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UK.pdf

April 2019

United Kingdom Statista Country Report

Featuring

risk indices

2

Dear Reader,

Find out more about the United Kingdom in our report focusing on the general economy, trade, investment, society, consumers, infrastructure, and politics. The Statista Country Report provides a comprehensive overview of the economy of United Kingdom, which can be relevant for manufacturing, foreign direct investment, and the importing and exporting business. Gain insight into the major trends in United Kingdom in order to assess the risks and opportunities relevant for international business.

Tytti Mälkki studied International Business in Copenhagen, São Paulo, and Beijing. Oliver Sánchez studied International Business and Local Comparative Development in Germany, Italy, Hungary, and Mexico. Volker Staffa studied Business with a focus on Logistics and Supply Chain Management in Hamburg and Rhode Island. Melanie Mesloh studied Innovation Economics and Entrepreneurship in Bremen.

Volker has been responsible for the Statista Industry Reports since 2012, while Oliver joined Statista last year after several years in marketing and strategy. Tytti has been part of Statista since summer 2017 and Melanie joined Statista in fall 2018.

We wish you a valuable and insightful reading experience.

Statista Country Reports

Tytti Mälkki

Oliver Sánchez

Volker Staffa

Melanie Mesloh

01

02

03

04

05

06

07

08

09

Introduction

▪ Overview

▪ Executive summary

▪ Business culture survey

Economy

▪ Economic conditions

▪ Public finances

▪ Labor force

▪ Business environment

Trade & Investment

▪ Merchandise trade

▪ Commercial services

▪ Investment

Fitch Solutions Risk Indices

▪ Development

▪ High and low performer

▪ Global and regional comparison

Society

▪ Population

▪ Income

▪ Human Development Index

Retail & Consumption

▪ Consumption

▪ Consumer behavior

▪ eCommerce

▪ FinTech

Infrastructure

▪ Digital

▪ Transport

Politics

▪ Political profile

▪ Political environment

Appendix

▪ Data description and methods

▪ Glossay

▪ Authors

3

Agenda

INTRODUCTION

4

▪ Overview

▪ Executive summary

▪ Business culture survey

5

Overview (1/3)

General information:

United Kingdom

1: Constant US$, see glossary for definition of current and constant US$ Source: CIA World Factbook 2018, United Nations, Department of Economic and Social Affairs, Population Division 2017, World Bank World Development Indicators 2018, International Monetary Fund, World Economic Outlook Database 2018, OECD Tax Database 2018, Columbia University, Statista 2018

Capital:

Official language(s):

Main religion:

Main ethnic group:

Population:

Area:

- Population density:

Total real GDP1 in 2018:

- GDP1 per capita:

Value added tax:

Corporate tax:

Currency:

- Exchange rate:

Time zone:

Calling code:

London

English

Christian

White European

66,573,504

243,610 sq km

272.9 people per sq km

US$3,044.9bn

US$45,811.64

20.0%

19.0%

British pounds (GBP)

USD/GBP = 0.75

UTC 0

+44

6 Source: CIA World Factbook 2018, World Bank World Development Indicators 2018

With 9 million in population, London is the largest urban area

Ethnic groups in % of populationReligious affiliation in % of population

Population in major urban areas in millions

2.0%

87.1% 3.0%

2.3%

5.6%

IndianOther

Black BritishMultiracial

White European

Land use in % of total area

25.7% 59.5%

7.2%

4.4%

2.0% 1.3%

13.0% 24.8% 62.0%

0.2%

Forest area Permanent cropland Arable land Other

9.0

2.7 2.6 1.9 1.7

0.9

West Yorkshire

GlasgowLondon ManchesterBirmingham Southampton/Portsmouth

Overview (2/3)

Christian

Unspecified

Muslim

Hindu

Other

None

7

Major airports in United Kingdom1

London Heathrow International Airport, London

▪ Airport code: LHR

▪ Distance to city center: 26 km

Manchester International Airport, Manchester

▪ Airport code: MAN

▪ Distance to city center: 14 km

Edinburgh International Airport, Edinburgh

▪ Airport code: EDI

▪ Distance to city center: 13 km

Belfast International Airport, Belfast

▪ Airport code: BFS

▪ Distance to city center: 24 km

Birmingham Airport , Birmingham

▪ Airport code: BHX

▪ Distance to city center: 23 km

Overview (3/3)

Flight times from regional hubs in hours (no. of stops)2

1: Busiest airports by number of Passengers-the UK CAA statistics 2: Most direct and fastest routes are considered. Flight times for 17th July 2019-Google Flights Note: Distances to city center are based on the shortest route calculated by Google Maps and rounded to full kilometers Source: Google Flights , Google Maps

The United Kingdom sports five major airports – flight time from the U.S. ca. 7-12 hours

Region Hub LHR MAN EDI BFS BHX

North America

New York City, the U.S. (JFK)

6:50 (0)

6:50 (0)

6:07 (0)

11:55 (1)

9:20 (1)

Latin America & Caribbean

São Paulo, Brazil (GRU)

11:25 (0)

13:45 (1)

15:00 (1)

NA 14:20

(1)

Europe & Central Asia

London, the UK (LHR)

0:00 (0)

1:00 (0)

1:20 (0)

83:35 (2)

3:10 (1)

East Asia & Pacific

Hong Kong, Hong Kong (HKG)

12:35 (0)

12:50 (0)

15:35 (1)

NA 14:55

(1)

South Asia Delhi, India (DEL)

8:35 (0)

11:20 (1)

11:10 (1)

NA 8:30

(0)

Middle East & North Africa

Dubai, the UAE (DXB)

7:25 (0)

7:40 (0)

7:55 (0)

NA 7:45

(0)

Sub- Saharan Africa

Johannesburg, South Africa (JNB)

11:10 (0)

13:25 (1)

14:00 (1)

NA 13:35

(1)

8

Economy

▪ Real GDP is forecast to increase by 1.6% p.a. from 2018 to 2023

▪ The United Kingdom had a fiscal deficit of -1.9% of GDP in 2017

▪ Household consumption expenditure in the United Kingdom was lower than in the overall region in 2017

▪ Unemployment rate was 4.3% in 2017 and has been decreasing since 2010

▪ It takes 4.5 days to start a business in the United Kingdom compared to 5.6 days in the U.S.

▪ The United Kingdom experiences a growth in the emergence of new businesses

▪ In the “labor market” area, the United Kingdom is 4.4 points behind the regional high performer

▪ With an index score of 77.7, the operational risk in the United Kingdom is relatively low

Executive summary (1/2)

Trade & Investment

▪ The United Kingdom registered a lower export trade flow than Germany in 2017

▪ With US329.6 billion, manufacturers accounted for 75% of the total merchandise export value in 2017

▪ The United Kingdom registered a lower export trade flow than Germany in 2017

▪ With US$43.8 billion, travel services accounted for 13% of total services export in 2017

▪ Inward FDI amounted to $15.09 billion in 2017

The United Kingdom is a high income country with a population growth of 0.6% in 2018

9

Society, retail & consumption

▪ Population increased by 0.6%, which is above regional average, to a total of 66,573,504 in 2018

▪ In 2015, the highest 20% held 40.6% of the income while the lowest 20% only held 7.5%

▪ In global comparison, the United Kingdom has a very high level of human development

▪ The retail market in the United Kingdom is well-developed

▪ Households in the United Kingdom spend their biggest share of their income on housing and utilities

▪ With US$93,082m and a share of 60%, eCommerce generates the highest digital revenues

▪ The total FinTech transaction value is forecast to grow by 55.5% from 2019 to 2023

▪ 97.1% used the internet and there were 118.8 mobile cellular subscriptions per 100 people

Executive summary (2/2)

Politics

▪ The United Kingdom is an older democracy

▪ Rule of Law in the United Kingdom is high in global comparison

▪ Control of corruption is rated as mediocre

▪ Regulatory quality in the United Kingdom is on a high level

▪ Moderate risks from political instability and threat of violence or terrorism

In global comparison, the United Kingdom has a very high level of human development

10

Doing business (1/2)

▪ Meetings are scheduled in advance and punctuality is given prime importance.

▪ Deadlines and sticking to established agreements are considered vital to grow trust and further business relations.

▪ Minutes are distributed to all parties concerned at the end of each meeting.

Things you didn‘t know about British business culture

Note: Please refer to the appendix for further information on the methodology of data collection Source: Statista 2019

▪ The British people prefer indirect communication. Small talk is encouraged to establish business relationships.

▪ Appropriate business attire and a strong handshake are essential in the corporate sector. Crossing one’s arms is considered confrontational, looking at one’s watch and taking calls during conversations unprofessional.

▪ English is the official language used by most businesses.

▪ Hierarchy is rather important in the business environment.

▪ Bargaining is rare.

▪ Conflict management is based on discussions and sharing opinions. The goal is to arrive at a solution that satisfies both parties.

Communication standards Business meeting procedures

Conflict management

11

▪ Maintaining a strong business network through personal and professional contacts is very important to do business.

Doing business (2/2)

▪ Although gender equality is advocated in the UK, inequality still exists in the corporate sector. The higher the position, the lesser is the chance to find women to hold the position.

▪ Business is slower than usual during the months of August, December and January.

▪ The British people give importance to a healthy-work life balance.

▪ However, it is not uncommon for people to be working overtime. This trend is gaining momentum due to the presence of many international companies.

Things you didn‘t know about British business culture

Note: Please refer to the appendix for further information on the methodology of data collection Source: Statista 2019

Importance of business networks

Slow business months Work-life balance

Gender equality

ECONOMY

12

• Economic conditions

• Public finances

• Labor force

• Business environment

13

Real GDP1 in billion US$2

Economic conditions: real GDP (1/3)

1: See glossary for definitions 2: Constant US$, see glossary for definition of current and constant US$ 3: CAGR: Compound Annual Growth Rate/average growth rate per year Source: International Monetary Fund, World Economic Outlook Database 2018, Statista 2018

Real GDP is forecast to increase by 1.6% p.a. from 2018 to 2023

20122008 2015

3,136.9

20212011 20182009 20142013

3,002.9 2,900.5

2010

2,755.4

20232016 20192017 2022

3,090.6

2020

2,683.5 2,575.3 2,619.8

2,662.4 2,700.2 2,835.3

2,952.7 3,044.9

3,187.1 3,238.1 3,289.9+1.3%3

+1.6%3

International Monetary Fund estimate

14

Real GDP growth, real GDP and real GDP per capita1 in US$2 in selected European countries3 in 2018

Economic conditions: real GDP (2/3)

1: See glossary for definitions 2: Constant US$, see glossary for definition of current and constant US$ 3: Countries with a real GDP per capita higher than US$16,000 are excluded Note: Regional average value refers to the 150 countries covered by the Statista Country Reports Source: International Monetary Fund, World Economic Outlook Database 2018, Statista 2018

Real GDP growth at 1.4% was slower and real GDP per capita at US$45,812 was higher than average in 2018

0

1

2

3

4

5

6

10,000 20,000 70,0000 100,000 110,00030,000 120,00050,00040,000 60,000

Spain

Sweden Denmark

Ireland

Slovakia

Lithuania

France

FinlandCzechia Estonia

Greece

Iceland Luxembourg

Italy

Malta

Netherlands

Poland

Norway

Portugal

Real GDP per capita in US$

Latvia

Belgium

United Kingdom

Austria

Western Europe

Germany

Switzerland

Cyprus Slovenia

Regional averageReal GDP growth 2017-18 in % Real GDP: US$500 billion

15

Real GDP per capita1 in US$2 in 2018

Economic conditions: real GDP (3/3)

1: See glossary for definitions 2: Constant US$, see glossary for definition of current and constant US$ 3: Democratic Republic of the Congo Note: data compared only for the 150 countries from the Statista Country Reports publication series. No data available for following countries: Cuba, North Korea, Somalia and Syria Source: International Monetary Fund, World Economic Outlook Database 2018, Statista 2018

United Kingdom has the 19th highest real GDP per capita

# Country/region GDP

30 Slovenia 26,841

31 South Korea 26,783

32 Cyprus 25,312

33 Portugal 24,851

34 Greece 23,614

35 Czechia 23,459

36 Bahrain 23,054

37 Saudi Arabia 21,062

38 Slovakia 20,718

39 Estonia 19,717

40 Oman 17,731

41 Lithuania 17,685

42 Chile 16,688

43 Poland 16,461

44 Latvia 16,132

45 Croatia 15,846

46 Russia 15,217

47 Hungary 13,975

48 Turkey 13,816

49 Equatorial Guinea 12,049

50 Malaysia 11,767

51 Costa Rica 11,397

52 Romania 11,346

53 Mexico 10,990

54 Panama 10,362

55 China (Mainland) 9,771

56 Lebanon 9,576

57 Kazakhstan 8,772

58 Bulgaria 8,688

# Country/region GDP

59 Turkmenistan 8,561

60 Uruguay 8,328

61 Belarus 8,316

62 South Africa 7,492

63 Dominican Republic 7,336

64 Botswana 7,081

65 Serbia 6,200

66 Brazil 6,164

67 Suriname 6,048

68 Montenegro 5,896

69 Bosnia and Herzegovina 5,746

70 Argentina 5,418

71 Peru 5,326

72 Colombia 4,868

73 Jamaica 4,517

74 Indonesia 4,323

75 Macedonia 4,314

76 Mongolia 4,246

77 Ecuador 4,217

78 Iraq 4,055

79 Timor-Leste 4,023

80 Tunisia 3,989

81 Gabon 3,719

82 Belize 3,632

83 Thailand 3,589

84 Morocco 3,393

85 Egypt 3,315

86 Namibia 3,228

87 Iran 3,132

# Country/region GDP

88 Ukraine 3,086

89 Guyana 2,976

90 Armenia 2,804

91 Albania 2,731

92 Nigeria 2,422

93 Paraguay 2,416

94 Azerbaijan 2,363

95 Algeria 2,313

96 Venezuela 2,310

97 Georgia 2,191

98 India 2,185

99 Philippines 1,952

100 Bhutan 1,947

101 Guatemala 1,936

102 Vietnam 1,920

103 Libya 1,784

104 Jordan 1,748

105 Honduras 1,691

106 Ivory Coast 1,655

107 Zambia 1,634

108 Nicaragua 1,622

109 Myanmar 1,602

110 Ghana 1,562

111 El Salvador 1,504

112 Bolivia 1,354

113 Republic of the Congo 1,333

114 Sudan 1,329

115 Uzbekistan 1,291

116 Kenya 1,288

# Country/region GDP

1 Luxembourg 111,404

2 Norway 99,968

3 Qatar 82,251

4 Switzerland 79,567

5 Ireland 78,275

6 Iceland 67,038

7 Australia 64,087

8 Denmark 62,543

9 Singapore 56,354

10 Netherlands 55,380

11 United States 53,820

12 Japan 53,306

13 Sweden 51,942

14 Austria 50,150

15 Belgium 49,447

16 Finland 48,515

17 Germany 48,104

18 Canada 47,558

19 United Kingdom 45,812

20 France 44,956

21 Hong Kong (SAR) 43,986

22 Italy 35,294

23 Israel 34,841

24 United Arab Emirates 33,829

25 Spain 33,593

26 New Zealand 31,830

27 Brunei Darussalam 31,744

28 Kuwait 30,830

29 Malta 28,684

# Country/region GDP

117 Angola 1,219

118 Pakistan 1,003

119 Zimbabwe 992

120 Bangladesh 971

121 Moldova 949

122 Djibouti 887

123 Rwanda 867

124 Laos 864

125 Cambodia 847

126 Cameroon 836

127 Tanzania 834

128 Senegal 824

129 Chad 796

130 Uganda 747

131 Gambia 707

132 Kyrgyzstan 675

133 Yemen 666

134 Ethiopia 663

135 South Sudan 662

136 Mozambique 620

137 Malawi 474

138 Burkina Faso 437

139 Mali 433

140 Sierra Leone 433

141 Nepal 407

142 Afghanistan 344

143 Congo (Dem Rep)3 280

144 Tajikistan 261

145 Niger 228

16

Value added1 by sector in % of GDP

Economic conditions: value added by sector

1: See glossary for definitions Source: World Bank World Development Indicators 2018

Services accounted for 70.1% of GDP in 2017

70.0% 75.0%

80.0%

20.0% 15.0%

10.0%

6.0% 7.0% 8.0%

0.6%

70.6%

0.6%

2014

0.5%

18.1%

10.8% 10.8%

70.7%

17.8%

10.8%

70.1%

18.6%

IndustryOther Services Agriculture

2011 2017

17

Inflation1 and central bank interest rates2 in %

Economic conditions: inflation and interest rates

1: Percent change in annual average consumer prices 2: Monetary policy-related interest rate, percent per annum 3: As central bank interest rate changes are highly dependent on macro economic developments we assume a constant development Source: International Monetary Fund, World Economic Outlook Database 2018, International Monetary Fund International Financial Statistics Database 2018

Falling interest rates while inflation is increasing from 2015 to 2016

2021 20222007 2008 2013 2018201620112009 2010 2015 20232012 2017 202020192014

0.3%

2.0%

0.5%

2.7%

0.5% 0.3%

2.0%

0.3%

2.3% 2.0%

0.5%

2.2%

3.3%

2.6% 2.8%

1.5%

0.5%

0.0%

0.7%

0.3%

5.5%

3.6%

0.5%

4.5%

0.5%

2.0%

0.5%

2.5% 2.2%

0.3% 0.3%

2.0%

0.3% 0.3%

When interest rates are low, individuals and businesses tend to take more loans. Each bank loan increases the money supply in a fractional reserve banking system. According to the quantity theory of money, a growing money supply increases inflation. Thus, a lower interest rate tends to result in a higher inflation. High interest rates tend to lower inflation. Consumers tend to save when interest rates are higher, as returns from savings are higher. More money put aside to savings means less disposable income. This results in slower economy and decreased inflation. Forecasts for interest rates are based on latest historical value in a no-change model3. Inflation levels are estimated after 2017 by the IMF.

Inflation Central bank interest rates

18

Expenses1 and revenues1 in % of GDP

Public finance: expenditure and revenue (1/3)

1: See glossary for definitions Source: World Bank World Development Indicators 2018

The United Kingdom had a fiscal deficit of -1.9% of GDP in 2017

2009 2013

34.7%

2017

36.7%

42.3%

33.8%

40.2%

35.5%

-5.3%

Expense Revenue

19

Expenditure in % of GDP in 2017

Public finance: expenditure and revenue (2/3)

1: Expenditure by resident households and non-profit institutions serving households on individual consumption goods and services 2: Expenditure on individual consumption goods and services and collective consumption services 3: Including acquisitions less disposals of valuables 4: Value of entries into inventories less value of withdrawals and value of any recurrent losses of goods held in inventories Source: United Nations National Accounts Estimates of Main Aggregates 2018

Household consumption expenditure in the United Kingdom was higher than in overall Europe & Central Asia in 2017

-40.2%

Other

0.6%

General government final consumption

expenditure2

17.3%

Household consumption expenditure1

Imports of goods and services

Gross capital formation3

Changes in inventories4

Exports of goods and services

65.7%

55.2%

-31.3%

18.2% 19.4% 21.7%

0.2%

30.2%

43.8%

-0.3% -0.6%

United Kingdom Europe & Central Asia

20

Government expenditure in bnUS$1 in 2016

Public finance: expenditure and revenue (3/3)

Government revenue in bnUS$1 in 2016

1: Current US$, see glossary for definition of current and constant US$ Source: World Bank World Development Indicators 2018

Government expenditure has reached US$1,911 billion in 2016

64.0

Total expenditure

Interest payments 136.8

Compensation of employees 988.7

Goods and services expense 155.7

Subsidies and other transfers

Other

1,911.2

566.0

Revenue, excluding grants

Taxes on goods and services

878.5

200.3Social contributions

312.1

Taxes on income, profits, and capital gains

316.0

0.0Taxes on international trade

Other taxes 50.1

21

General government gross debt1 in % of GDP

Public finances: debt

1: See glossary for definitions 2: Statista estimate Note: Regional averages based on countries included in Statista Country Reports Source: International Monetary Fund, World Economic Outlook Database 2018, Statista 2018

Debt-to-GDP ratio in United Kingdom expected to decrease over the observed time period

20162012 20152010

54.9%

2014

87.4%

2011

54.5%

86.5%

2013

85.9% 80.8%

2017 2018 2019 2020 2021

46.0%

2022 2023

63.7%

57.1%

75.2%

49.7% 52.7%

84.1% 85.2% 87.0%

59.0% 59.6%

87.9%

59.8%

50.3%

2009

87.5%

57.9% 57.2%

87.2%87.9%

52.9%

85.1%

51.5%

84.0%

55.8%

Europe & Central AsiaUnited Kingdom

International Monetary Fund estimate

22

Total labor force1 in thousand

Labor force: development

1: See glossary for definitions Source: ILO Labour force by sex and age ILO modelled estimates 2018

Total labor force to grow from 2018 to 34.7 million by 2023 compared to 2016

17,267

33,350

15,719

2010

17,429

2008

14,519

33,546

15,135

17,326

2009

16,184

2011

17,502 18,441

17,689

2012

18,15517,795

15,320

33,793

2013

17,875

15,475

20172014

16,012

2019

17,965

32,287

15,581 16,128

18,498

2015

18,074

202220182016

34,252

18,233

15,797

33,952

15,871

18,309

15,943

18,384

34,104

14,858 16,071

2021

18,555

2023

32,824

14,727 14,972

2020

32,053 32,474 33,115

34,396 34,512 34,626 34,739

31,786 +9.3%

Female Male

International Labour Organization estimate

23

Employment in % of total labor force

Labor force: employment

Educational attainment of population over 15 in 2020

1: Generally prepares students for a direct entry into working life or for upper secondary education 2: Corresponds to the final stage of secondary education and prepares the students for a working life or tertiary education 3: Includes programs that serve to broaden the knowledge of students who have already gained an upper secondary education Source: ILO Employment by sector 2018, Wittgenstein Centre for Demography and Global Human Capital 2018

In 2020, most employees work in the services sector and have a lower secondary education

60

0

10

50

40

20

30

70

90

80

100

110

2 0

1 8

2 0

1 2

2 0

0 8

2 0

1 6

2 0

2 2

2 0

0 7

2 0

0 9

2 0

1 0

2 0

1 1

2 0

1 3

2 0

1 4

2 0

1 5

2 0

1 7

2 0

1 9

2 0

2 0

2 0

2 1

AgricultureServices Industry

13.0%

19.0%

28.9%

38.4%

Upper secondary20.0%

Incomplete primary

0.7%

No education

Primary

Post secondary3

Lower secondary1

24

Unemployment1 in % of total population

Labor force: unemployment

Unemployment1 in % of total population

1: See glossary for definitions Source: World Bank World Development Indicators 2018

Unemployment rate was 4.3% in 2017 and has been decreasing since 2010

7.9% 7.5%

4.8% 4.3%

9.0% 8.8% 9.0% 9.2%

8.9% 8.6%

8.1% 7.5%

20162011 2012 2013 2014 2015

7.8%

8.0%

6.1%

5.3%

Europe & Central AsiaUnited Kingdom

5.5% 4.9%

4.4%

5.1% 4.7%

4.2%

20162015 2017

Male Female

2010 2017

25

Business environment: administrative framework

1: Number of calendar days needed to complete the procedures to legally operate a business 2: Number of years from the filing for insolvency in court until the resolution of distressed assets 3: Time necessary to comply with all the procedures required to export/import goods in calendar days 4: Includes e.g. speed, simplicity, and predictability of customs clearance (5 = high efficiency, 1 = low efficiency) Source: World Bank World Development Indicators 2018

It takes 4.5 days to start a business in the United Kingdom compared to 5.6 days in the U.S.

Delivery

Time needed to resolve insolvency2

1.0 years

1.0 years

Time needed to start a business1

4.5 days

5.6 days

Time needed to register property

21.5 days

15.2 days

Time needed to fulfill tax requirements

110 hours

175 hours

Efficiency of customs clearance4

3.9

3.7

Time needed to import3

6 days

5.4 days

Time needed to export3

8 days

6 days

United Kingdom

The U.S.

United Kingdom

The U.S.

Business administration

26

Business environment: Made-In-Country Index (1/2)

Product attributes

The United Kingdom takes fourth place in the Made- In-Country Index

0%

20%

40%

60% High quality

High security

standards

Very good

value for

money

Uniqueness

Excellent

design

Advanced

technology

Authenticity

Sustainability

Fair

production

Status symbol

Score – United Kingdom Average Max Rank Country Index

1. Germany 100

2. Switzerland 98

3. the EU 92

4. the UK 91

5. Sweden 90

6. Canada 85

7. Italy 84

8. Japan 81

8. France 81

8. the U.S. 81

Note: The Made-In-Country Index is an index for the reputation of products from various countries all over the world Source: Statista Made-In-Country Index 2017

Reading support: The United Kingdom ranks 4th with a Made-In-Country Index score of 91

Reading support: This chart shows respondents’ answers to the following question: “Which attributes do you associate with products from …?‘. For example, 34% of respondents associate “high quality” with products from the UK

Made-In-Country Index 2017

27

Business environment: Made-In-Country Index (2/2)

Summary

▪ An index score of 91 for “Made in the UK“ leaves UK products only one point short on “Made in the EU” in the global ranking

▪ British products rank first, second or third in 12 other countries, two-thirds of which are not European

▪ Scores are especially high in the categories “high quality”, “status symbol”, and “advanced technology”

The Swiss and the British value “Made in the UK” most

Reading support: The United Kingdom scores highest in Switzerland and the UK itself (rank: 1 in each country). It ranks third in Mexico and lowest in Ukraine (rank: 28)

Country Rank

Switzerland 1

the UK 1

Bahrain 2

Canada 2

Greece 2

Kenya 2

Malaysia 2

Portugal 2

Denmark 3

Mexico 3

Note: The Made-In-Country Index is an index for the reputation of products from various countries all over the world Source: Statista Made-In-Country Index 2017

Top 10: “Made in UK” is strongest in these countries

Percentile rankings in Global Competitiveness 4.0 Index in 2018

28

Business environment: competitiveness

1: Information and communications technology Source: World Economic Forum The Global Competitiveness Index 4.0 2018

The United Kingdom takes 8th place in competitiveness

0%-20% 21%-40% 41%-60% 61%-80% 81%-100%

▪ United Kingdom ranked 8th out of 140 countries in national competitiveness

▪ Percentile rank indicates the country’s place in the ranking, with 0 corresponding to lowest rank, and 100 to highest rank

▪ The Global Competitiveness Index 4.0 includes 98 indicators of infrastructure, ICT1

adoption, macroeconomic stability, efficiency enhancers and innovation factors that determine the level of competitiveness of a country

▪ Competitiveness is a set of institutions, policies, and factors that determine the level of productivity of an economy

▪ Highly competitive economies are more productive and have higher chances of long-term prosperity than less competitive economies

29

New businesses registered per 1,000 inhabitants1

Business environment: business formation

Ease of doing business score² in 2018

1: Number of new limited liability corporations registered in the calendar year per 1,000 people between 15-64 years 2: 0 = lowest performance, 100 = best performance Note: Regional averages for new businesses based on available data for countries covered by Statista Country Reports Source: World Bank Enterprise Surveys 2018, World Bank Doing Business 2018

The United Kingdom experiences a growth in the emergence of new businesses

11.9

14.1

15.7

4.9 5.2 5.4

20142012 2016

United Kingdom Europe & Central Asia

94.6 90.0

68.7 65.7 75.0

68.7

United Kingdom Europe & Central Asia

Starting a business Enforcing contracts Getting credit

2

BP registered the largest revenue

30

Business environment: top companies

Total revenue in million US$1 in 2018 Listing ID2CompanyRank

3

4

5

6

7

No. of employees in 2018

1: Current US$, see glossary for differences between current and constant US$ 2: Listing IDs refer to different stock exchanges 3: Values for 2019 Source: Statista Top Companies 2019

166,825

122,710

61,770

47,758

28,522

24,429

23,031

22,627

18,630

18,302

8

1

9

10

Rio Tinto

BP

Unilever plc

Tesco3

Glencore PLC

Vodafone3

Fiat Chrysler Automobiles

GlaxoSmithKline

Prudential PLC

British American Tobacco 56,710

73,000

158,000

154,848

198,545

95,490

450,000

47,500

92,005

23,792

GSK

TSCO

BP

GLEN

FCAU

RIO

ULVR

VOD

PRU

BATS

TRADE & INVESTMENT

31

▪ Merchandise trade

▪ Commercial services

▪ Investments

The United Kingdom registered a lower export trade flow than Germany in 2017

32

1: See glossary for definitions Note: Regional average value refers to the 150 countries covered by the Statista Country Reports Source: WTO International Trade by Commodity and Commercial Services 2018

Merchandise trade: global comparison (1/2)

Export trade flows of total merchandise1 Import trade flows of total merchandise1

95

100

105

110

115

120

125

130

135

2012 201720112010 2013 2014 20162015

United Kingdom GermanyEurope & Central Asia United States

2010 = 100%

95

100

105

110

115

120

125

130

135

2010 20132011 20162012 20152014 2017

2010 = 100%

33

Shares in merchandise trade export value in 2017

Merchandise trade: global comparison (2/2)

Shares in merchandise trade import value in 2017

Note: Regional average value refers to the 150 countries covered by the Statista Country Reports. Tajikistan, Turkmenistan and Uzbekistan excluded from the regional average due to unavailability of data Source: WTO International Trade by Commodity and Commercial Services 2018

The share of manufacturers in merchandise export in the United Kingdom is lower than in Germany in 2017

12%

73%

Manufacturers Agricultural products

74%

Fuels & Mining

75%

87%

12%

5%

12%

7% 11%

7% 11%

United Kingdom GermanyEurope & Central Asia United States

Agricultural productsManufacturers

72%71%

Fuels & Mining

76% 78%

11% 13% 12% 11% 11% 10%11%

7%

With US329.6 billion, manufacturers accounted for 75% of the total merchandise export value in 2017

34

1: Current US$, see glossary for differences between current and constant US$ 2: CAGR: Compound Annual Growth Rate / average growth rate per year Source: WTO International Trade by Commodity and Commercial Services 2018

Merchandise trade: trade flows

Merchandise export trade flows in billion US$1 Merchandise import trade flows in billion US$1

301.8 341.2 338.2 339.6 351.1 332.4 315.6 329.6

88.4 84.6 80.2 73.2 48.8

39.8

34.3

86.6

2016

33.8 16.2

16.7 34.5

2015

29.0

2012

42.6

2011 2013

35.9

2014

31.9 22.7 31.0

27.2

44.5

32.2

68.5

46.5

52.0

+0.8%²

Agricultural productsManufacturers Fuels & Mining Other

408.7 441.6 438.1 446.3

483.0 460.3 448.1 460.0

84.2

117.2 123.4 117.5 101.0

66.6 54.2

69.5

68.7 68.6 71.9 75.8

70.4 66.8

69.7

65.0

67.6 44.9

49.3

37.0

30.1

61.1

20132012

24.4

2011 2014

29.0

2015 2016

+1.2%²

2010 201720102017

The United Kingdom registered a lower export trade flow than Germany in 2017

35

1: See glossary for definitions Note: Regional average value refers to the 150 countries covered by the Statista Country Reports. Turkmenistan excluded from the regional average due to unavailability of data Source: WTO International Trade by Commodity and Commercial Services 2018

Commercial services: global comparison (1/2)

Export trade flows of total commercial services1 Import trade flows of total commercial services1

100

105

110

115

120

125

130

135

140

145

2010 2012 20132011 2014 20162015 2017

United Kingdom Europe & Central Asia Germany United States

2010 = 100%

100

105

110

115

120

125

130

135

140

145

201620112010 2012 2013 2014 2015 2017

2010 = 100%

36

Shares in commercial services export value in 2017

Commercial services: global comparison (2/2)

Shares in commercial services import value in 2017

Note: Regional average value refers to the 150 countries covered by the Statista Country Reports. Turkmenistan and Uzbekistan excluded from the regional average due to unavailability of data Source: WTO International Trade by Commodity and Commercial Services 2018

The share of travel in services export is lower in the United Kingdom than in Germany in 2017

Goods-related services

2%

Transport Travel

27%

3%4%

11%

5%

11%

18%

21%

13%

19%

13%

United Kingdom Europe & Central Asia Germany United States

14%

Goods-related services Transport

2%

5%

1%

Travel

3%

26%

16%

21% 20%

30%

20%

26%

With US$43.8 billion, travel services accounted for 13% of total services export in 2017

37

1: Current US$, see glossary for differences between current and constant US$ 2: CAGR: Compound Annual Growth Rate / average growth rate per year Source: WTO International Trade by Commodity and Commercial Services 2018

Commercial services: trade flows

34.9 38.5 40.1 44.6 50.0 45.5 41.5 43.8

29.2 33.9 36.3 36.4

40.3 39.1 35.0 37.8

202.7 228.3 233.7

249.2 263.5

253.9 246.0

260.3

2013

1.4

2012

1.0 1.2

6.1

2011

6.56.8

2014 2015

5.4

2016

5.5

+3.8%²

TransportTravel OtherGoods-related services

55.2 55.9 56.3 57.8 67.4 66.6 64.8 63.4

29.7 28.4 30.0 29.2 30.3 33.1 29.8 30.1

92.8 102.8 102.1 112.5

116.0 111.0 105.7 114.6

2011 2013

1.7

0.2

2012

1.9

2014

2.3

2015

2.0

2016

1.8 0.3 0.4

+2.4%²

2010 201720102017

Commercial services export trade flows in billion US$1 Commercial services import trade flows in billion US$1

38

Top global inward FDI1 flows in billion US$2 in 2017

Investments: global comparison (1/2)

1: Foreign direct investment, see glossary for definition 2: Current US$, see glossary for differences between current and constant US$ 3: United Arab Emirates Note: Regions only include the 150 countries covered by the Statista Country Reports Source: UNCTAD Foreign Direct Investment Inward and Outward flows and stock 2018

With US$275.4 billion, the United States registered the highest inward FDI flow in 2017

275.4 24.2

58.0 49.8

41.0 34.7

136.3 104.3

62.0 46.4

39.9 2.8 2.2

62.7 29.7

14.5 19.0

10.4 7.4

3.6 3.5 3.3

United States Canada

Netherlands

Singapore

Egypt

France

India Australia

Switzerland Germany

China (Mainland) Hong Kong (SAR)

Pakistan Bangladesh

Brazil Mexico

Colombia Israel UAE3

Ethiopia Nigeria Ghana

North America

Europe & Central Asia

East Asia & Pacific

South Asia

Middle East & North Africa

Latin America & Caribbean

Sub-Saharan Africa

39

Top global outward FDI1 flows in billion US$2 in 2017

Investments: global comparison (2/2)

1: Foreign direct investment, see glossary for definition 2: Current US$, see glossary for differences between current and constant US$ 3: United Arab Emirates Note: Regions only include the 150 countries covered by the Statista Country Reports Source: UNCTAD Foreign Direct Investment Inward and Outward flows and stock 2018

The United States also had the highest outward FDI sum in 2017, with US$342.3 billion

342.3 77.0

99.6 82.3

58.1 41.2

160.4 124.6

82.8 31.7

11.3 0.2

5.1 5.1 3.7

14.0 8.1 6.3 7.4

1.6 1.3

Japan

France

United States Canada

Luxembourg

South Korea

China (Mainland)

Germany United Kingdom

Hong Kong (SAR)

India Bangladesh

Pakistan Chile

Mexico Colombia

UAE3

Kuwait Israel

South Africa Angola Nigeria

0.1

North America

Europe & Central Asia

South Asia

Middle East & North Africa

Latin America & Caribbean

Sub-Saharan Africa

East Asia & Pacific

40

FDI1 inward and outward flows in billion US$2

Investments: development

1: Foreign direct investment, see glossary for definition 2: Current US$, see glossary for differences between current and constant US$ Note: FDI flows with a negative sign indicate that at least one of the three components of FDI (equity capital, reinvested earnings or intra-company loans) is negative and not offset by positive amounts of the remaining components. These are instances of reverse investment or disinvestment. Source: UNCTAD Foreign Direct Investment Inward and Outward flows and stock 2018

Inward FDI amounted to $15.09 billion in 2017

58.20 42.20

55.45 51.68

24.69

196.13

95.59

20.70

-83.49

99.61

40.49 48.09

32.72

-151.29

-22.52

15.09

Inward flows Outward flows

2010 2017201620152014201320122011

FITCH SOLUTIONS RISK INDICES

41

▪ Methodology

▪ Development

▪ High and low performer

▪ Global and regional comparison

42

The risk/reward indices by Fitch Solutions are a comparative regional ranking system that classifies different markets by the ease of doing business there and operational risks and limitations that potential investors face. The operational risk index uses quantitative measures to compare the challenges of operating in 201 countries worldwide. The index attributes scores between 0-100 to each country, with 100 being the lowest risk.

The index focuses on four main risk areas:

▪ Labor market: evaluation of the risks surrounding the size, education levels and costs of employing workers in a country

▪ Logistics: evaluation of the quality and extent of the transport infrastructure, the ease of trading, and the quality and availability of utilities

▪ Trade & investment: evaluation of the openness of an economy, the level of government intervention and the quality and efficacy of the legal environment

▪ Crime & security: evaluation of operating conditions with respect to interstate conflict risk, terrorism, crime, including cybercrime and organized crime

Methodology

Note: THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings' credit ratings. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings' analysts do not share data or information with Fitch Solutions Macro Research.

Operational risk breakdown

Operation risk index

(100%)

Labor market

(25%)

Logistics

(25%)

Trade & investment

(25%)

Crime & security

(25%)

Education Transport network Economic

openness Conflict risk

Availability of labor Trade procedures

and governance Legal

Vulnerability

to crime

Labor costs Market size

and utilities

Government

intervention Business crime

43

Development of overall operational risk index1

Development

Development of subindices1

Note: THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings' credit ratings. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings' analysts do not share data or information with Fitch Solutions Macro Research. 1: Scale of 0-100, with 100 being the lowest risk Source: Fitch Solutions

Overall index score increased in 2019, which means that the operational risk for the UK decreased

Crime & security

Labor market Trade & investment

Logistics

2016 2017 2018 2019

77.1 75.1

77.5 77.7

2016 2017 2018 2019

81.8

76.6 78.1

70.8

76.0 77.3

77.2

71.4

77.9

72.1

78.4 81.3

72.1

78.5

78.8

81.3

44

Comparison of country and territory scores to highest and lowest scores1 in the region and worldwide in 2019

High and low performer

Note: THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings' credit ratings. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings' analysts do not share data or information with Fitch Solutions Macro Research. 1: Scale of 0-100, with 100 being the lowest risk Source: Fitch Solutions

In the “labor market” area, the United Kingdom is 4.4 points behind the regional high performer

Global high/low

Labor market Logistics Trade & investment Crime & security

Regional high/low

Switzerland

Turkmenistan

76.5

33.8

72.1United Kingdom

Netherlands

Uzbekistan

88.6

34.7

United Kingdom 78.5

78.8United Kingdom

Tajikistan 38.9

United Kingdom 78.8

92.3

Ukraine

Norway

30.5

United Kingdom 81.3

25.4

United States

Sierra Leone

79.0 Netherlands

South Sudan

88.6

16.9

Hong Kong (SAR)

18.9Chad

88.7 92.3Norway

South Sudan 4.5

45

Operational risk index1 in 2019 and change compared to 2018

The United Kingdom had the 7th lowest operational risk in 2019 Global comparison

Note: THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings' credit ratings. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings' analysts do not share data or information with Fitch Solutions Macro Research. 1: Scale of 0-100, with 100 being the lowest risk 2: Democratic Republic of the Congo Source: Fitch Solutions

# Country/region Value Change

1 Singapore 82.8 →

2 Hong Kong (SAR) 81.7 →

3 Denmark 81.0 →

4 Switzerland 80.2 →

5 Netherlands 79.9 →

6 Sweden 79.2 →

7 United Kingdom 77.7 →

8 New Zealand 77.5 →

9 Canada 77.4 ↑

10 Norway 77.0 →

11 United States 76.9 →

12 Finland 75.4 →

13 Austria 74.8 →

14 Luxembourg 74.7 →

15 Ireland 74.3 →

16 Japan 74.2 →

17 Germany 73.8 →

18 Australia 73.2 →

19 Spain 72.5 →

19 France 72.5 →

21 South Korea 72.0 ↑

22 Belgium 71.6 ↓

23 Estonia 71.1 →

24 UAE 71.0 →

25 Czechia 70.9 →

25 Iceland 70.9 →

27 Portugal 70.8 →

28 Poland 69.6 →

29 Slovenia 68.6 ↑

30 Lithuania 68.4 →

# Country/region Value Change

31 Malaysia 67.9 →

32 Latvia 65.8 →

33 Malta 65.6 →

34 Italy 64.7 ↑

35 Qatar 64.6 →

36 Israel 64.4 →

37 Chile 64.3 →

38 Croatia 64.1 →

39 Hungary 64.0 →

40 Slovakia 63.3 →

41 Bahrain 63.2 →

42 Oman 62.8 →

43 Romania 62.4 →

44 Cyprus 62.3 ↑

44 Brunei Darussalam 62.3 ↑

46 Georgia 61.9 →

47 Saudi Arabia 61.7 →

48 Bulgaria 60.2 →

49 Thailand 59.4 ↑

50 Azerbaijan 58.8 ↑

51 Greece 58.6 →

51 Jordan 58.6 →

53 Kazakhstan 58.5 ↑

54 China (Mainland) 58.1 ↑

55 Serbia 57.2 →

56 Belarus 57.1 →

57 Montenegro 56.7 →

58 Russia 56.5 ↑

59 Macedonia 56.2 ↓

60 Armenia 55.5 →

# Country/region Value Change

61 Kuwait 55.1 →

62 Turkey 54.8 ↑

63 Uruguay 54.3 →

64 Vietnam 54.0 →

65 Panama 53.9 ↓

66 Costa Rica 53.2 →

67 Morocco 52.6 →

68 Indonesia 52.5 →

69 Mongolia 51.7 →

70 Mexico 51.3 →

71 South Africa 51.2 →

71 Albania 51.2 →

73 India 50.7 ↑

74 Bhutan 50.6 ↓

74 Botswana 50.6 →

76 Rwanda 49.6 ↓

77 Peru 48.8 →

78 Colombia 48.4 ↓

79 Argentina 47.8 ↑

79 Tunisia 47.8 →

81 Brazil 47.4 ↑

82 Jamaica 47.2 →

82 Namibia 47.2 ↓

84 Moldova 46.6 →

84 Bosnia and Herzeg. 46.6 ↑

86 Ukraine 46.5 ↑

87 Ecuador 45.8 →

87 Ghana 45.8 ↓

89 Egypt 45.2 →

90 Dominican Republic 44.4 →

# Country/region Value Change

91 Suriname 44.1 ↑

92 Philippines 44.0 ↑

93 Lebanon 43.9 →

94 Belize 42.7 →

94 Iran 42.7 →

96 Uzbekistan 42.3 ↑

96 Tajikistan 42.3 ↓

96 Kyrgyzstan 42.3 →

99 Cambodia 41.9 ↓

99 Cuba 41.9 →

101 Kenya 41.7 →

102 El Salvador 41.5 →

103 Algeria 41.0 →

104 Paraguay 39.7 →

105 Zambia 39.5 →

106 Nicaragua 39.1 →

107 Bangladesh 38.4 →

108 Guatemala 38.1 →

108 Turkmenistan 38.1 →

110 Gambia 37.6 →

111 Nepal 37.5 ↓

111 Ivory Coast 37.5 →

113 Laos 37.4 ↓

114 Honduras 37.3 →

115 Guyana 36.7 ↓

116 Tanzania 36.3 ↓

117 Nigeria 36.2 →

118 Senegal 36.0 ↓

118 Malawi 36.0 →

120 Uganda 35.8 →

# Country/region Value Change

121 Bolivia 35.3 →

122 Djibouti 35.2 →

123 Ethiopia 35.0 →

124 Pakistan 34.9 →

125 Burkina Faso 34.3 →

126 Mozambique 33.8 →

127 Myanmar 33.1 ↑

128 Zimbabwe 32.3 →

129 Gabon 32.1 ↓

129 North Korea 32.1 ↓

131 Angola 31.1 →

132 Venezuela 30.8 ↑

133 Iraq 30.1 →

133 Timor-Leste 30.1 →

135 Cameroon 29.6 ↓

136 Rep. of the Congo 29.3 ↓

137 Libya 29.2 →

138 Equatorial Guinea 27.8 ↓

139 Sierra Leone 27.5 ↓

140 Mali 27.4 ↓

141 Syria 27.1 →

142 Niger 26.6 →

143 Sudan 26.5 ↑

144 Haiti 25.0 →

145 Congo (Dem. Rep)2 24.5 →

145 Afghanistan 24.5 ↑

147 Yemen 23.7 →

148 Somalia 22.5 ↓

149 Chad 20.2 →

150 South Sudan 18.8 ↓

Operational risk index1 worldwide and in Europe & Central Asia in 2019

46

Regional comparison

In 2019, the United Kingdom ranks #7 in the Fitch operational index score out of 150 countries and territories covered by the Country Reports.

With an index score of 77.7, the operational risk in the United Kingdom is relatively low

Note: THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings' credit ratings. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings' analysts do not share data or information with Fitch Solutions Macro Research. 1: Scale of 0-100, with 100 being the lowest risk Source: Fitch Solutions

0-25 26-50 51-75 76-100

It comes #5 when compared to the other 49 countries and territories in the region Europe & Central Asia.

SOCIETY

47

▪ Population

▪ Income

▪ Human Development Index

66,574 68,405

70,003 71,386 72,641 73,838

74,967 75,941 76,708

20382018 2023 20432028 20482033 2053 2058

+15.2%

48

Population projection1 in thousand

Population (1/4)

1: The medium fertility variant assumes that total fertility will eventually converge toward a level of 1.85 children per woman Source: United Nations, Department of Economic and Social Affairs, Population Division 2017

Population projected to reach 76.7 million by 2058

49

Population (2/4)

Source: United Nations, Department of Economic and Social Affairs, Population Division 2017

2.1%

1.6%

2.3%

2.5%

2.7%

3.2%

3.5%

3.3%

3.1%

3.3%

3.4%

3.4%

3.1%

2.8%

2.9%

3.1%

3.1%

Male

3.1%

1.8%

2.5%

2.7%

2.8%

3.3%

3.6%

3.4%

3.2%

3.3%

3.4%

3.3%

3.0%

2.7%

2.8%

3.0%

3.0%

Female

80+

75-79

70-74

65-69

60-64

55-59

50-54

45-49

40-44

35-39

30-34

25-29

20-24

15-19

10-14

5-9

0-4

Age group

Reading support:

Population distribution in 2018

Σ Σ

3.2% of the population is female and between the age of 40 and 44.

29.1%28.9%

58.1% of the population were between the age 20 and 64, more than half of them were women

50

Population growth, total population, and real GDP1 per capita in US$2 in selected European countries3 in 2018

Population (3/4)

1: See glossary for definitions 2: Constant US$, see glossary for definition of current and constant US$ 3: Countries with a GDP per capita lower than US$16,000 are excluded Source: United Nations, Department of Economic and Social Affairs, Population Division 2017, International Monetary Fund, World Economic Outlook Database 2018, Statista 2018

Population increased by 0.6%, which is above regional average, to a total of 66,573,504 in 2018

65 850 60105

1.5

1.0

0.5

0.0

15

-0.5

40 45

-1.0

Iceland

Estonia

France

Germany

Ireland

Lithuania

Norway

Poland Slovakia

Slovenia

Belgium

Spain

Malta

Sweden

United Kingdom

Latvia

Denmark

Austria

Greece

Netherlands

Finland

Cyprus

Total population in millions

Portugal

Switzerland Luxembourg

Czechia

Italy

Europe

Real GDP per capita: US$25,000Regional averagePopulation growth 2017-2018 in %

51

Total population in millions in 20181

Population (4/4)

1: Countries not included in the Statista Country Reports are omitted in this table 2: Democratic Republic of the Congo Source: United Nations, Department of Economic and Social Affairs, Population Division 2017

The United Kingdom had the 21st highest total population in the world in 2018

# Country/region Population

31 Argentina 44.7

32 Uganda 44.3

33 Ukraine 44.0

34 Algeria 42.0

35 Sudan 41.5

36 Iraq 39.3

37 Poland 38.1

38 Canada 37.0

39 Afghanistan 36.4

40 Morocco 36.2

41 Saudi Arabia 33.6

42 Peru 32.6

43 Venezuela 32.4

44 Uzbekistan 32.4

45 Malaysia 32.0

46 Angola 30.8

47 Mozambique 30.5

48 Nepal 29.6

49 Ghana 29.5

50 Yemen 28.9

52 North Korea 25.6

53 Ivory Coast 24.9

54 Australia 24.8

55 Cameroon 24.7

57 Niger 22.3

59 Burkina Faso 19.8

60 Romania 19.6

61 Malawi 19.2

62 Mali 19.1

63 Kazakhstan 18.4

# Country/region Population

64 Syria 18.3

65 Chile 18.2

66 Zambia 17.6

67 Guatemala 17.2

68 Netherlands 17.1

69 Zimbabwe 16.9

70 Ecuador 16.9

71 Senegal 16.3

72 Cambodia 16.2

73 Chad 15.4

74 Somalia 15.2

76 South Sudan 12.9

77 Rwanda 12.5

78 Tunisia 11.7

79 Belgium 11.5

80 Cuba 11.5

83 Bolivia 11.2

84 Greece 11.1

85 Haiti 11.1

86 Dominican Republic 10.9

87 Czechia 10.6

88 Portugal 10.3

89 Sweden 10.0

90 Azerbaijan 9.9

91 Jordan 9.9

92 Hungary 9.7

93 United Arab Emirates 9.5

94 Belarus 9.5

95 Honduras 9.4

96 Tajikistan 9.1

# Country/region Population

97 Serbia 8.8

98 Austria 8.8

99 Switzerland 8.5

100 Israel 8.5

103 Sierra Leone 7.7

104 Hong Kong (SAR) 7.4

105 Bulgaria 7.0

106 Laos 7.0

107 Paraguay 6.9

108 Libya 6.5

109 El Salvador 6.4

110 Nicaragua 6.3

111 Kyrgyzstan 6.1

112 Lebanon 6.1

113 Turkmenistan 5.9

114 Singapore 5.8

115 Denmark 5.8

116 Finland 5.5

117 Slovakia 5.4

118 Republic of the Congo 5.4

119 Norway 5.4

122 Costa Rica 5.0

124 Oman 4.8

125 Ireland 4.8

126 New Zealand 4.7

129 Kuwait 4.2

130 Croatia 4.2

131 Panama 4.2

132 Moldova 4.0

133 Georgia 3.9

# Country/region Population

1 China (Mainland) 1,415.0

2 India 1,354.1

3 United States 326.8

4 Indonesia 266.8

5 Brazil 210.9

6 Pakistan 200.8

7 Nigeria 195.9

8 Bangladesh 166.4

9 Russia 144.0

10 Mexico 130.8

11 Japan 127.2

12 Ethiopia 107.5

13 Philippines 106.5

14 Egypt 99.4

15 Vietnam 96.5

16 Congo (Dem Rep.)2 84.0

17 Germany 82.3

18 Iran 82.0

19 Turkey 81.9

20 Thailand 69.2

21 United Kingdom 66.6

22 France 65.2

23 Italy 59.3

24 Tanzania 59.1

25 South Africa 57.4

26 Myanmar 53.9

27 South Korea 51.2

28 Kenya 51.0

29 Colombia 49.5

30 Spain 46.4

# Country/region Population

135 Bosnia and Herzeg. 3.5

136 Uruguay 3.5

137 Mongolia 3.1

138 Albania 2.9

139 Armenia 2.9

140 Jamaica 2.9

141 Lithuania 2.9

142 Qatar 2.7

143 Namibia 2.6

144 Botswana 2.3

146 Gambia 2.2

147 Macedonia 2.1

148 Slovenia 2.1

149 Gabon 2.1

150 Latvia 1.9

152 Bahrain 1.6

155 Timor-Leste 1.3

156 Equatorial Guinea 1.3

157 Estonia 1.3

159 Cyprus 1.2

160 Djibouti 1.0

164 Bhutan 0.8

165 Guyana 0.8

167 Montenegro 0.6

169 Luxembourg 0.6

170 Suriname 0.6

175 Brunei Darussalam 0.4

176 Malta 0.4

179 Belize 0.4

180 Iceland 0.3

7.5%

23.0%

16.8%

12.2%

40.6%

IncomeDistribution

Third 20% Highest 20%Second 20%Lowest 20% Fourth 20%

2.9% 2.9% 3.1% 2.9% 2.9% 2.9%

26.7% 25.3%

24.6% 25.3%

26.1% 25.4%

201420112010 20152012 2013

52

Income shares of lowest and highest income levels

Income (1/2)

Distribution of income in

Source: World Bank World Development Indicators 2018

In 2015, the highest 20% held 40.6% of the income while the lowest 20% only held 7.5%

2015

Highest 10%Lowest 10%

53

Disposable income growth, disp. income1 per capita in US$2 and population in selected European countries3 in 2016

Income (2/2)

1: See glossary for definitions 2: Current US$, see glossary for definition of current and constant US$ 3: Countries with a GDP per capita lower than US$16,000 are excluded Source: United Nations, Department of Economic and Social Affairs, Population Division 2017, United Nations Statistics Division 2018, International Monetary Fund, World Economic Outlook Database 2018, Statista 2018

Income growth at 3.8% was faster and income per capita at US$38,977 was higher than average

5,000

-1

75,000

3

0

10

2

5

0

10,000 15,000 20,000 25,000 30,000 35,000 40,000

-2

45,000 55,000 70,00050,000

1

80,000

4

Finland France

United Kingdom

Germany

Greece Switzerland

Ireland

Poland

Latvia

Cyprus

Lithuania

Netherlands

Norway

Italy

Denmark

Slovakia

Estonia

Spain

Sweden

Disposable income per capita in US$

Slovenia

Austria

Czechia Belgium

Europe

Luxembourg

Portugal

Regional averageDisposable income growth 2015-2016 in % Population: 25 million

54

Human Development Index in 2017

Human Development Index

▪ With 92.2%, United Kingdom ranks #14 in comparison of 189 countries.

▪ The Human Development Index was created to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone

▪ The index is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and having a decent standard of living

Source: United Nations Development Programme Human Development Report 2018

In global comparison, the United Kingdom has a very high level of human development

0%-54% 55%-69% 70%-79% 80%-100%

RETAIL & CONSUMPTION

55

▪ Consumption

▪ Consumer behavior

▪ eCommerce

▪ FinTech

56

Development stages of retail markets

Retail structure (1/4)

Note: Please refer to the appendix for further information on the methodology 1: See glossary for definitions Source: Statista 2019

The retail market in the United Kingdom is well- developed

▪ Global grocery chains are not present

▪ National store ownership characterized by handcart or independent stores

▪ Traditional1 payment methods are primarily used

Opening Maturing Well-developed

▪ Global grocery chains start operations in large cities1

▪ Store ownership is characterized by independent stores, national or international chains

▪ Traditional and electronic payment methods1

are commonly used

▪ Global chains operate in large cities, medium- sized cities and rural areas1

▪ Store ownership is characterized by independent stores and national or international chains

▪ Traditional, electronic and mobile payment methods1 are commonly used

International grocery chains Store location

large cities1

rural area, medium-sized and large cities1

rural area, medium-sized and large cities1

57

Presence of international grocery chains

Retail structure (2/4)

1: See glossary for definitions Note: Grocery chains are sorted by number of operated stores internationally, information based on Statista Fact Check Source: World List Mania 2018, Statista 2019

In the United Kingdom, global chains are represented in rural areas and medium-sized and large cities

International grocery chains Store location

rural area, medium-sized and large cities1

58

Retail structure (3/4)

1: See glossary for definitions; 2: Pearl Superstore Note: Information based on Statista Fact Check Source: Statista 2019

Characteristics of the grocery market in the United Kingdom

XXX Existence of grocery store types1

XXXX Store ownership

XXXX Payment methods

Hypermarkets Convenience Discounter Handcart

International chains National chains Independent stores2

Cash Cheques Debit card Credit card Smartphone Other

 

   

 

59 Note: Information based on Statista Fact Check Source: Statista 2019

The grocery structure in the UK is characterized by hypermarkets, convenience stores, discounters and handcarts.

People are more inclined to buy groceries in supermarkets such as Tesco, Asda, Lidl etc. One reason for buying groceries from supermarkets is the availability and variation of product types under one roof, and they can also buy other non-food items such as electronics, home, stationery, etc., from that same place and save the time and energy cost of travelling. People tend to do their grocery shopping on the weekends.

Insights into a national typic grocery structure

Insights into the grocery structure and shopping behavior in the United Kingdom Retail structure (4/4)

60

Household consumption in 2017

Consumption

1: Also includes furnishing and household equipment expenses 2: Miscellaneous goods and services 3: Current US$, see appendix for differences between current and constant US$ Note: Regions only include the 150 countries covered by the Statista Country Reports Source: United Nations Statistics Division 2019; United Nations Demographic Statistics Database 2019

Households in the United Kingdom spend their biggest share of their income on housing and utilities

2.5%

26.8%

Food and non-

alcoholic beverages

Housing and

utilities1

Alcoholic beverages,

tobacco and narcotics

TransportHealth

13.7%

2.0%

Clothing and

footwear

18.8%

House maintenance

Communi- cations

Recreation and culture

2.0%

Education Restaurants and hotels

Other2

8.2% 9.6%

6.4%

3.5% 5.6%

3.3% 5.0% 4.2%

1.9%

21.7%

13.2%

9.3% 6.7%

9.1%

1.7% 2.3%

9.6%

13.0%

Household consumption expenditure3

United Kingdom

US$1,636.27bn

in 2017

EuropeUnited Kingdom

61

Product and service ownership of consumers

Consumer behavior: product ownership

Banks are the most frequently used service in the United Kingdom

84.1% 80.4%

88.6%

65.0%

80.6%

74.9%

21.3%

52.5%

Electricity supplier InsuranceSmartphone Health insuranceMobile Internet or telephone

Landline internet or telephone

Bank Car

Note: “Which of these products and services do you own / use?”; Multi Pick; n=1,045 Source: Statista Global Consumer Survey, as at August 2018

62

Brand awareness

Consumer behavior: brands

Note: Top 3 brand awareness by category ; “In which of these categories do you pay particular attention to brands?”; Multi pick; n=1,045 Source: Statista Global Consumer Survey, as at August 2018

Consumers in the United Kingdom value technological brands the most

53.5%

35.3%

50.7%

36.1%

32.8%

15.8%

29.8%

37.0%

11.5%

18.4% 16.4%

8.7%

49.1%

38.5%

34.8%

24.2%

34.5%

39.7%

29.2%

24.7% 25.9%

28.8%

16.6%

12.2%

Food and non- alcoholic

drinks

VehiclesSmartphones Alcoholic drinks

Household appliances

TV and HiFiClothing and Shoes

Cosmetics and

bodycare

Bags and accessories

Detergents and

cleaning products

Furniture Toys and baby

products

Male Female

63

Digital expenditures1 as share of consumer spending per capita in 20192

Consumer behavior: digital expenditures

1: Including all revenues generated within the eCommerce, eTravel, eServices, Digital media and Connected car markets 2: Regions only include countries listed in the Digital Market Outlook Source: Statista Digital Market Outlook 2018

With US$93,082m and a share of 60%, eCommerce generates the highest digital revenues

EuropeAfrica & Middle East

2.8%

Asia

6.3%

Australia United Kingdom

South America

North America

10.7%

4.4% 5.8%

8.5%

2.4%

Total digital revenues1 in this country and breakdown in 2019

60.0% 29.1%

5.7% 4.3%

0.9%

eCommerce

eServices

Digital media

eTravel

Connected car US$155.1bn

▪ In Europe, the digital expenditures as a share of consumer spending per capita reach 5.8% in 2019

▪ In the United Kingdom, the revenue in the eCommerce market amounts to US$93,082.0m in 2019

▪ The eServices market generates revenues of US$8,912.4m in 2019

▪ In the eTravel market, 2019 revenues add up to US$45,095.3m

▪ The market for Connected cars produces a revenue of US$1,363.7m in 2019

▪ Revenue in the Digital media market amounts to US$6,691.4m in 2019

Highlights

64

eCommerce revenue growth, ARPU1 in US$ and penetration2 in selected European countries3 and regions in 2019

eCommerce: overview (1/2)

Compared to its region, eCommerce penetration is high and growth is below average

1: ARPU = average revenue per user 2: Share of active paying customers from the total population 3: Countries with a GDP per capita lower than US$16,000 are excluded 4: Countries with a GDP per capita higher than US$16,000 are excluded Source: Statista Digital Market Outlook 2019

80

14

90

8

2

85

28

95

4

0 30

24

50

12

55

18

60

26

65

0

6

16

10

70 75

Middle East & North Africa

Europe3

Slovakia

Denmark

Switzerland

Austria

eCommerce penetration in %

Belgium

Cyprus

Czechia

Estonia

Finland

France Spain

Netherlands

Sweden

Poland

United KingdomMalta

East Asia & Pacific

Portugal

Norway

Latin America & Caribbean

North America

Slovenia

South Asia Sub-Saharan Africa

Iceland World

Luxembourg

Lithuania

Latvia

Italy

Ireland

Greece Germany

Eastern Europe & Central Asia

eCommerce revenue growth 2018-2019 in % ARPU: US$250

4

Saturated

MatureEmerging

Delayed

Regional averages

XXX Payment methods

65

eCommerce in the United Kingdom

In the UK, many online stores are available. Many big retail shops are converting into eCommerce stores. It has become more convenient to people of all age to do their shopping from anywhere due to a busy and fast life. In order to save time, the number of people ordering groceries, appliances and other products online is constantly growing.

eCommerce: overview (2/2)

Insights into the eCommerce structure in the United Kingdom

Note: Information based on Statista Fact Check Source: Statista 2019

E-wallet credit cards

direct debits

bank transfer

invoice cash other

     

Delivery characteristics in this country

n.a.

Selected delivery providers in this country

▪ DHL

▪ DPD

▪ Hermes

▪ Royal Mail Service

Selected online shops in United Kingdom:

▪ Fashion: H&M, RiverIsland

▪ Electronics & Media: Amazon, Currys PC World

▪ Food & Personal Care: Tesco, Superdrug

▪ Furniture & Appliances: IKEA, Homebase

▪ Toys, Hobby & DIY: eBay, The Works

eCommerce revenues are expected to have a positive annual average growth of 5.1% up to 2023

66

1: CAGR: Compound Annual Growth Rate / average growth rate per year Note: Top 5 product categories purchased primarily online; “Which of these products do you mostly buy or order online?“; multi pick; n=1,045 Source: Statista Digital Market Outlook 2018, Statista Global Consumer Survey, as at August 2018

eCommerce: revenue projection

eCommerce revenues in million US$

11.0%

39.0%

29.0%

46.0%

30.0%

21.0%

55.0%

30.0% 27.0% 28.0%

ShoesClothingBags & accessories

Consumer electronics

Household appliances

Male Female

15,818 19,056

13,633 17,014

17,944

23,429

20,282

22,748

25,405

31,394

20232019

93,082

113,640+5.1%1

Products mostly bought online

Fashion Furniture & appliances

Electronics & media

Food & personal care

Toys, hobby & DIY

67

Top stores by net sales1 in million US$ in the United Kingdom in 2018

eCommerce: top stores

1: Amount of first party sales generated by a specific online store on domain-level after the deduction of returns, allowances for damaged or missing goods and any discounts allowed Source: ecommerceDB.com

The eCommerce market is dominated by amazon.co.uk with a market share of 7.6%

2,010.4

7%

amazon.co.uk

80%

22%14%5%4%55%

41%

3%

75%

5%

19% 3%

7%

5%

10%28%2%52%8%

10%

15%

6,561.6

4,001.9

3,005.3

2,632.3

tesco.com

argos.co.uk

johnlewis.com

next.co.uk

30%

Electronics & Media Toys, Hobby & DIYFashion Furniture & AppliancesFood & Personal Care

Market share

3.1%

7.6%

2.3%

4.6%

3.5%

4,252 4,002

2017 2018

-6%

80%

7% 3%

5%

5%

Electronics & Media

Food & Personal Care

Other

Furniture & Appliances

Fashion

Toys, Hobby & DIY

68 1: Own delivery service, Self-collection / Click & collect 2: prepaid store card Source: Annual report, store website, ecommerceDB.com

unknown

Shop software

Visa, Mastercard, American Express, more2

-

-

-

Giftcard Other:

 Cash:

 Invoice by:

 E-wallets:

 Cards:

Offered payment methods

 Other1

 Hermes

 DPD

 Royal Mail

Shipping: service provider United Kingdom

 eBay

 Amazon

Marketplaces:

 Phone

 Mail

 Bricks & mortar

Distribution: further channels

Category split: Net sales share in %

Net sales in the UK in mUS$

Main Country: United Kingdom Main Category: Food & Personal Care Company: Tesco Plc Launch: 2000

General information

eCommerce market: selected store profile (1/3)

tesco.com's net sales have decreased by -6% from 2017 to 2018

2,907 3,005

20182017

+3%

30%

7%

19%

41%

3%

Electronics & Media

Toys, Hobby & DIY

Food & Personal Care

Fashion

Furniture & Appliances

Other

69 1: Forwarding agent (not exactly named), Self-collection / Click & collect 2: prepaid store card Source: Store website, builtwith.com, ecommerceDB.com

IBM Websphere

Shop software

Visa, Mastercard, American Express, more2

PayPal

-

-

Giftcard, Love2Shop Other:

 Cash:

 Invoice by:

 E-wallets:

 Cards:

Offered payment methods

 Other1

 Hermes

 DPD

 Royal Mail

Shipping: service provider United Kingdom

 eBay

 Amazon

Marketplaces:

 Phone

 Mail

 Bricks & mortar

Distribution: further channels

Category split: Net sales share in %

Net sales in the UK in mUS$

Main Country: United Kingdom Main Category: Toys, Hobby & DIY Company: Argos, Ltd. Launch: -

General information

eCommerce market: selected store profile (2/3)

argos.co.uk's net sales grew by 3% from 2017 to 2018

6,426 6,555

2017 2018

+2%

55%

14%

5%

22%

4%

Electronics & Media

Fashion

Furniture & Appliances

Food & Personal Care

Toys, Hobby & DIY

Other

70 1: Arrow XL, CitySprint, collect+, DHL, Forwarding agent (not exactly named), UPS (United Parcel Service), XDP, Yodel Source: Annual report, store website, builtwith.com, ecommerceDB.com

Amazon Webstore

Shop software

Visa, Mastercard, American Express

Amazon Pay

-

-

Giftcard Other:

 Cash:

 Invoice by:

 E-wallets:

 Cards:

Offered payment methods

 Other1

 Hermes

 DPD

 Royal Mail

Shipping: service provider United Kingdom

 eBay

 Amazon

Marketplaces:

 Phone

 Mail

 Bricks & mortar

Distribution: further channels

Category split: Net sales share in %

Net sales in the UK in mUS$

Main Country: United Kingdom Main Category: Electronics & Media Company: Amazon.com, Inc. Launch: -

General information

eCommerce market: selected store profile (3/3)

amazon.co.uk's net sales grew by 2% from 2017 to 2018

The total FinTech transaction value is forecast to grow by 55.5% from 2019 to 2023

71 1: CAGR: Compound Annual Growth Rate/ average growth rate per year Source: Statista Digital Market Outlook 2018

Segment CAGR1 2019-2023

FinTech: transaction projection

FinTech transaction value in million US$

163,386

219,403

17,604

63,966

8074,240

4,788

2019

186,037

1,215

2023

289,372 +11.7%1

Digital payments

Personal finance

Alternative lending

Alternative financing

10.8%

3.1%

38.1%

7.6%

Highlights

▪ The transaction value in the FinTech market amounts to US$186,036.9m in 2019

▪ The transaction value is expected to show an annual growth (CAGR 2019-2023) of 11.7%, resulting in a volume of US$289,372.5m in 2023

▪ The largest segment is the digital payments segment with a volume of US$163,385.6m in 2019

▪ User penetration in digital payments is 79.7% in 2017 and is expected to hit 80.3% in 2023

▪ The average transaction value per user in digital payments amounts to US$3,073.85 in 2019

INFRA- STRUCTURE

72

▪ Digital

▪ Transport

73

Internet penetration1 in 2018

Digital infrastructure (1/2)

Mobile phone subscriptions1 per 100 inhabitants in 2018

Fixed broadband subscriptions1 per 100 inhabitants in 2018

1: See glossary for definitions Source: World Bank World Development Indicators 2018, Statista 2018

97.1% used the internet and there were 118.8 mobile cellular subscriptions per 100 people

97.1%

84.1% 79.4%

United Kingdom

United States Europe & Central Asia

119 124 125

United Kingdom

United States Europe & Central Asia

40

34

29

United StatesUnited Kingdom

Europe & Central Asia

74

Internet penetration1 in 2018

Digital infrastructure (2/2)

1: See glossary for definitions 2: Democratic Republic of the Congo Source: World Bank World Development Indicators 2018, Statista 2018

The United Kingdom had the 5th highest internet penetration in the world in 2018

# Country/region Penetration

31 Latvia 84.4%

32 Slovakia 84.2%

33 United States 84.1%

34 France 83.6%

35 Cyprus 82.6%

36 Slovenia 81.9%

37 Czechia 81.7%

38 Argentina 81.6%

39 Kuwait 81.2%

40 Russia 81.2%

41 Belarus 81.1%

42 Hungary 81.0%

43 Lithuania 80.6%

44 Croatia 80.4%

45 Poland 79.5%

46 Malaysia 79.2%

47 Oman 78.9%

48 Greece 78.6%

49 Portugal 78.5%

50 Malta 78.5%

51 Moldova 77.9%

52 Lebanon 77.3%

53 Serbia 77.0%

54 Armenia 76.7%

55 Costa Rica 74.9%

56 Kazakhstan 73.2%

57 Macedonia 72.7%

58 Dominican Republic 72.1%

59 Montenegro 71.1%

60 Bosnia and Herzegovina 71.1%

# Country/region Penetration

61 Djibouti 69.4%

62 Uruguay 68.0%

63 Jordan 67.9%

64 Bulgaria 66.5%

65 Turkey 66.3%

66 Iran 65.9%

67 Mexico 65.8%

68 Brazil 65.6%

69 Philippines 65.4%

70 Romania 65.2%

71 Albania 64.6%

72 Morocco 64.4%

73 Italy 63.9%

74 South Africa 63.8%

75 Colombia 63.7%

76 Venezuela 63.5%

77 Bhutan 62.8%

78 Paraguay 62.6%

79 Ecuador 60.2%

80 Georgia 59.4%

81 Thailand 58.8%

82 Botswana 58.3%

83 China (Mainland) 56.9%

84 Vietnam 56.7%

85 Belize 56.6%

86 Gabon 54.1%

87 Ukraine 53.9%

88 Uzbekistan 53.6%

89 Iraq 53.6%

90 Algeria 52.4%

# Country/region Penetration

91 Bolivia 51.0%

92 Tunisia 50.9%

93 Cuba 50.1%

94 Cambodia 50.0%

95 Panama 49.3%

96 Nigeria 47.1%

97 Indonesia 45.4%

98 Ivory Coast 45.3%

99 Peru 45.1%

100 Jamaica 44.8%

101 Egypt 43.6%

102 Suriname 43.5%

103 Guatemala 41.4%

104 Ghana 40.8%

105 Cameroon 37.8%

106 India 35.7%

107 Namibia 35.4%

108 Kyrgyzstan 34.2%

109 Guyana 33.3%

110 Honduras 32.1%

111 El Salvador 31.9%

112 Syria 31.9%

113 Myanmar 31.7%

114 Senegal 30.0%

115 Sudan 29.4%

116 Timor-Leste 28.0%

117 Zambia 27.3%

118 Equatorial Guinea 27.2%

119 Zimbabwe 26.1%

120 Nicaragua 25.9%

# Country/region Penetration

1 Norway 98.4%

2 Denmark 98.3%

3 Bahrain 98.1%

4 Qatar 97.9%

5 United Kingdom 97.1%

6 Sweden 96.7%

7 Netherlands 95.3%

8 Canada 94.7%

9 United Arab Emirates 94.7%

10 Luxembourg 94.7%

11 New Zealand 94.3%

12 South Korea 94.3%

13 Switzerland 94.2%

14 Iceland 94.0%

15 Germany 93.5%

16 Brunei Darussalam 92.6%

17 Japan 92.5%

18 Estonia 91.9%

19 Australia 91.5%

20 Finland 91.4%

21 Belgium 91.2%

22 Hong Kong (SAR) 90.0%

23 Chile 89.4%

24 Singapore 89.0%

25 Ireland 88.6%

26 Austria 88.4%

27 Spain 87.2%

28 Azerbaijan 85.4%

29 Israel 85.3%

30 Saudi Arabia 84.8%

# Country/region Penetration

121 Yemen 25.2%

122 Mongolia 23.8%

123 Laos 23.0%

124 Bangladesh 22.0%

125 Mozambique 21.5%

126 Tajikistan 21.2%

127 Rwanda 21.2%

128 Uganda 20.4%

129 Libya 19.6%

130 Turkmenistan 19.5%

131 Gambia 19.5%

132 Nepal 19.3%

133 Ethiopia 19.3%

134 Kenya 18.8%

135 Tanzania 16.5%

136 Pakistan 15.4%

137 Angola 15.1%

138 Burkina Faso 14.1%

139 Malawi 13.4%

140 Mali 13.3%

141 Sierra Leone 12.3%

142 Haiti 12.0%

143 Niger 11.7%

144 Afghanistan 10.6%

145 Republic of the Congo 8.8%

146 Congo (Dem Rep.)2 7.9%

147 South Sudan 7.8%

148 Chad 6.1%

149 Somalia 1.7%

75

Quality of trade and transport-related infrastructure1

Transport infrastructure

Freight transportation2

1: Logistics Performance Index (5 = high performance, 1 = low performance), see glossary for definition 2: Ton-kilometer = cargo weight transported times distance transported, TEU = Twenty-foot equivalent unit (standard-size container) 3: Container port traffic Source: World Bank World Development Indicators 2018

4.0 4.2 4.2

3.2 3.2 3.2

2012 2014 2016

United Kingdom Europe & Central Asia

10.5 million TEU in 2017

5,917.2 million ton-km in 2017

n.a.

3

Quality of trade and transport-related infrastructure was higher than the regional average

POLITICS

76

▪ Political profile

▪ Political environment

77

General information

▪ Citizens are considered to be free

▪ Form of government: democracy

▪ Freedom House score in 2018: 1 (1 = most free and 7 = least free)

▪ United Kingdom is characterized as an older democracy, a label that requires at least thirty five years of continuous experience of democracy and a Freedom House rating of 1 to 2.5 in the most recent estimate

▪ Chief of state: Queen ELIZABETH II (since 6 February 1952); Heir Apparent Prince CHARLES (son of the queen, born 14 November 1948)

▪ Head of government: Prime Minister Theresa MAY (Conservative) (since 13 July 2016)

Political profile

Latest election results: British House of Commons, 2017

Voter turnout: 69%

Source: Political Handbook of the World 2016-2017, CIA World Factbook, ElectionGuide, Freedom House

The United Kingdom is an older democracy

5.4%

40.3%

48.8%

1.8% 3.7%

Conservative Party

Labour Party Liberal Democrats

Scottish National Party other

78

Political environment: rule of law

▪ When it comes to the rule of law, the United Kingdom has ranked #16 in the comparison of the 214 countries and territories covered by the World Bank Worldwide Governance Indicators in 2017

▪ Percentile rank indicates the country's rank among all countries covered by the aggregate indicator, with 0 corresponding to the lowest, and 100 to the highest rank

▪ Rule of law refers to the influence and authority of law within society, particularly as a constraint upon behavior, including behavior of government officials

▪ This indicator captures perceptions of the extent to which the country's population has confidence in reliability of legal authorities and police and the likelihood of crime and violence to occur

▪ The rule of law also measures factors such as the time and cost for resolving a commercial dispute

Source: World Bank Worldwide Governance Indicators 2018

Rule of Law in the United Kingdom is high in global comparison

0%-20% 21%-40% 41%-60% 61%-80% 81%-100%

Percentile rankings in rule of law in 2017

79

Efficiency of corruption control1 in 2017

Political environment: corruption control

1: See glossary for definitions 2:Democratic Republic of the Congo Note: Ranked from strong (2.5) to weak (-2.5) by country Source: World Bank Worldwide Governance Indicators 2018

Control of corruption is rated as strong

# Country/region Estimate

1 New Zealand 2.2

2 Norway 2.2

3 Finland 2.2

4 Denmark 2.2

5 Sweden 2.1

6 Singapore 2.1

7 Switzerland 2

8 Luxembourg 2

9 Canada 1.9

10 Netherlands 1.9

11 United Kingdom 1.8

12 Germany 1.8

13 Iceland 1.8

14 Australia 1.8

15 Hong Kong (SAR) 1.6

16 Bhutan 1.6

17 Ireland 1.5

18 Austria 1.5

19 Japan 1.5

20 Belgium 1.5

21 United States 1.4

22 Uruguay 1.3

23 France 1.3

24 Estonia 1.2

25 UAE 1.1

26 Chile 1

27 Portugal 0.9

28 Israel 0.8

29 Slovenia 0.8

30 Botswana 0.8

# Country/region Estimate

31 Cyprus 0.8

32 Georgia 0.7

33 Malta 0.7

34 Qatar 0.7

35 Poland 0.7

36 Brunei Darussalam 0.7

37 Rwanda 0.6

38 Czechia 0.6

39 Lithuania 0.6

40 Latvia 0.5

41 Spain 0.5

42 South Korea 0.5

43 Costa Rica 0.5

44 Saudi Arabia 0.4

45 Namibia 0.3

46 Cuba 0.3

47 Jordan 0.3

48 Oman 0.2

49 Slovakia 0.2

50 Italy 0.2

51 Croatia 0.2

52 Hungary 0.1

53 Malaysia 0

54 South Africa 0

55 Romania 0

56 Senegal -0.1

57 Montenegro -0.1

58 Tunisia -0.1

59 Burkina Faso -0.1

60 Morocco -0.1

# Country/region Estimate

61 Greece -0.1

62 Bahrain -0.1

63 Bulgaria -0.2

64 Jamaica -0.2

65 Suriname -0.2

66 Turkey -0.2

67 Ghana -0.2

68 India -0.2

69 Indonesia -0.3

70 Argentina -0.3

71 Belarus -0.3

72 China (Mainland) -0.3

73 Belize -0.3

74 Macedonia -0.3

75 Kuwait -0.3

76 Colombia -0.4

77 Serbia -0.4

78 Thailand -0.4

79 Albania -0.4

80 Mongolia -0.5

81 Philippines -0.5

82 Tanzania -0.5

83 Peru -0.5

84 El Salvador -0.5

85 Guyana -0.5

86 Bosnia and Herz. -0.5

87 Ivory Coast -0.5

88 Brazil -0.5

89 Zambia -0.5

90 Panama -0.5

# Country/region Estimate

91 Timor-Leste -0.5

92 Egypt -0.5

93 Ethiopia -0.6

94 Armenia -0.6

95 Myanmar -0.6

96 Vietnam -0.6

97 Sierra Leone -0.6

98 Ecuador -0.6

99 Algeria -0.6

100 Mali -0.6

101 Djibouti -0.6

102 Niger -0.6

103 Malawi -0.7

104 Bolivia -0.7

105 Gambia -0.7

106 Honduras -0.7

107 Paraguay -0.7

108 Dominican Republic -0.7

109 Guatemala -0.7

110 Nepal -0.7

111 Pakistan -0.8

112 Ukraine -0.8

113 Moldova -0.8

114 Gabon -0.8

115 Iran -0.8

116 Kazakhstan -0.8

117 Bangladesh -0.8

118 Mozambique -0.9

119 Nicaragua -0.9

120 Azerbaijan -0.9

# Country/region Estimate

121 Russia -0.9

122 Mexico -0.9

123 Laos -0.9

124 Kenya -1

125 Lebanon -1

126 Uganda -1

127 Kyrgyzstan -1.1

128 Nigeria -1.1

129 Uzbekistan -1.2

130 Cameroon -1.2

131 Haiti -1.2

132 Zimbabwe -1.3

133 Cambodia -1.3

134 Rep. of the Congo -1.3

135 Tajikistan -1.3

136 Venezuela -1.4

137 Iraq -1.4

138 Angola -1.4

139 Congo (Dem Rep)² -1.4

140 Chad -1.4

141 North Korea -1.5

142 Turkmenistan -1.5

143 Afghanistan -1.5

144 Sudan -1.5

145 Syria -1.6

146 Libya -1.6

147 Yemen -1.6

148 South Sudan -1.7

149 Somalia -1.7

150 Equatorial Guinea -1.8

80

Political environment: regulatory quality

▪ In 2017, the United Kingdom ranked #13 in Regulatory Quality out of 214 countries and territories covered by the Worldwide Governance Indicators

▪ It comes #7 when compared to other 49 countries in its region Europe & Central Asia

▪ Percentile rank indicates the country's rank among all countries covered by the aggregate indicator, with 0 corresponding to the lowest, and 100 to the highest rank

▪ Regulations are the rules that govern the everyday life of a country. Regulatory quality captures the ability of the government to create and implement policies and procedures that support economic growth and social welfare

Source: World Bank Worldwide Governance Indicators 2018

Regulatory quality in the United Kingdom is on a high level

Percentile rankings in regulatory quality in Europe & Central Asia in 2017

0%-20% 21%-40% 41%-60% 61%-80% 81%-100%

81

Governance against political instability and threat of violence/terrorism in 2017

Political environment: governance

1: Democratic Republic of the Congo Note: Ranked from strong (1.5) to weak (-3).. This indicator measures perceptions of the likelihood of political instability and/or politically- motivated violence, including terrorism Source: World Bank Worldwide Governance Indicators 2018

Moderate risks from political instability and threat of violence or terrorism

# Country/region Estimate

1 New Zealand 1.5

2 Singapore 1.5

3 Iceland 1.4

4 Luxembourg 1.3

5 Malta 1.3

6 Switzerland 1.2

7 Brunei Darussalam 1.2

8 Norway 1.2

9 Bhutan 1.1

10 Japan 1.1

11 Canada 1.1

12 Portugal 1.1

13 Finland 1.1

14 Uruguay 1.1

15 Austria 1.0

16 Botswana 1.0

17 Ireland 1.0

18 Czechia 1.0

19 Sweden 1.0

20 Netherlands 0.9

21 Australia 0.9

22 Slovenia 0.9

23 Slovakia 0.9

24 Denmark 0.9

25 Hong Kong (SAR) 0.8

26 Mongolia 0.8

27 Hungary 0.8

28 Lithuania 0.8

29 Croatia 0.7

30 Oman 0.7

# Country/region Estimate

31 Cuba 0.7

32 Estonia 0.7

33 Namibia 0.7

34 United Arab Em. 0.6

35 Cyprus 0.6

36 Germany 0.6

37 Qatar 0.5

38 Poland 0.5

39 Costa Rica 0.5

40 Latvia 0.5

41 Laos 0.4

42 Belgium 0.4

43 Albania 0.4

44 Panama 0.4

45 Chile 0.4

46 Bulgaria 0.4

47 Vietnam 0.3

48 United States 0.3

49 South Korea 0.3

50 Spain 0.3

51 United Kingdom 0.3

52 Jamaica 0.3

53 Italy 0.2

54 France 0.2

55 Argentina 0.2

56 Cambodia 0.2

57 Malaysia 0.2

58 Dominican Republic 0.2

59 Suriname 0.1

60 Paraguay 0.1

# Country/region Estimate

61 Zambia 0.1

62 Serbia 0.1

63 Ghana 0.1

64 Romania 0.1

65 Belize 0.1

66 Rwanda 0.0

67 Sierra Leone 0.0

68 Timor-Leste 0.0

69 Belarus 0.0

70 Kazakhstan 0.0

71 Montenegro 0.0

72 Guyana 0.0

73 Kuwait 0.0

74 Senegal 0.0

75 Nicaragua 0.0

76 Gabon -0.1

77 Ecuador -0.1

78 Greece -0.1

79 Equatorial Guinea -0.1

80 Turkmenistan -0.1

81 Gambia -0.2

82 Moldova -0.2

83 El Salvador -0.2

84 Macedonia -0.2

85 China (Mainland) -0.3

86 Peru -0.3

87 South Africa -0.3

88 Malawi -0.3

89 Uzbekistan -0.3

90 Angola -0.3

# Country/region Estimate

91 Bolivia -0.3

92 Georgia -0.4

93 Bosnia and Herzeg. -0.4

94 Brazil -0.4

95 Morocco -0.4

96 Kyrgyzstan -0.4

97 North Korea -0.5

98 Indonesia -0.5

99 Rep. of the Congo -0.5

100 Jordan -0.5

101 Honduras -0.6

102 Uganda -0.6

103 Guatemala -0.6

104 Tanzania -0.6

105 Saudi Arabia -0.6

106 Mexico -0.6

107 Nepal -0.7

108 Tajikistan -0.7

109 Russia -0.7

110 Haiti -0.7

111 Armenia -0.7

112 Djibouti -0.7

113 Thailand -0.8

114 Azerbaijan -0.8

115 Zimbabwe -0.8

116 Colombia -0.8

117 India -0.8

118 Israel -0.9

119 Burkina Faso -0.9

120 Iran -0.9

# Country/region Estimate

121 Bahrain -0.9

122 Algeria -1.0

123 Mozambique -1.0

124 Tunisia -1.1

125 Myanmar -1.1

126 Kenya -1.1

127 Cameroon -1.1

128 Ivory Coast -1.1

129 Venezuela -1.2

130 Philippines -1.2

131 Bangladesh -1.2

132 Niger -1.3

133 Chad -1.3

134 Egypt -1.4

135 Lebanon -1.6

136 Ethiopia -1.7

137 Turkey -1.8

138 Ukraine -1.9

139 Mali -1.9

140 Nigeria -1.9

141 Sudan -2.0

142 Congo (Dem Rep)1 -2.3

143 Libya -2.3

144 Somalia -2.3

145 Iraq -2.3

146 Pakistan -2.4

147 South Sudan -2.5

148 Syria -2.6

149 Afghanistan -2.8

150 Yemen -2.9

APPENDIX

82

▪ Data description and methods

▪ Glossary

▪ Authors

83

Data sources

The Statista Country Reports present quantitative data from various private and public sources of information. These sources include the International Monetary Fund, the World Bank, the United Nations, the OECD, the World Economic Forum, the International Labour Organization, the CIA World Factbook, the Election Guide, the Freedom House, the Political Handbook of the World and Statista itself. The data sources are indicated in footnotes throughout the report.

Forecasts and estimates

Certain diagrams within this Country Report include estimates or forecast values for the years 2017 to 2058. Missing datapoints in time series are subjected to interpolation when necessary. Estimated values and their sources are indicated in footnotes throughout the report.

Real GDP calculation

A country's real GDP is an inflation-adjusted GDP assessment reflecting its net growth. It can be used to compare economy sizes across countries. The data in this report are presented in U.S. dollars and maintain the growth rates of the real GDP series. The data are expressed in the base year of each country's national accounts, the year is country specific. For more information please refer to World Economic Outlook Database FAQ.

Difference between current and constant US$

Data reported in current US$ reflect the value the currency has in a particular year. Current data series are influenced by the effect of price inflation and differences in exchange rates and the comparability of growth rates between countries is limited.

Data expressed in constant US$ reflect the value of a currency in a particular base year. The individual base year listed in a country’s national accounts differs from country to country. Constant series are used to measure the true growth of a series by adjusting for the effects of price inflation.

Data description and methods (1/2)

Methodology and data used in this report

84

Business culture data

The data concerning the country-specific business cultures were collected between January 5 and February 19, 2019. In order to get reliable insights into the country-specific business cultures, solely people with business experience in the respective country were included in the survey.

The survey sample consists of 381 participants for a total of 127 countries. Due to the small sample size, the information presented in this report gives the reader a qualitative rough impression of the business culture in a country and cannot always be generalized.

Statista Fact Check

The Statista Fact Check of international retail and eCommerce structures was carried out between January 5 and February 19, 2019. In order to collect information about the national retail and eCommerce characteristics, only people living in the country of interest were asked to participate in the Fact Check.

The Statista Fact Check includes 254 participants and covers 127 countries worldwide. The information presented by the Statista Fact Check gives the reader an impression of the retail and eCommerce structures within the country, but cannot always be generalized.

Determination of retail market development stages

The development stages of the retail markets were identified based on the specific features of each individual retail market. In cases where only two out of three features qualified a country for a certain development stage, the country was placed in the transition zone or at the beginning of the higher development stage. For instance, in Egypt international chains operate in rural areas as well as medium-sized and large cities and the grocery market is characterized by international, national and independent store ownership (all indicators for a well-developed retail market). But since there is no possibility to pay via smartphones but only via traditional and electronic payment methods (indicator for a maturing market), Egypt was assigned an early well-developed retail market stage.

Data description and methods (2/2)

Methodology and data used in this report

85

Central bank interest rates: The central bank policy rate (CBPR) is the interest rate that is used by central banks to implement or signal their monetary policy stance. It is set to influence the economy (e.g. consumer prices, exchange rate or credit expansion, among others). It also establishes the levels of the rest of the interest rates in the economy as most private banks obtain their money from the central banks at that rate.

Constant US$: Data expressed in constant US$ show the data for each year in the value of a particular base year. The base year of each country's national accounts is country specific. Constant series are used to measure the true growth of a series by adjusting for the effects of price inflation.

Control of corruption: Perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests.

Convenience store: A convenience store sells convenience goods (e.g. frequently purchased inexpensive goods) and usually opens from early hours to late at night.

Glossary (1/4)

Current US$: Data reported in current US$ reflect the value the currency has in a particular year. Current data series are influenced by the effect of price inflation and differences in exchange rates, and the comparability of growth rates between countries is limited.

Discounter: A discounter is a department store which offers items at a lower price than other retail stores.

Disposable income: Gross national disposable income may be derived from gross national income by adding all current transfers in cash or in kind, receivable by resident institutional units from non- resident units, and subtracting all current transfers in cash or in kind payable by resident institutional units to non-resident units.

Ease of doing business score: The ease of doing business score captures the gap of each economy from the best regulatory performance observed across all economies considered. An economy's ease of doing business score is reflected on a scale from 0 to 100, where 0 represents the lowest and 100 represents the best performance.

Electronic payment method: Electronic payment methods combine debit and credit card payments.

Glossary of terms

86

Expense (% of GDP): Expense is cash payments for operating activities of the government in providing goods and services. It includes compensation of employees (such as wages and salaries), interest and subsidies, grants, social benefits, and other expenses such as rent and dividends.

Fiscal deficit/surplus: Fiscal deficit occurs when government expenses exceed revenues. When revenues exceed expenses, there is a fiscal surplus.

Fixed broadband subscriptions: Fixed subscriptions to high- speed access to the public internet at downstream speeds equal to or greater than 256 kbit/s.

Foreign direct investment: Foreign direct investment is an investment made by a resident enterprise in one economy (direct investor or parent enterprise) with the objective of establishing a lasting interest in an enterprise that is resident in another economy.

General government gross debt: Gross government debt consists of all liabilities that require payment or payments of interest and/or principal by the debtor (government) to the creditor at a date or dates in the future, such as loans, insurance, pensions and debt securities.

Glossary (2/4)

Government expense: Expense is cash payments for operating activities of the government in providing goods and services. It includes compensation of employees (such as wages and salaries), interest and subsidies, grants, social benefits, and other expenses such as rent and dividends.

Government revenue: Revenue is cash receipts from taxes, social contributions, and other revenues such as fines, fees, rent, and income from property or sales. Grants are also considered as revenue but are excluded here.

Gross domestic product: Gross domestic product is the expen- diture on goods and services by residents in the form of consumption expenditures, gross capital formation and exports minus imports.

Handcart or pavement vendors: Handcart or pavement vendors are street vendors, which sell products without a solid location or building.

Hypermarket: A hypermarket is a very large self-service warehouse that combines the features of a supermarket, department store, discount store and specialty store in one location.

Independent, owner-based store: An independent, owner- based store is a small store with a single or up to three locations. Usually, the store is owned by an individual or a two-person partnership.

Glossary of terms

87

Inflation: The rate of inflation is the percent change in the average consumer price index (CPI). The average CPI is a measure of a country's average level of prices based on the cost of a typical basket of consumer goods and services in a given period.

Internet penetration: Share of individuals in a country who have used the Internet (from any location) in the last 3 months.

Labor force: The labor force is the sum of persons in employment plus persons in unemployment. Together, these two groups of the population represent the current supply of labor for the production of goods and services taking place in a country through market transactions in exchange for remuneration.

Large city: A large city is characterized by more than 100,000 inhabitants.

Logistics performance index: Logistics professionals' perception of a country's quality of trade and transport-related infrastructure (e.g. ports, railroads, roads, information technology), on a scale ranging from

1 (very low) to 5 (very high). Scores are averaged across all respondents.

Medium-sized city: A medium-sized city has a population between 20,000 and 100,000 people.

Glossary (3/4)

Merchandise trade: Goods which add or subtract from the stock of material resources of a country by entering (imports) or leaving (exports) its economic territory.

Mobile payment method: Mobile payment means the use of smartphones to pay at a grocery store.

Mobile phone subscriptions: Subscriptions to a public mobile telephone service that provide access to the PSTN using cellular technology.

Net official development assistance: Net official development assistance (ODA) consists of disbursements of loans made on concessional terms (net of repayments of principal) and grants by official agencies of the members of the Development Assistance Committee (DAC), by multilateral institutions, and by non-DAC countries to promote economic development and welfare in countries and territories in the DAC list of ODA recipients. It includes loans with a grant element of at least 25 percent (calculated at a rate of discount of 10 percent).

Real GDP: Real gross domestic product (GDP) is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year, expressed in base-year prices, and is often referred to as "constant-price", "inflation-corrected" GDP or "constant dollar GDP". Unlike nominal GDP, real GDP can account for changes in price level and provide a more accurate figure of economic growth.

Glossary of terms

88

Revenue, excluding grants (% of GDP): Revenue is cash receipts from taxes, social contributions, and other revenues such as fines, fees, rent, and income from property or sales. Grants are also considered as revenue but are excluded here.

Rural area: A rural area is characterized by towns or villages of less than 20,000 residents.

Trade in commercial services: Trade in services refers to the sale and delivery of an intangible product, called a service, between a producer and consumer across country borders.

Traditional payment method: The traditional payment method combines cash and check payments.

Unemployment: Unemployment refers to the share of the labor force that is without work but available for and seeking employment.

Value added: Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources.

Glossary (4/4)

Glossary of terms

89

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Authors

Volker Staffa Tytti Mälkki Oliver Sánchez Melanie Mesloh

Volker Staffa studied Business with a focus on Logistics and Supply Chain Management in Hamburg and Rhode Island.

Volker has been responsible for the Statista Industry Reports since 2012.

Tytti Mälkki studied International Business and Politics in Copen- hagen, São Paulo, and Beijing, focusing on subnational econo- metric analysis.

Tytti has been part of Statista since summer 2017 with prior experience in consulting and communications.

Oliver Sánchez studied Inter- national Business in Mexico and Comparative Local Develop- ment in Germany, Italy, and Hungary.

Oliver joined Statista in summer 2018 after numerous years in marketing and strategy.

Melanie Mesloh studied Inter- national Economics, Innovation Economics, and Entrepreneur- ship in Bremen and Hatfield.

Melanie joined Statista in fall 2018 with prior experience in public research.

Senior Analyst

[email protected]

Analyst

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Analyst

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Junior Analyst

[email protected]

  • Introduction
    • Overview
    • Airports
    • Executive summary
  • Economy
    • Economic conditions
    • Public finances
    • Labor force
    • Business environment
  • Trade & Investment
    • Merchandise trade
    • Commercial services
  • Fitch Risk Indices
    • Development
    • High and low perfomer
    • Global comparison
    • Regional comparison
  • Society
    • Population
    • Income
    • Human Development Index
  • Retail & Consumption
    • Consumption
    • Consumer behavior
    • eCommerce
    • FinTech
  • Infrastructure
    • Digital
    • Transport
  • Politics
    • Political profile
    • Political environment
  • Appendix
    • Methodology
    • Glossary