The UK Economy

Relative Decline
• The UK economy is currently moderately
successful, but is more interesting when
compared with the dominance it had over the
world in the 1800s.
• The British Empire had enormous influence over
many parts of the world, and Britain had colonies
and economic and political power in various
places, providing it with trade and resources that
other countries could not compete with.
Territories at one time or another part
of the British Empire(Wikipedia)
• Over the course of the last century, the British
Empire, once so powerful, has dwindled to a
fraction of its original size.
• Most of the colonies and overseas territories
have gradually turned to local rule, and
although they remain linked in many cases as
Commonwealth nations, the direct power that
the UK had over them is largely gone.
• Aside from the resources it controlled
overseas, the industrial production of Britain
was also far more dominant in times past
• Britain was the birthplace of the industrial
revolution, a change in the way industry
operated which was a precursor for most of
production systems in the world today.
• So Britain was dominant economically,
technologically, politically, and militarily.
• As the British Empire collapsed, and other
countries adopted the improved methods of
production brought about by the division of
labour, the dominance of the UK slipped away.
• The pressures bought about by fighting the
first and second world wars further affected
Britain’s economy
• Finally, the countries defeated and forced to
reconstruct after the wars became more
successful due to their more modern,
reconstructed industry, and rose to challenge
the supremacy of the UK economy.
• While by no means insignificant, compared to
past glory the current UK economy is not as
dominant as in the past.
 UK Economy – Recent History
• The economic hardships of the 1970s led to a
change in power of the government, when the
Conservative Party under Margaret Thatcher
was voted in.
• This was a chance for an overhaul of the
British economic system, and the Conservative
government made major changes.
• Regulations governing finance and foreign
exchange were loosened
• State owned industries were privatised.
• The changes had the positive effect of
increasing profits and improving efficiency,
but at the expense of the employment rate.
• The state of the UK economy fell for a time,
then increased until a recession in the early
1990s, followed by another rise until 2008,
when the UK economy was hit by the global
financial crisis.
• Success stories for the British economy
include mining, energy and pharmaceuticals
• The difficult conditions in the North sea,
where much of Britain’s natural resources
come from, forced UK companies to develop
internationally competitive technology.