Abstract
This staff report on United Kingdom’s (UK) 2013 Article IV Consultation highlights economic policies and development. The UK economy grew by about ¼ percent in 2012. Net trade reduced growth by 0.6 percentage points of GDP, the biggest drag since 2005, and well above staff projections. Domestic fixed capital investment was essentially flat, leaving household spending the main source of private demand, but still substantially below long-run potential growth. In terms of production, construction has been particularly affected by the financial crisis, and the mining sector has been experiencing a secular decline, accelerated in part by temporary shutdowns in North Sea oil extraction.
Fund Relations
(Data as of May 31, 2013)
Membership Status: Joined December 27, 1945; accepted Article VIII.
General Resources Account:
| SDR Million | Percent Quota | ||
|---|---|---|---|
| Quota | 10,738.50 | 100.00 | |
| Fund holdings of currency | 7,503.81 | 69.88 | |
| Reserve Tranche Position | 3,234.75 | 30.12 | |
| Lending to the Fund | |||
| New Arrangement to Borrow | 2,303.34 | ||
| SDR Million | Percent Quota | ||
|---|---|---|---|
| Quota | 10,738.50 | 100.00 | |
| Fund holdings of currency | 7,503.81 | 69.88 | |
| Reserve Tranche Position | 3,234.75 | 30.12 | |
| Lending to the Fund | |||
| New Arrangement to Borrow | 2,303.34 | ||
SDR Department:
| SDR Million | Percent Allocation | |
|---|---|---|
| Net cumulative allocation | 10,134.20 | 100.00 |
| Holdings | 9,610.11 | 94.83 |
| Designation Plan | 0.00 |
| SDR Million | Percent Allocation | |
|---|---|---|
| Net cumulative allocation | 10,134.20 | 100.00 |
| Holdings | 9,610.11 | 94.83 |
| Designation Plan | 0.00 |
Outstanding Purchases and Loans: None
Financial Arrangements: None
Projected Payments to Fund: (SDR million; based on present holdings of SDRs):
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2013 | 2014 | 2015 | 2016 | 2017 | |
| Principal | |||||
| Charges/Interest | 0.16 | 0.37 | 0.37 | 0.37 | 0.37 |
| Total | 0.16 | 0.37 | 0.37 | 0.37 | 0.37 |
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2013 | 2014 | 2015 | 2016 | 2017 | |
| Principal | |||||
| Charges/Interest | 0.16 | 0.37 | 0.37 | 0.37 | 0.37 |
| Total | 0.16 | 0.37 | 0.37 | 0.37 | 0.37 |
Exchange Rate Arrangement:
The UK authorities maintain a free floating regime.
The United Kingdom accepted the obligations of Article VIII, Sections 2, 3, and 4 on February 15, 1961. It maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions, except for exchange restrictions imposed solely for the preservation of national or international security. In accordance with UN resolutions and EU restrictive measures, the United Kingdom applies targeted financial sanctions under legislation relating to Al-Qaeda and Taliban, and individuals, groups, and organizations associated with terrorism; and certain persons associated with: the former Government of Iraq, the former Government of Liberia, the current Government of Burma (aka Myanmar), the former Government of the Republic of Yugoslavia and International Criminal Tribunal Indictees, the current Government of Zimbabwe, the current government of Belarus, the current government of North Korea; the current government of Iran and persons considered to be a threat to peace and reconciliation in Sudan, Cote d’Ivoire, and Democratic Republic of Congo; and persons considered by the UN to have been involved in the assassination of former Lebanese Prime Minister Rafik Hariri. These restrictions have been notified to the Fund under Decision 144–(52/51).
Article IV Consultation:
The last Article IV consultation was concluded on July 16, 2012. The UK is on the standard 12 –month consultation cycle.
FSAP
The FSAP update was completed at the time of the 2011 Article IV Consultation.
Technical Assistance: None
Resident Representative: None
Statistical Issues
Economic and financial data provided to the Fund are considered adequate for surveillance purposes. The United Kingdom subscribes to the Special Data Dissemination Standard (SDDS) and meets the SDDS specifications for the coverage, periodicity, and timeliness of data. SDDS metadata are posted on the Dissemination Standard Bulletin Board (DSBB).
TABLE OF COMMON INDICATORS REQUIRED FOR SURVEILLANCE
(As of June 19, 2013)
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
TABLE OF COMMON INDICATORS REQUIRED FOR SURVEILLANCE
(As of June 19, 2013)
| Date of latest observation |
Date received |
Frequency of Data7 |
Frequency of Reporting 7 |
Frequency of Publication |
|
|---|---|---|---|---|---|
| Exchange Rates | Same day | Same day | D | D | D |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | May 2013 | 06/05/2013 | M | M | M |
| Reserve/Base Money | May 2013 | 06/05/2013 | W | M | M |
| Broad Money | April 2013 | 05/31/2013 | M | M | M |
| Central Bank Balance Sheet | May 2013 | 05/30/2013 | W | W | W |
| Consolidated Balance Sheet of the Banking System | April 2013 | 05/31/2013 | M | M | M |
| Interest Rates2 | Same day | Same day | D | D | D |
| Consumer Price Index | May 2013 | 06/18/2013 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3 – General Government4 | Q4 2012 | 05/23/2013 | Q | Q | Q |
| Revenue, Expenditure, Balance and Composition of Financing3 – Central Government | April 2013 | 05/22/2013 | M | M | M |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | April 2013 | 05/22/2013 | M | M | M |
| External Current Account Balance | Q4 2012 | 05/27/2013 | Q | Q | Q |
| Exports and Imports of Goods and Services | April 2013 | 06/07/2013 | M | M | M |
| GDP/GNP | Q1 2013 | 05/23/2013 | Q | Q | Q |
| Gross External Debt | Q4 2012 | 05/27/2013 | Q | Q | Q |
| International Investment Position6 | Q4 2012 | 05/27/2013 | Q | Q | Q |
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
TABLE OF COMMON INDICATORS REQUIRED FOR SURVEILLANCE
(As of June 19, 2013)
| Date of latest observation |
Date received |
Frequency of Data7 |
Frequency of Reporting 7 |
Frequency of Publication |
|
|---|---|---|---|---|---|
| Exchange Rates | Same day | Same day | D | D | D |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | May 2013 | 06/05/2013 | M | M | M |
| Reserve/Base Money | May 2013 | 06/05/2013 | W | M | M |
| Broad Money | April 2013 | 05/31/2013 | M | M | M |
| Central Bank Balance Sheet | May 2013 | 05/30/2013 | W | W | W |
| Consolidated Balance Sheet of the Banking System | April 2013 | 05/31/2013 | M | M | M |
| Interest Rates2 | Same day | Same day | D | D | D |
| Consumer Price Index | May 2013 | 06/18/2013 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3 – General Government4 | Q4 2012 | 05/23/2013 | Q | Q | Q |
| Revenue, Expenditure, Balance and Composition of Financing3 – Central Government | April 2013 | 05/22/2013 | M | M | M |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | April 2013 | 05/22/2013 | M | M | M |
| External Current Account Balance | Q4 2012 | 05/27/2013 | Q | Q | Q |
| Exports and Imports of Goods and Services | April 2013 | 06/07/2013 | M | M | M |
| GDP/GNP | Q1 2013 | 05/23/2013 | Q | Q | Q |
| Gross External Debt | Q4 2012 | 05/27/2013 | Q | Q | Q |
| International Investment Position6 | Q4 2012 | 05/27/2013 | Q | Q | Q |
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).