The UK is a developed country, with the sixth (nominal GDP) or seventh (PPP) largest economy in the world.
It was the world's first industrialised country and the world's foremost power during the 19th and early 20th centuries, but the economic cost of two world wars and the decline of its empire in the latter half of the 20th century diminished its leading role in global affairs. The UK nevertheless remains a major power with strong economic, cultural, military and political influence and is a nuclear power, with the second or third highest (depending on method of calculation) defence spending in the world. It is a member state of the European Union, holds a permanent seat on the United Nations Security Council, and is a member of the G8, NATO, OECD, WTO and the Commonwealth of Nations
The UK economy is one of the strongest in Europe. The average quarterly GDP growth for the UK is higher than the average for the European Union and for members of the 'Eurozone' over the period from 2000 to 2005 .
Sterling has performed relatively well against major currencies in recent years. As shown in Figure 1, Pound Sterling buys more Japanese Yen and the US Dollar in 2005 compared to 2000, but has grown weaker against the Euro . (Currency values are based on the average of daily telegraphic transfer rates in London.) The UK economy is the world's fifth largest. Gross Domestic Product (GDP) was almost US$2.2 trillion in 2005 (equivalent to around £1.16 trillion sterling at November 2006 prices). Only the economies of the US, Japan, Germany and China are larger .
The UK's people are the world's twelfth richest. The World Bank estimated the mean annual income for a British subject as US$37,600 (or £19,840 sterling at November 2006 prices) in 2006. The Channel Islands, which were listed separately by the World Bank, were ranked 14th richest and Eire tenth .
The UK was worth £6 trillion in July 2006. Housing represents over £3.5 trillion of these assets Both the balance of payments and the balance of trade are in deficit. This means that the financial flow out of the country was greater than that coming in (deficit approx £8.4 billion in the second quarter of 2006) and more goods and services were imported than exported (deficit of £4 billion in September 2006) .
The strongest performing sector in the UK economy is business and financial services. Measured by 'Gross Value Added' (GVA), this sector represented over 33 per cent of economic output in 2004 - more than double the size of the manufacturing sector at 14.1 per cent. In contrast, agriculture's contribution remains below one per cent. Information and Communication Technologies contribute 6.4 per cent of the total GVA .
The strongest performing region in the UK is London, closely followed by South East England. Together these regions accounted for nearly one-third of the total GVA in 2004. In the UK, England has the highest GVA per capita followed by Scotland .
Private equity and venture capital professionals view the UK economy in 2008 with concern as 70 per cent of BVCA member companies say that they expect the UK's economic environment to get worse over the course of the year, according to a new YouGov poll published by The British Private Equity and Venture Capital Association (BVCA).