here.

Agriculture

2022

Low level of state support for agriculture

Vegetables' rotting'fruit due to lack of manpower

In the UK, in the first half of 2022, due to a shortage of labor, fruits and vegetables rotted in the amount of about $27 million, writes Bloomberg, citing a survey of 200 representatives of the agricultural industry conducted by the National Farmers Union. The survey takes into account the votes of a third of the sector, from which we can conclude that the total losses amounted to about $72.6 million, Bloomberg believes.

2019: Average use of pesticides in agriculture

Cosmonautics of Britain

Main article: Cosmonautics of Britain

Tourism

2022: Reduction in the number of foreign tourists to 30 million people

2020:32 UNESCO-protected World Heritage Sites

2018: UK among top countries in tourism revenue

Restaurants and bars

2022: More than a thousand pubs closed due to crisis

In early April 2023, it became known that more than 1,000 pubs were stopped working in Britain in 2022. The reason is the increased cost of living due to the crisis and macroeconomic difficulties.

According to estimates, the number of pubs closed in 2022 turned out to be double compared to the previous year, despite the fact that then there were restrictions in connection with the COVID-19 pandemic. Many drinking establishments faced a sharp increase in the cost of paying for electricity: the corresponding costs in some cases jumped three times. In such conditions, doing business for a huge number of British pubs has become impractical.

During the first half of 2022, 485 establishments curtailed their activities, and during the second half of the year - another 554. So an average of 21 pubs closed each week. In an attempt to survive in difficult conditions, pubs reduced their opening hours and began to use candles instead of electric lighting in the dark. Other measures are being taken to reduce costs, but for many establishments the only way out was closure.

In London, 98 pubs ceased operations. In Manchester, 23 objects were closed forever, and another 47 were empty. In West Yorkshire, 72 establishments closed. In South and North Yorkshire, 43 and 37 pubs were shut down respectively. In East Yorkshire, four establishments ceased to exist, and eight others announced a long-term suspension. In Kent, 47 beer shops closed and in Hampshire, 29. Staffordshire lost 38 establishments, Shropshire - 26. Many other pubs are at risk of closure due to rising electricity bills. It is noted that over the year energy costs reach 18.4 thousand pounds sterling (approximately $22.8 thousand at the exchange rate as of April 3, 2023).^[4]

Alcohol market

Minimum age to purchase alcoholic beverages

Food industry

2021: Cheese production - 7.5 kg per capita

Consumption

2023

Decline in meat consumption to 1970 levels - 854 grams per week

According to the government, the British began to consume an average of 854 grams of meat per week, which is the lowest value since 1970 (then they first began to register information on this issue). Since 2012, the figure has decreased by 14 percent.

Office for National Statistics officials say the price of beef steak is up 10 per cent over the year and the price of chicken is up 9 per cent. At the same time, about 10 percent of poor Britons began to consume 19 percent less meat.

According to the study, the current trend is due to a decrease in real incomes of the population and a change in lifestyle.

The authors use vegetarianism as a convenient reason for what is happening and generally recalled that Britain has adopted a food strategy, according to which it is recommended to reduce meat consumption by 30 percent by 2032 in order to reduce emissions into the environment.

Poultry meat is the most consumed type of meat

2022: Vegetarian share increases to 6.5%

2019

Chicken meat is the most consumed type of meat

Beer consumption in liters per year per person

2018

Per capita tea consumption per kg per year

Milk consumption in liters per year per person

Notes