Uk presentation

A Business Environment Analysis Of ‘UNITED KINGDOM’

PresentersMd Mojahid IslamMd K R KhanManoj Agrawal

INTRODUCTION

• The United Kingdom, the UK, or Britain is a sovereign state located off the north-western coast of continental Europe.

• It is governed by a parliamentary system with its seat of government in the capital city of London

• UK is surrounded by the Atlantic Ocean, the North Sea, the English Channel, and the Irish Sea.

Continue………….. The United Kingdom is a constitutional

monarchy and unitary state. It is a country consisting of four countries

countries Capitals1. England----------------------London2. Wales------------------------Cardiff3. Scotland---------------------Edinburgh4. Northern Ireland-----------Belfast National Capital - London

Current figures

Population GDP (2010) % change

2010 estimate 62,041,708 (Q1) £ 324982 0.4

2001 census 58,789,194 (Q2) £ 328769 1.2

Per capita $408,753 (Q3) £ 331399 0.8

Currency (£) Pound (GBP) (Q4) £ 329566 -0.6

ECONOMY

• The economy of the United Kingdom is the sixth-largest national economy in the world measured by nominal GDP and purchasing power parity (PPP)

• third-largest in Europe measured by nominal GDP

• second-largest measured by PPP• the 20th highest in the world in nominal

terms and the 17th highest measured by PPP

Continue……….• The UK is a member of the Commonwealth of

Nations, the European Union, the G7, the G8, the G20, the International Monetary Fund, the Organization for Economic Co-operation and Development, the World Bank, the World Trade Organization and the United Nations.

• The UK is one of the world's most globalised countries. London is the world's largest financial centre alongside New York, has the largest city GDP in Europe and is home to the headquarters of more than 100 of Europe's 500 largest companies

The Industrial Revolution

• In the 18th century the UK was the first country in the world to industrialize, and for much of the 19th century possessed a dominant role in the global economy

• the major technological advances associated with the industrial revolution were concerned with spinning. James Hargreaves created the Spinning Jenny, a device that could perform the work of a number of spinning wheels

Continue………..• During the First Industrial Revolution,

the industrialist replaced the merchant as the dominant figure in the capitalist system. In the latter decades of the 19th century, when the ultimate control and direction of large industry came into the hands of financiers, industrial capitalism gave way to financial capitalism and the corporation

• New products and services were also introduced which greatly increased international trade

2008-09 recession and quantitative easing

The UK entered its worst recession in 2008 after World War 2, as part of a global economic downturn. On 5 March 2009, the Bank of England announced that they would pump £75 billion of new capital into the British economy, through a process known as quantitative easing.The economy began to climb its way back into growth in late 2009: by Q4 of 2009 with a weak 0.4%; followed by a 0.3% growth in Q1 of 2010.

MANUFACTURING

Manufacturing is one of the fastest growing sectors of the UK’s economy

• This sector strengthening to the British economy since the 1960s,

• In manufacturing industry accounted for 16% of national output in the UK and for 13% of employment

Aerospace industry

• Aerospace industry of the UK is the second largest aerospace industry in the world

• The industry employs around 113,000 people directly and around 276,000 indirectly

• Annual turnover of around £20 billion.

Pharmaceutical industry

• Employees around 67,000 people in the UK

• Contribution of £8.4 billion to the UK's GDP

• Investment in R&D of £3.9 billion • UK exports pharmaceutical products

total £14.6 billion

•

FISCAL POLICY

Fiscal policy involves the use of government spending, taxation and borrowing The fiscal policy transmission mechanism

• Direct taxation is levied on income, wealth and profit. Direct taxes include income tax, national insurance contributions, capital gains tax, and corporation tax.

• Indirect taxes are taxes on spending – such as excise duties on fuel, cigarettes and alcohol and Value Added Tax (VAT) on many different goods and services

Taxation

Income from selected range of taxes for the UK government 1999-00 2004-05

£ billion £ billion

Income tax 95.7 127.2

National Insurance contributions 56.1 78.1

VAT 56.4 73.0Corporation tax 34.3 34.1

Fuel duties 22.5 23.3

Council Tax 13.1 20.1

Business rates 15.4 18.7

Other taxes 8.1 11.7

Stamp duties 6.9 9.0

Tobacco duty 5.7 8.1

Vehicle excise duty 4.9 4.7

Beer & cider duties 3.0 3.3

Inheritance tax 2.1 2.9

Spirits duties 1.8 2.4

Capital gains tax 2.1 2.3

Wine duties 1.7 2.2

Customs Duties & levies 2.0 2.2

Betting & Gaming duties 1.5 1.4

Petroleum revenue tax 0.9 1.3

Air Passenger duty 0.9 0.9

Source: HM Treasury Public Finance Statistics

MONETARY POLICYThe regulation of the money supply and

interest rates by a central bank The purpose of Monetary policy is:

1. Directly control the rate of inflation 2. Influence the level of economic activity 3. Influence the Exchange rate

There are 2 types of Monetary Policy:

1. Direct Control of the Money Supply: This was used in the early period of Demand Management, but hasn’t been used in the UK in the 1990s.

2. Influencing the demand for credit by using interest rates.This is the main tool of current UK monetary policy

The role and function of the Bank of England

1. The issuing of notes and coins. This allows the B of E to control the Supply of cash in the economy

2.The Banker of the commercial banks. E.g. Natwest will have an account at the B of E

Continue………

3. Acting as a lender of last resort. If commercial banks need to give money to their customers they can always borrow from the B of E.

4. Issuing and managing government debt. The bank of England will sell Bills to the private sector to raise money for the PSNCR.

5. Set the base Interest rate which determines the Mortgage rates and other commercial interest rates

INFLATION• Inflation is a rise in the general level of prices of

goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services.

UK’s inflation and multiplier, from 2000 to 2009

Year Inflation Multiplier2009 -0.5% 1.02008 4.0% 1.02007 4.3% 1.02006 3.2% 1.12005 2.8% 1.12004 3.0% 1.12003 2.9% 1.22002 1.7% 1.22001 1.8% 1.22000 3.0% 1.3

Annual inflation rates - 12 month percentage change in UK

CPI annual inflation – the Government’s target measure – was 4.0 per cent in January, up from 3.7 per cent in December.

RECENT BUSINESS ACTIVITIES

• U.K entered a recession Q2 of 2008, according to the UK Office of National Statistics (ONS) and exited it in Q4 of 2009.

• By the end of the recession the economy had shrunk by 4.9%

• The unemployment rate among 18 to 24-year-olds has risen from 11.9% to 17.3%.

UK AND INDIA AS BUSINESS PARTNER

"It is in the interest of the world economy and politics that in an increasingly interdependent world, international institutions should be representative of contemporary realities. … We can’t deal with global problems unless India is at the global high table".

Manmohan Singh

"As the world's centre of gravity moves from Europe and the Atlantic to the south and the east I believe it's time for Britain and India to forge a new special relationship".

David Cameron

India seeks to increase its bilateral trade with the UK to £ 24 billion in the next five years from £ £ 11.5 billion in 2009 and £ 12.6 bn in 2008.

The UK is the largest European investor in India and the fourth largest internationally .

The UK is to invest another £825 million for development in India over  three years ending 2011.

UK is one of the most important source of FDI for India not only amongst the EU countries but also vis-à-vis other countries in the world.

UK is India’s largest trading partner in Europe with 6.4 percent market share.

UK's Trade with India (2008-09)

Total 2006-07 2007-08 2008-09*

Exports of goods

5.6

7.0 5.6

Imports of goods 4.2

5.0 5.4

Total Trade in Goods 9.8

12.0 11.0

*April, 2008-February,2009Source: Office of the High Commission of India, London

TARGET SECTORS

• Under the Indo-British Partnership (IBP) programme, the UK government has identified the following sectors of Indian economy as target sectors and currently giving special emphasis:

• IT & Electronics • Telecommunication, Radio Communications & Broadcasting Equipment• Agriculture, Horticulture and Fisheries • Automotive Industry • Education and Training• Environmental Industry • Financial Services • Healthcare and Medical Equipment• Recreation and Leisure • Biotechnology • Pharmaceuticals

EXPORT-IMPORT COMPOSITIONUK Exports to India (2007)

(In £ million)

January 2006

January 2007

Year-on-Year Change (%)

Non-Metallic Mineral Manufactures126877 97307 -23.3

Power generating machinery & equipment3843 25592 566.0

Other transport equipment12184 12852 5.5

General Industrial Machinery13956 10247 -26.6

Machinery specialized for particular industries

6757 9386 38.9

Iron and steel4597 8922 94.1

Electrical machinery, apparatus & appliances7268 7683 5.7

Metalliferous ores & metal scrap7892 7170 -9.1

Non-ferrous metal1631 6311 286.9

Professional, scientific & controlling instruments

5724 4992 -12.8

January 2006

January 2007

Year-on-Year

Change (%)

Misc. manufactured articles nes

5520 4168 -24.5

Medicinal & pharmaceutical products

1281 2310 80.3

Organic chemicals

1853 2191 18.2

Office machines & ADP machines

1680 2093 24.6

Telecom & sound recording & reproducing 

2013 1797 -10.7

Pulp and waste paper

1759 1324 -24.7

Others 

19337 26179 35.4

Continue……….

UK Imports from India (2006)(In £ million)

July 2006 2005 2006Year-on-Year change(%)

Articles of apparel and clothing accessories 51699 57387 11.0

Textile yarn, fabrics, made-up articles, nes 20731 24499 18.2

Manufactures of metal nes 16112 17841 10.7

Miscellaneous manufactured article nes 15167 16269 7.3

Power generating machinery & equipment 8284 13645 64.7

Organic chemical 8122 11754 44.7

Footwear 10916 11634 6.6

Non-metallic mineral manufactures 7420 11053 49.0

July 2006 2005 2006Year-on-Year change(%)

Electrical machinery, apparatus & appliances, nes & electrical parts thereof

8886 10988 23.7

General industrial machinery & equipment, nes & machine parts

6834 9541 39.6

Medicinal & pharmaceutical products6893 8396 21.8

Travel goods, handbags and similar & equipment  6048 6511 7.7

Fish ( not marine mammals), crustaceans, mollusks4016 6016 49.8

Road vehicles9191 5559 -39.5

Cereals & cereal preparations6426 4469 -30.4

Vegetables & fruits 4390 3809 -13.2

Others66414 111066 67.2

Continue……….

UK Exports to India (2000-2002)( In £ million)

  2001 2000 2002  % Change

Non Metallic Minerals 776.4 741.6 786.8 1.3

Non-ferrous Metals 140.0 168.1 87.9 -37.2

Power Generating Equipment 98.4 114.9 81.3 -17.3

Transport Equipment 87.9 84.4 128.7 46.4

Scientific Equipment 56.3 79.8 66.0 17.3

General Industrial Machinery 53.8 73.6 65.3 21.4

Special Industrial Machinery 48.4 58.4 50.3 3.9

Metals Ores and Scraps 92.5 53.7 64.2 -29.6

Electrical Machinery 54.2 54.1 59.4 9.6

Telecommunications 44.9 45.9 38.2 -14.9

Other 329.3 581.2 340.2 3.3

Total 1782.1 2055.7 1768.3 0.77

UK Imports from India (2000-2002)(In £ million)

                                                               2001 2000 2002 % Change

Apparel and Clothing 349.4 320.5 373.2 6.2

Textile Yarn and Fabric 284.8 263.9 251.7 -12.8

Misc. Manufactured Articles 144.5 137.8 161.4 11.8

Footwear 133.7 121.2 131.0 -1.5

Metal Manufactures 127.1 107.3 140.5 10.4

Power Generating Equipment 77.2 72.1 39.2 -47.8

Non Metallic Minerals 59.8 61.0 65.0 7.6

Vegetables and Fruit 51.7 50.7 49.2 -5.0

Organic Chemicals 53.4 43.7 55.1 3.0

Road Vehicles 38.7 39.7 31.8 -9.0

Other 563.7 494.3 572.1 0.5

Total 1884.0 1712.0 1870.2 1.04

THE END

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