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Economy of England
Currency 1 pound (£1) = 100 pence [1]
Fiscal year Calendar year
Statistics
External
Public finances
All values, unless otherwise stated, are in US dollars

The Economy of England is the largest economy of the four countries of the United Kingdom.

England is a highly industrialised country. It is an important producer of textiles and chemical products. Although automobiles, locomotives, and aircraft are among England's other important industrial products, a significant proportion of the country's income comes from the City.

Since the 1990s, the financial services sector has played an increasingly significant role in the English economy and the City of London is one of the world's largest financial centres. Banks, insurance companies, commodity and futures exchanges are heavily concentrated in the City.

The service sector of the economy as a whole is now the largest in England, with manufacturing and primary industries in decline. The only major secondary industry that is growing is the construction industry, fuelled by economic growth provided mainly by the growing services, administrative and financial sector.

The British pound sterling is the official currency of England and the central bank of the United Kingdom, the Bank of England, is located in London.

Contents

History

In medieval times (c. 11th–15th century), the wool trade was the major industry of England and the country exported wool to Europe. Many market towns and ports grew up on the industry. Poor infrastructure hampered the development of large scale industry. This changed when the canals and railways began to be built, in the late 18th century and early 19th century.

England became the world's first industrialised nation, with the industrial revolution taking place in the late 18th century. This was also the age of British overseas expansion, where England relied upon colonies (such as China, India, America, Canada, or Australia) to bring in resources such as cotton and tobacco. English factories then processed the goods and sold them on in both the quickly growing domestic market or abroad. Cities grew and large industrial centres were established, especially in the Midlands and North England.

Heavy industries, such as coal mining, steel production and shipbuilding, declined in England during the second half of the 20th century and were replaced by service industries and hi-tech industries, such as the computer and pharmaceutical industries.

Today, England is one of Europe's, as well as the world's, wealthiest nations and is the wealthiest of the four nations that make up the UK (GDP per capita).

Agriculture and fishing

Agriculture is intensive, highly mechanised, and efficient by European standards, producing about 60% of food needs with only 2% of the labour force. It contributes around 2% of GDP. Around two thirds of production is devoted to livestock, and 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 the market was unregulated. The GDP from the farming sector is argued by some to be a small return on the subsidies given but is argued by others that subsidy boosts security and therefore is justified in the same way defence spending is.

The main crops that are grown are wheat, barley, oats, potatoes, sugar beets, fruits and vegetables. The livestock that is raised comprises mainly 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 Isles of Scilly, that 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 where the London Stock Exchange, as well as many other exchanges, are based.

Service industries, particularly banking, insurance, and business services, account by far for the largest proportion of GDP and employ around 80% of the working population.

Leeds is the UK's second largest financial centre[2], with over 30 national and international banks based in the city[3]. Over 124,000 people are employed in banking and financial services in Leeds, and over in the wider Leeds City Region[4][5][6].

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 government-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; a situation largely reflected in other Western industrialised countries. However, manufacturing still accounts for some 26% of the UK's GDP. England remains a key player in the aerospace, defence, pharmaceutical and chemical industries, and British companies worldwide continue 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) continues to benefit shareholders, consumers and the UK economy as a whole, although areas that were formerly dependent on manufacturing such as the Midlands and North East have experienced severe economic decline.

Tourism

Tourism is the 6th largest industry in the UK, contributing £76 billion to the economy. It employs 1,800,000 full-time equivalent people — 6.1% of the working population (2002 figures).[1] The largest centre for tourism is London, which attracts millions of international tourists every year.

Regional variation

A map of England divided by the average GVA per capita in 2005 showing the distribution of wealth

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 (2004) per capita of England as a whole and each of the nine regions.

Rank Place GDP per capita
in Euros
England 26 904
1. London 44 401
2. South East 31 300
3. East of England 27 778
4. South West 27 348
5. East Midlands 26 683
6. West Midlands 25 931
7. North West 25 396
8. Yorkshire and the Humber 25 300
9. North East 22 886

Two of the 10 economically strongest areas in the European Union are in England. Inner London is number 1 with a €71 338 GDP per capita (303% above EU average); Berkshire, Buckinghamshire & Oxfordshire is number 7 with a €40 937 GDP per capita (174% 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 €18 645 per capita, or 79% of the EU average of €21 503.

See also

References

External links








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