Official Name: United Kingdom of Great Britain and Northern Ireland (Great Britain includes England, Scotland and Wales)
Internet Domain: .uk
International Dialing Code: +44
Time Zone: UTC 0 (daylight savings time UTC +1 from last Sunday in March to last Sunday in October)
|Location and Size||Credit and Collections|
|Legal System||Business Climate|
|Comparative Economic Indicators|
Location and Size
The United Kingdom is slightly smaller than the state of Oregon (USA) ” approximately 243,000 sq. km. (93,000 sq. mi.). It is located on islands (including the northern 1/6th of the island of Ireland) northwest of France, between the North Atlantic Ocean and the North Sea. It is comprised of four countries: England, Scotland, Wales and Northern Ireland.
Constitutional monarchy and Commonwealth. The UK does not have a written constitution, but consists partly of statutes, and partly of common law and practice.
The United Kingdom has a long history as a major player in international affairs and fulfills an important role in the EU, UN and NATO.
- Executive: Chief of State – Her Majesty Queen ELIZABETH II; Head of Government – Prime Minister Boris JOHNSON
- Legislative: Bicameral Parliament ” House of Lords (life peers, hereditary peers and clergy); House of Commons (elected by popular vote)
Based on common law tradition with early Roman and modern continental influences.
The United Kingdom has accepted compulsory International Court of Justice (ICJ) jurisdiction with reservations.
The citizens of each of the four countries making up the United Kingdom have a strong sense of nationalism. The term â€˜British’ refers to someone from any one of the four countries. â€˜English’ refers to people from England; â€˜Scots’, people from Scotland; â€˜Welsh’, people from Wales; â€˜Irish’, people from Northern Ireland.
- Languages: English, Welsh (about 26% of the population of Wales), Scottish form of Gaelic (about 60,000 in Scotland) ” the UK does not have a constitutionally defined official language, but English is the de facto official language as it is spoken by 70% of the population.
- Literacy: 99%.
- Ethnic Make-up: white (of which English 83.6%, Scots 8.6%, Welsh 4.9%, Northern Irish 2.9%) 92.1%, black 2%, Indian 1.8%, Pakistani 1.3%, mixed 1.2%, other 1.6% .
- Religions: Christian (Anglican, Roman Catholic, Presbyterian, Methodist) 71.6%, Muslim 2.7%, Hindu 1%, other 1.6%, unspecified or none 23.1%.
The United Kingdom has the sixth-largest economy in the world, is the third-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. Unemployment and inflation levels were among the lowest within the European Union.
The government has nationalized or seized considerable ownership in some of the major banks. Deterioration in public finances is worse than in other leading economies. Welfare benefits, the biggest component of government spending, have been rising. The government deficit is widening rapidly, and public debt has climbed to around 60 percent of GDP.
- Currency: British Pound (GBP)
- Leading Markets (2017): US 13.2%, Germany 10.5%, France 7.4%, Netherlands 6.2%, Ireland 5.6%, China 4.8%, Switzerland 4.5%
- Leading Exports – Commodities: Manufactured goods, fuels, chemicals; food, beverages, tobacco
- Leading Suppliers (2017): Germany 13.7%, US 9.5%, China 9.3%, Netherlands 8.0%, France 5.4%, Belgium 5.0%
- Leading Imports – Commodities: Manufactured goods, machinery, fuels; foodstuffs
- Top Industries: Machine tools, electric power equipment, automation equipment, railroad equipment, shipbuilding, aircraft, motor vehicles and parts, electronics and communications equipment, metals, chemicals, coal, petroleum, paper and paper products, food processing, textiles, clothing, other consumer goods
- Top Agricultural Products: Cereals, oilseed, potatoes, vegetables; cattle, sheep, poultry; fish
On June 23rd a referendum vote was held to decide if the UK should leave the European Union (EU). The EU is an economic and political partnership involving 28 European countries. Over 30 million people voted, and with 52% of the vote, the decision was made for the UK to leave the EU.
In the EU’s constitution, there is a provision titled Article 50, which makes provisions for countries who want to leave the EU. Once a motion to move forward with Article 50 has been set by the UK, which will likely happen in 2017, the UK will have two years to negotiate the withdrawal. Brexit Secretary David Davis has suggested the country could formally sever its relationship with the EU by December 2018. Because the UK is the first country to end its relationship with the EU, predicting the length of time the process will take, is really anybody’s guess. Former Foreign Secretary Philip Hammond, now Chancellor, has suggested it could take up to six years for the UK to complete exit negotiations. The terms of Britain’s exit will have to be agreed by 27 national parliaments, a process which could take a significant amount of time. EU law still stands in the UK until Brexit is complete. The UK will continue to abide by EU treaties and laws, but not take part in any decision-making.
The majority of businesses in the UK were opposed to Brexit, because being in the EU makes it easier for them to move money, people and products around the world. Given the role of London as a financial center, there’s interest in how many jobs may be lost to other hubs in the EU.
A report by the Bank of England, published in July, indicates the UK economy may have withstood the shock of the Brexit vote. Most of the data was gathered before the result but information gathered after the vote showed that there is no clear evidence of a sharp general slowing in activity despite an increase in uncertainty.
The pound lost more than 10% of its value against the US dollar since Brexit. With the pound worth about $1.32, this is down to the lowest levels since 1985.
Some experts believe the UK will remain a single market, The single market is seen by its advocates as the EU’s biggest achievement and one of the main reasons it was set up in the first place. Britain was a member of a free trade area in Europe before it joined what was then known as the common market. In a free trade area countries can trade with each other without paying tariffs – but it is not a single market because the member states do not have to merge their economies together. The European Union single market, which was completed in 1992, allows the free movement of goods, services, money and people within the European Union, as if it was a single country.
As the Brexit process continues, and more questions become answers, we will update our Country Risk to reflect the current business process on the UK.
Comparative Economic Indicators – 2018
|Population growth rate (%)||0.51||0.67||0.37||-0.17||0.94||0.80|
|GDP* (USD billions)||2,925.0||529.2||2,588.0||4,199.0||381.2||518.0|
|GDP* per capita (USD)||44,300||46,400||44,100||50,800||72,100||51,200|
|GDP real growth rate (%)||1.7||1.7||2.3||2.5||1.9||2.1|
|Unemployment rate (%)||4.4||7.1||9.4||3.8||4.2||6.7|
|Exports (USD billions)||441.2||300.8||549.9||1,434.0||102.8||165.6|
|Imports (USD billions)||615.9||300.4||601.7||1,135.0||95.06||153.2|
|Public debt (% of GDP)||87.5||103.4||96.8||63.9||36.5||40.8|
Exchange rates (per USD)
Exchange rates (per EUR)
* PPP – Purchasing Power Parity
Information from CIA World Factbook and OANDA Forex Trading and Exchange Rate Services
Credit and Collections
Payments and Dispute Resolution
International disputes are resolved through litigation in the UK Courts or by arbitration, mediation, or some other alternative dispute resolution (ADR) method.
As a member of the International Center for Settlement of Investment Disputes, the UK accepts binding international arbitration between foreign investors and the state. As a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the UK permits local enforcement on arbitration judgments decided in other signatory countries.
UK business contracts are legally enforceable in the UK, but U.S. or other foreign contracts are not.
Performance bonds or guarantees are generally not needed in British commerce, nor is any technology transfer, joint venture, or local management participation or control requirement imposed on suppliers. Government and industry encourage prompt payment, but a tradition does not exist of providing an additional discount to encourage early settlement of accounts.
Coface Country Rating: A2
Coface Business Climate Rating: A1
Credendo Political Risk Rating: 1 ” Lowest risk (1-7)
Credendo Commercial Risk Rating: B ” Mid level risk (A, B, C)
After reporting better performances than many of major advanced economies in 2015, UK growth should decline in 2016 against the backdrop of rising uncertainty linked to a possible “Brexit” (leaving the European Union) which could way on business and household confidence. It will still be sustained by private consumption, associated with wage growth (the minimum wage increased by 3% at the end of 2015) and the ongoing improvement of the labor market situation, all of this in a favorable context of low borrowing costs and lower savings rate.
Market Access: With a few exceptions, the UK does not discriminate between nationals and foreign individuals in the formation and operation of private companies. U.S. companies establishing British subsidiaries generally encounter no special nationality requirements on directors or shareholders, although at least one director of any company registered in the UK must be ordinarily resident in the UK. Once established in the UK, foreign-owned companies are treated no differently from UK firms.
Transparency of Regulatory System: U.S. exporters and investors generally will find little difference between the U.S. and UK in the conduct of business. Common law prevails in the UK as the basis for commercial transactions, and the International Commercial Terms (INCOTERMS) of the International Chambers of Commerce are accepted definitions of trading terms.
Economic Freedom: The United Kingdom’s economic freedom score is 76.4, making its economy the 10th freest in the 2016 Index. The UK is ranked 4th out of 43 countries in the European region, and its overall score is much higher than the world average.
Conversion and Transfer Policies: The British pound sterling is a free-floating currency with no restrictions on its transfer or conversion. There are no exchange controls restricting the transfer of funds associated with an investment into or out of the UK. All exchange controls were repealed in 1987.
Corruption: The Prevention of Corruption Act makes bribery of domestic or foreign public officials a criminal offense. Although isolated instances of bribery and corruption have occurred in the UK, investors have not identified corruption of public officials as a factor in doing business in the UK.
See the section on “People” above. It is important that you do not use the term “English” to refer to someone from Ireland, Wales or Scotland. In the UK, there is still “class” consciousness, despite people from varied backgrounds having greater access to higher education and wealth. “Class” is no longer determined by wealth or where someone lives. It’s determined by more complex variables including demeanor, accent, manners and comportment.
Business Cards: Business cards are exchanged at the initial introduction without any formal ritual.
Business Attire: Conservative dress is the norm for both men and women in British business culture where darker colors (black, dark blue, charcoal grey) and heavier fabrics (wool) predominate.
Names and Titles: Most people use the courtesy titles or Mr, Mrs or Miss and the surname. Wait until invited before moving to a first-name basis.
Conversation and Communication: The British are generally more reserved than people from North and South America, and Southern Europe. They expect others to respect their privacy. The older generation in particular tend to be sticklers for adherence to protocol. First names are not generally used in written communication, unless you know the person well. E-mail also tends to be more formal, at least initially, than in many other countries. Most British will not use slang or abbreviations and will think negatively if your communication appears overly familiar.
Gifts: Giving gifts is not a normal part of British business culture. The only exception would be at the conclusion of a deal when it might be appropriate to give a unique commemorative item to mark the occasion.
Business Meetings: If you plan to use an agenda, be sure to forward it to your British colleagues in sufficient time for them to review it and recommend any changes. Punctuality is important. In most cases, the people you are meeting will be on time. Meetings are generally rather formal.
Negotiations: While younger, junior employees are perfectly capable of conducting negotiations at a distance, it is always desirable to send older, senior representatives to the United Kingdom for face-to-face discussions. This is particularly true of the manufacturing and financial sectors where many senior managers, and even executives, may have relatively few formal educational or professional qualifications but have worked their way up from the bottom. Attitudes are changing gradually, but there remains a strong tradition in the UK of learning your trade â€˜on the job’ and valuing experience more than certificates. Consequently, older people are often better able to assume the air of dignified authority that is respected in British business culture.
In keeping with their undemonstrative nature, British businessmen approach their work in a detached way that regards objective facts and solid evidence as the only legitimate forms of persuasion; feelings and personal relationships are usually irrelevant.
Acceptable Public Conduct: Britons, and the English in particular, are notoriously undemonstrative. The â€˜stiff upper lip’ is a real attribute of the English. Emotional displays are generally frowned upon. A wide distance should be maintained between participants in a conversation. Talking loudly is unacceptable.
There is nowhere in England that is more than 75 miles from the sea.
London is one of only two cities above the 50th parallel with a population of more than five million. Moscow is the other.
The United Kingdom recently named chicken tikka masala as its national dish, which is a spicy curry created in Britain and is unheard of in India.
The first fish and chips restaurant was opened in 1860 in London by a Jewish immigrant named Joseph Malin.
Each day, the British drink 165 million cups of tea, which is over 20 times more than the average American.
30% of Londoners were born outside of the United Kingdom.
Big Ben does not refer to the famous clock, but actually to the bell.
Champagne was invented in England by scientist Christopher Merret in 1662.
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This information is provided by ABC-Amega Inc. Providing international receivable management and debt collection services for exporters to more than 200 countries including the United Kingdom. For further information, contact [email protected].
This report represents a compilation of information from a wide variety of reputable sources.
Comparative Economic Indicators: CIA World Factbook, Federation of International Trade Associations (FITA) Country Profiles.
Risk Assessment information: Provided with permission by Coface Country Rating. Also Belgian credit insurance company Ducroire Delcredere
Historical Exchange Rates: OANDA.com The Currency Site.