Economy
The United Kingdom has the fourth-largest economy in the world, is the second-largest economy in the European Union, and is a major international trading power. A highly developed, diversified, market-based economy with extensive social welfare services provides most residents with a high standard of living. London ranks with New York as a leading international financial center.

Since 1979, the British Government has privatized most state-owned companies, including British Steel, British Airways, British Telecom, British Coal, British Aerospace, and British Gas, although in some cases the government retains a "golden share" in these companies. The Labor government has continued the privatization policy of its predecessor, including by encouraging "public-private partnerships" (partial privatization) in such areas as the National Air Traffic Control System.

The United Kingdom is the European Union’s only significant energy exporter. It is also one of the world’s largest energy consumers, and most analysts predict a shift in U.K. status from net exporter to net importer of energy by 2020, possibly sooner. Oil production in the U.K. is leveling off. While North Sea natural gas production continues to rise, gains may be offset by ever-increasing consumption. North Sea oil and gas exploration activities are shifting to smaller fields and to increments of larger, developed fields, presenting opportunities for smaller, independent energy operators to become active in North Sea production.

The UK’s deficit on trade in goods and services widened in August to £5.3 billion. This compares with a deficit of £3.9 billion in July. This was due to a downward adjustment to services data of £1.4 billion to account for the estimated payment of claims by Lloyd’s of London arising from the effects of hurricane Katrina.

• GDP (at current market prices, 2003 est.): $1.664 trillion.
• Annual growth rate (2003 est.): 2.1%.
Per capita GDP (2003 est.): $27,700.
• Natural resources: Coal, oil, natural gas, tin, limestone, iron ore, salt, clay, chalk, gypsum, lead, silica.
• Agriculture (1.1% of GDP): Products--cereals, oilseed, potatoes, vegetables, cattle, sheep, poultry, fish.
• Industry: Types--steel, heavy engineering and metal manufacturing, textiles, motor vehicles and aircraft, construction (5.2% of GDP), electronics, chemicals.
• Trade (2003 est.): Exports of goods and services--$304.5 billion: manufactured goods, fuels, chemicals; food, beverages, tobacco.
• Major markets--U.S., European Union.
• Imports of goods and services--$363.6 billion: manufactured goods, machinery, fuels, and foodstuffs.
• Major suppliers--U.S., European Union, Japan.

Similar to the U.S. the UK manufacturing sector is in grave condition and its problems are spreading to other sectors like the service sector. The slow down could easily go from bad to worse as crude oil prices rise and terrorist attacks increase.

"Manufacturing needs some intensive care, and while the Bank of England's recent cuts in interest rates offered the right kind of medicine, it may not yet be enough to bring the sector back to health," said the BCC's director general David Lennan.

"These are tough and uncertain times for the UK and global economy and all the indicators point to the fact there is worse to come."

Several developing Nations are experiencing a slow down in economic activity. Central banks are either raising rates or cutting rates in an effort to stimulate the economy. In America the current trend by the Federal Reserve is to raise interest rates, while the Bank of England has cut UK interest rates six times this year, currently at its lowest level since 1964, as it tries to stimulate the economy.

Global trends are showing that turnaround in many developing Nations could not be in the foreseeable future.  

Confidence in the manufacturing sector on both sides of the pond has fallen sharply and there is no sign of improvement. U.K. manufacturing companies expect more losses before the end of the year.

As in most Nations consumer spending is key! If the consumer stops spending it could provide for reduced cash flows which is always a concern for businesses, the results could be deeper multi sector difficulties and a longer turn around than any one could imagine.

The impacts from the London train bombing and other terrorist activities have not trickled down to the economy especially through the holiday season and that could impede growth through 2006.

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UODATE - Jan. 2012. Using UK financial and equipment services for projects in Africa.