Economy of the United Kingdom with the role of the British state
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Photographs book England |
In the 19th century, Britain had the world’s leading economy: Its overseas trade thrived, its standard of living rose steadily, and its citizens pioneered industrial innovations. With the growth of the economies of other nations in the 20th century, the British economy remained relatively strong. It has continued to grow, and Britain remains a major producer of industrial goods and provider of services, as well as a center of world trade and finance. During the 20th century, Britons saw their per capita disposable income triple, an accomplishment all the more remarkable considering Britain’s size and limited natural resources. The skills and ingenuity of Britain’s highly trained workers, managers, and entrepreneurs have enabled the British economy to function well and provide for its large population. Encarta encyclopedia |
Overview of economy in United Kingdom |
Although Britain’s economy was strong in the 20th century, it faced a number of persistent problems. The balance of trade was one. Britain has had to import more than a tenth of its food and much of its raw materials, as well as many manufactured goods, and it has to export sufficient products and services to balance the cost of its imports. Another problem has been industrial inefficiency, which was particularly evident in older industries such as coal mining, shipbuilding, and textiles, which produced more products than they could sell. Some industries that had been nationalized (taken over by the state) after 1945, such as British Oil Corporation, British Airways, and British Telecommunications, were unprofitable and operated at a considerable cost to taxpayers. .Encarta |
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In addition, trade unions sometimes required companies to hire more workers than were needed, and time was lost due to strikes as workers pressed for higher wages. These trade union problems increased the cost of goods, which helped cause inflation. Inflation occurs when the demand for products is higher than the supply, which leads to an increase in the value and price of products. At the same time, unemployment remained high—11 percent of the workforce in the early 1980s—and efforts to lower it were not successful. These problems were particularly evident during the 1970s, when high oil prices triggered a worldwide recession Since the mid-1970s, Britain has benefited from a worldwide economic upswing as well as internal improvements. The government has taken a number of steps to encourage economic growth. It curtailed the power of unions and sold some nationalized industries, including British Airways and British Telecommunications, to private companies (called privatization). The government sought to encourage business and private investment by lowering taxes and easing restrictions, such as deregulating the stock exchange and lifting restrictions on certain business agreements. Simultaneously, it sought to curb its spending and services. Newer, more profitable high-tech industries absorbed more workers and managers, while many older, less-efficient firms folded. Britain’s economy received a boost with the discovery and exploitation of abundant oil reserves in the North Sea. Because of this oil, Britain no longer depended on imports of foreign petroleum products and also profited from exports of petroleum products. During the 1990s and early 2000s, Britain’s economy grew at an average annual rate of 2.2 percent. Encarta |