Economy of England
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The Economy of England is the largest of the four economies of the United Kingdom.
England is one of the world’s most highly industrialized countries. Its products include a variety of goods, ranging from sewing needles to earth- moving equipment. It is a leading shipbuilding country and an important producer of textiles and chemical products. Automobiles, locomotives, and aircraft are among England’s other important industrial products.
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Economic history
to be completed
Economic sectors
Agriculture and fishing
Agriculture is intensive, highly mechanised, and efficient by European standards, producing about 60% of food needs with only 1% of the labour force. It contributes around 2% of GDP. Around two thirds of production is devoted to livestock, one third to arable crops. Agriculture is heavily subsidised by the European Union's Common Agricultural Policy and it is not known how large a sector it would be if free market rules applied. The GDP from the farming sector is argued by some to be a small return on the subsidies given.
The main crops that are grown are wheat, barley, oats, potatoes, sugar beets, fruits and vegetables. The livestock that is raised is cattle and sheep. In the drier east, farmers raise wheat, barley, oats, potatoes, and sugar beets. Apples are grown in the west. Cornwall and the nearby Scilly Isles, which have the mildest climate and longest growing season in England, raise winter vegetables, fruits, and flowers for the London Market.
England is one of the world’s leading fishing nations. Its fleets bring home fish of every kind, ranging from sole to herring. Kingston upon Hull, Grimsby, Fleetwood, Great Yarmouth, and Lowestoft are among the coastal towns that have large fishing industries.
Investing and banking
England's capital is London. The city of London is London's major financial district, and one of the world's leading financial centres. The city is also where the London Stock Exchange is based.
Service industries, particularly banking, insurance, and business services, account by far for the largest proportion of GDP and employ around 70% of the working population.
Manufacturing
Manufacturing continues to decline in importance. In the 1960s and 70s manufacturing was a significant part of England's economic output. However a lot of the heavy manufacturing industry was goverment run and had failed to respond to world markets. State industries were sold off and over the 20th century many closed as they were unable to compete. For example in 2005 the country's last volume car maker, the MG Rover Group, went into administration after failing to come to agreement with the SIAC group of China to form a joint venture that might have saved the company. England is left with a very small domestic manufacturing sector, though British companies world wide continued to have a role in the sector through foreign investment. Closure of English factories and movement of manufacturing to Eastern Europe and the "Far East" in search of lower costs (especially through lower wages and less strict employment laws) contines to benefit share-holders but not the UK economy as a whole.
Tourism
Tourism is the 6th largest industry in the UK, contributing 76 billion pounds to the economy. It employs 1,800,000 full-time equivalent people — 6.1% of the working population (2002 figures) [1] (http://www.visitbritain.com/).
Currency
The currency of England is the Pound Sterling, or British pound, which is used throughout the UK. Sterling is issued by the Bank of England in London.
There is considerable debate as to whether the UK should join the Euro currency, which would replace the Pound. The relatively good economic performance has complicated the Blair government's efforts to make a case for Britain to leave the Pound Sterling and join the Euro. The British Prime Minister has pledged to hold a public referendum if membership meets Chancellor of the Exchequer Gordon Brown's "five economic tests". The tests are:
- Are business cycles and economic structures compatible with European interest rates on a permanent basis?
- If problems emerge, is there sufficient flexibility to deal with them?
- What impact would entry into the Euro have on the UK's financial services industry?
- Would joining the Euro create better conditions for firms making long-term decisions to invest in Britain?
- Would joining the Euro promote higher growth, stability and a lasting increase in jobs?
When assessing the tests, Gordon Brown concluded that while the decision was close, the United Kingdom should not yet join the Euro. In particular, he cited fluctuations in house prices as a barrier to immediate entry. The tests will be reassessed in the future. Public opinion polls show that a majority of Britons are opposed to joining the single currency at this time.
England's fiscal year runs from 1 April – 31 March.
Regional variation
The strength of the English economy varies from region to region. GDP, and GDP per capita is highest in London. The following table shows the GDP (2002) per capita for each of the 9 regions of England.
| Rank | Place | GDP per capita in Euros |
|---|---|---|
| 1. | London | 40 068 |
| 2. | South East | 27 104 |
| 3. | East of England | 23 325 |
| 4. | South West | 23 052 |
| 5. | West Midlands | 22 123 |
| 6. | East Midlands | 21 892 |
| 7. | North West | 21 878 |
| 8. | Yorkshire and the Humber | 21 832 |
| 9. | North East | 19 249 |
Two of the 10 economically strongest areas in the European Union are in England. Inner London is number 1 with a €66 761 GDP per capita (315% above EU average); Berkshire, Buckinghamshire & Oxfordshire are number 7 with a €34 251 GDP per capita (162% above EU average).
Although being in South West England, which is the 4th strongest region in England, Cornwall and the Isles of Scilly (combined into a NUTS:3 region for statistical purposes) is the weakest area in England, with a GDP per capita of €15 366 per capita, or 73% of the EU average of €21 170.