world's great trading powers and
financial centers, and its economy ranks among the four largest in
Western Europe. The economy is essentially capitalistic; over the past
13 years the ruling Tories have greatly reduced public ownership and
contained the growth of social welfare programs. Agriculture is
intensive, highly mechanized, and efficient by European standards,
producing about 60% of food needs with only 1% of the labor force. The
UK has large coal, natural gas, and oil reserves, and primary energy
production accounts for 12% of GDP, one of the highest shares of any
industrial nation. Services, particularly banking, insurance, and
business services, account by far for the largest proportion of GDP
while industry continues to decline in importance, now employing only
25% of the work force and generating only 21% of GDP. The economy
registered 4.2% GDP growth in 1994, its fastest annual rate for six
years. Exports and manufacturing output are the primary engines of
growth. Unemployment is gradually falling. Inflation is at the lowest
level in 27 years, but British monetary authorities raised interest
rates to 6.25% in 1994 in a preemptive strike on emerging inflationary
pressures such as higher taxes and rising manufacturing costs. The
combination of a buoyant economy and fiscal tightening is projected to
trim the FY94/95 budget shortfall to about $50 billion - down from
about $75 billion in FY93/94. The major economic policy question for
Britain in the 1990s is the terms on which it participates in the
financial and economic integration of Europe.

National product: GDP - purchasing power parity - $1.0452 trillion
(1994 est.)

National product real growth rate: 4.2% (1994 est.)

National product per capita: $17,980 (1994 est.)

Inflation rate (consumer prices): 2.4% (1994)

Unemployment rate: 9.3% (1994)

Budget:
revenues: $325.5 billion
expenditures: $400.9 billion, including capital expenditures of $33
billion (FY93/94 est.)

Exports: $200 billion (f.o.b., 1994 est.)
commodities: manufactured goods, machinery, fuels, chemicals,
semifinished goods, transport equipment
partners: EU countries 56.7% (Germany 14.0%, France 11.1%, Netherlands
7.9%), US 10.9%

Imports: $215 billion (c.i.f., 1994 est.)
commodities: manufactured goods, machinery, semifinished goods,
foodstuffs, consumer goods
partners: EU countries 51.7% (Germany 14.9%, France 9.3%, Netherlands
8.