Overall Market Condition of the UK

The UK’s economy is composed of different major industries such as aerospace, agriculture, automotive, financial service, pharmaceutical and biotechnology, healthcare, construction and real estate, transportation, energy, and chemicals, among others. Due to these, the country maintains its position as one of the top exporters and importers in the world. The British economy is also boosted by the production of North Sea oil and gas, which have reserves with estimated value of £250 billion in 2007.

The country was the first one to be industrialized in the eighteenth century and made significant contributions in the nineteenth century. After the two great World Wars the UK’s position in the global market weakened. Nonetheless, it still plays a vital role in the world economy particularly in its financial service industry in which the capital London is considered to be the largest finance center in the world with a contribution of around 78% for the GDP, and its pharmaceutical industry which has the third highest share of pharmaceutical research and development globally.

The UK experienced a severe recession caused by the financial crisis from 2007 to 2008, which is considered by many analysts as the worst since the 1930’s Great Depression due to total collapse of many huge financial institutions and significant fall of prices in stock markets around the world, and is currently recovering from it. In fact, the country experienced a sudden economic growth in 2007 and currently considered to be the fastest growing major developed country. As of the second quarter of 2014, its GDP is 0.2% above its pre-recession peak. According to the BBC news, the inflation rate in the country as of June 2014 on a year over year basis is 1.9% for the consumer price index due to expenditures on clothing and footwear, food, and non-alcoholic drinks; and a decreased retail price index of 2.4% from May’s 2.6%.

The UK’s capital London is considered to be the biggest trading center and the world’s capital for foreign exchange trading. Due to the city’s dominance in the market, the quoted price of a certain currency Is usually the London market price

Tons of investors are currently aiming to penetrate and invest into the UK’s market, thus contributing to the activeness of stock trading in the country. In fact, the London Stock Exchange (LSE) which is the primary stock exchange in the UK, is the largest in the whole Europe, and the 5th largest in the world. As of 31 May 2014, its market capital was $3.396 trillion, and the trade volume was $1.890 trillion, with 2,475 companies listed. The FTSE 100 or the Financial Times Stock Exchange 100 Share Index, is the most dominant index in LSE, containing 100 of the top blue chips.

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