- The United Kingdom has an outsize economic impact – it’s the 80th biggest country but it has the 5th largest GDP in the world.
- The uncertainty surrounding Brexit has caused the UK economy to take a hit. The British pound has lost 14% of its value versus the US dollar since the 2016 referendum.
- Here are nine hard-to-believe facts about the UK’s economy.
- Visit MarketsInsider.com for more stories.
The United Kingdom’s economy has been in the global spotlight ever since the nation voted to leave the European Union in 2016.
Since then, the historic Brexit vote has spurred British companies to flee for other EU countries and sent the British pound on a roller coaster ride.
The exact parameters of the UK’s exit from the EU remain unclear, leaving the nation’s economy in a position of uncertainty. Prime Minister Theresa May announced her resignation last month after she wasn’t able to get her Brexit deal through Parliament, passing the terms of the exit onto a future successor.
But the UK’s economy, like its people, remain resilient. Here are 10 facts you may not have known about the UK’s economy.
The UK has the world’s 5th largest GDP despite being the 80th largest country
Despite the disruption of Brexit, the UK had a robust gross domestic product of $US2.64 trillion in 2017, according to the World Bank. The country continues to have the fifth largest GDP in the world, after the US, China, Japan, and Germany.
This feat is even more impressive when you consider that the UK is 80th largest in land area – it’s roughly the size of Michigan.
The UK may not be known as an oil country, but crude petroleum was its 3rd biggest export in 2018
When you think of the UK you might think of rolling green hills covered by placid flocks of grazing sheep. But offshore oil rigs and Brent crude are also a big part of the UK economy.
Petroleum exports were worth $US17.8 billion in 2018, according to the Observatory for Economic Complexity at MIT. The CIA’s World Factbook lists the UK as the 21st largest producer of crude oil, with estimated production of 933,000 barrels a day in 2016.
The British pound sterling has lost 14% of its value versus the US dollar since the Brexit referendum in 2016
Since the Brexit referendum in June 2016, the pound has fallen 14% versus the US dollar, though the British currency has partially rebounded on several occasions. The BBC reported that UK households have each effectively lost 900 pounds, or about $US1,140, because of the currency turmoil surrounding Brexit.
A no-deal Brexit could send the UK economy into a deeper recession than 2008
As damaging as Brexit has been to the UK pound, the damage to the British economy could get worse. If the UK leaves the EU without a negotiated deal (a so-called no-deal Brexit), the nation’s GDP could plummet 8% and unemployment might rise to 7.5%, according to Bank of England projections. The Organisation for Economic Cooperation and Development has echoed this prediction.
8 unbelievable facts about Iran’s economy
The UK has the fifth highest number of billionaires despite having the 21st highest population
The UK had 145 billionaires in 2018, making it the country with the fifth most billionaires in the world. The UK has a population of 67 million, meaning one out of every 462,000 or so Britons is a billionaire. That’s about the same rate as the US, where one out of every 466,000 or so Americans is a billionaire.
Buckingham Palace is the most expensive home in the world
There is plenty of old money in the UK – very old money. According to Architectural Digest, Buckingham Palace, home to the British royal family, is the world’s most expensive home, valued at $US1.55 billion. CNBC estimated the net worth of the royal family at $US1 trillion, second only to Saudi Arabia’s House of Saud monarchs.
You can buy a private island in the UK for $US351,000
If your means are more modest, you still might be able to afford your own private island in the UK.
The Island of Linga, off the coast of Shetland, is for sale for about $US351,000. The Shetland Islands are the most northern outpost of the UK, closer to Norway than Scotland. The purchase price for Linga includes a loch and building permits but no complete structures. The island’s two stone cottages stand roofless, so consider this isle a fixer-upper.
Britain’s National Health Service is the 5th biggest employer in the world
The National Health Service (NHS) provides free healthcare across the UK. It also provides jobs – a lot of jobs. Forbes ranked the NHS as the fifth largest employer in the world, with 1.5 million employees.
The UK levies a 20% sales tax on most goods and services
Before you grumble about paying 10% tax on your next purchase at a US store, consider the UK’s VAT (value added tax). The tax is 20% on most goods and services. Unlike in the US, UK businesses must include VAT in the price, so you might not notice the charge.
Compare this to the US, which has a patchwork of tax rates that top out at 11.5% in Oklahoma City.
But amazingly, Britian’s VAT is not among the highest in the world. Iceland, Greece, Norway, Finland, Sweden, Denmark, and Croatia impose VATs that top out between 24 and 25%. And India adds a sales tax of 28% to some luxury products.
In the UK, books, magazines, newspapers, and other publications are excluded from VAT.
Business Insider Emails & Alerts
Site highlights each day to your inbox.