It has now been five years since the United Kingdom left the European Union. While critics predicted that the British economy would collapse, this did not happen. Brexit did indeed create a lot of uncertainty among businesses and investors, leading to a decline in private consumption and business investment in 2023. But since then, the UK economy has experienced modest growth.
low risk for businesses
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Economic risk
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New opportunities
Main pillars
After Germany, the United Kingdom has the largest economy in Europe. One of its main pillars is the service sector. Financial services, business services, healthcare, education, information technology and tourism are just some of the sectors that make up this broad category. The City of London is an important hub for international banks, insurers and other financial institutions.
In contrast to the service sector, Britain's industrial sector is shrinking. Major industries include pharmaceuticals, automotive, aerospace, information technology and digital media, energy and telecommunications.
Inflation
Labour force
The United Kingdom has a highly educated labour force. 80% of British people aged 25 to 64 have a secondary school education or higher. The share of British people with a higher vocational or university diploma has increased from 40% in 2000 to 55% in 2023. The employment rate in the United Kingdom is 75.6% (2023). This is higher than the EU average of 73.2%. The labour participation rate among men (81.2%) is higher than among women (70.0%).
The IMF expects British unemployment to rise to 4.7% by 2024. A favourable side effect of this is that the overheated labour market can cool down slightly.
A new policy also states that job seekers who have not found a job after 18 months must participate in compulsory employment to increase their skills and employability. Anyone who refuses to do this for six months will lose their benefits.
Strengths and weaknesses
- Large trade balance surplus
- Healthy banking sector
- Great diversity of sectors and export products
- Friendly business environment
- Strong focus on innovation
- High debt of British government
- Low productivity growth
- Declining export performance
- Weak national health service
Import & Export
Main countries for imports and exports are:
(% of total, 2023)
| Export | Position | Import |
|---|---|---|
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United-States
13.8%
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1 |
12.5%
China
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Germany
7.6%
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2 |
12.0%
United-States
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The Netherlands
7.1%
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3 |
9.5%
Germany
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Switzerland
6.8%
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4 |
5.1%
France
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China
6.6%
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5 |
4.1%
Norway
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Main exported & imported products
Export
- Means of transport
- Oil and oil-related (chemical) products
- Pharmaceutical products
- Machines and electrical appliances
- Gold
Import
- Means of transport
- Oil and oil-related (chemical) products
- Gas
- Gold
- Machines and electrical appliances
How do you do business in the United Kingdom?
If you want to do business with a Brit, take your time. Contract negotiations never move quickly. They want to get used to you and your company before they start working with you. If you move too fast and push too much, they shrink back. Give them space and don't push. No matter how good you think your own product is, hold back. The more you say about yourself, your services or products, the more the British distance themselves.
You could call the desired interaction with British business partners 'excessively polite'. Don't hesitate to say 'thank you', 'I'm sorry' and 'please' frequently. Small talk about the weather or football is always good to break the ice. Be sure to go to the pub after work. But don't start talking about very political topics or personal matters. Keep things more neutral. If a joke is made, laugh politely but not too exuberantly.
Personal contact plays an important role when doing business with the British, but keep an appropriate distance. Private affairs and business remain separate, especially in the workplace. The British businessman is very punctual and expects the same from his guest. Any delay must be reported immediately. In addition, British people also attach great importance to manners. Have you had an appointment with someone? Don't forget to thank that person afterwards for their time, even if it was just for a short introduction.
Don't be too direct. That is considered rude and disrespectful. Keep criticism to yourself. They may be a bit less formal and reserved once a contract has been concluded, but even then they are unlikely to speak entirely frankly.
It helps if you speak English well. If your language is unclear, they are unlikely to point it out. They are too polite to say they don't understand you. They often won't say what they're thinking outright. The British are very good at ambiguity. It may be the case that you understand what your business partner is saying perfectly well, but that he or she means something different than you think. Someone who thinks something is 'not bad' may just be fine with it, but may also be extremely enthusiastic. If they say 'Oh, that's interesting' they may well find something ridiculous.
Need help for you export plans to the UK?
If you want to do business in the United Kingdom, the country offers plenty of opportunities, although you must take numerous considerations into account when making decisions. What conditions do you apply to the agreements you make? You need thorough insight into markets, customers and local economic developments. And that is exactly where trade credit insurer Allianz Trade can help you.
With over 100 years of international expertise, we help you (further) develop your business abroad. We specifically focus on companies that do business internationally, including in thre UK. We owe our unique knowledge of the local market to our extensive database of financial data and the expertise of our analysts. With our offices and colleagues in the UK we will provide you with the necessary expertise to securely develop your business in the UK.