England has a developed economy, considered the largest economy of the four countries of the United Kingdom. The English economy is one of the largest and most dynamic in the world. It has an average GDP per capita of £37,852 in 2022.

His Majesty's Treasury, led by the Chancellor of the Exchequer, is responsible for developing and executing the government's public finance policy and economic policy. Government involvement is also primarily exercised by the Department for Business and Trade and Department for Science, Innovation and Technology. Regarded as a highly developed social market economy, it has adopted many free market principles, yet maintains an advanced social welfare infrastructure.

England is a highly industrialised country. It is a leader in the high-tech, chemical and pharmaceutical sectors and in key technical industries, particularly aerospace, the arms industry, and the manufacturing side of the software industry. It is also an important producer of textiles and chemical products. Although automobiles, locomotives, and aircraft are among England's other important industrial products, a significant proportion of the country's income comes from the City of London and its financial hubs, banking, insurance, investment management and other related financial services. The UK technology sector is valued at US$1 trillion, third behind the United States and China, mostly based in England.

The service sector of the economy is largest in England and one of the largest in Europe. Construction industry, technology, and business services continue to produce economic growth, provided mainly by the growing services, administrative and financial sectors. Creative industries (arts, film production, product, fashion, design, music, IT, etc.) remain important to the national economy, with England having the second largest creative industry sector in Europe.

In the 18th century, England was the first nation to industrialise. In common with most other advanced industrialised economies, England has seen a decline in the importance of both manufacturing industries and primary-based extractive industries. Since the 1990s, the financial services sector has played an increasingly significant role in the English economy and the City of London is one of the world's largest financial centres. Banks, insurance companies, commodity and futures exchanges are heavily concentrated in the city.

The London Stock Exchange, the United Kingdom's main stock exchange and the largest in Europe, is England's financial centre, with 100 of Europe's 500 largest corporations being based there. The official currency in England is the pound sterling, whose ISO 4217 code is GBP. The "pound sterling" is the oldest currency in continuous use. Taxation in England is quite competitive when compared to much of the rest of Europe – the basic rate of personal tax is 20% on taxable income up to £31,865 above the personal tax-free allowance (normally £10,000), and 40% on any additional earnings above that amount.

England is a nation within the United Kingdom, which is a member of the Commonwealth of Nations, the G7, the G8, the G20, the CPTPP, the International Monetary Fund, the Organisation for Economic Co-operation and Development, the World Bank, the World Trade Organization, Asian Infrastructure Investment Bank and the United Nations.

GDP

Gross Domestic Product (GDP) figures are estimated (using a variety of means) for independent nations, and used to measure and compare aggregate (total) wealth between countries. Since England is not an independent state, but constitutes one of the four major nations of the UK (along with Scotland, Wales, and Northern Ireland), there are fewer internationally comparable figures available.

+ GDP (2023) Region (billion $) (billion €) (billion £) United Kingdom 3,601 3,160 2,720England3,0852,7072,330 London 818 718 618 Scotland 270 237 204 Wales 123 108 93 Northern Ireland 83 73 63

History

In medieval times (c. 11th–15th centuries), the wool trade was the major industry of England, and the country exported wool to Europe. Many market towns and ports grew up on the industry and flourished. Following the Black Death and the agricultural depression of the late 15th century, the population began to increase; but it was less than 2 million in 1600. The growing population stimulated economic growth, accelerated the commercialisation of agriculture, increased the production and export of wool, encouraged trade and promoted the growth of London.David M. Palliser, The Age of Elizabeth: England under the later Tudors, 1547–1603 p. 300.

The high wages and abundance of available land seen in the late 15th and early 16th centuries were replaced with low wages and a land shortage. Various inflationary pressures, perhaps due to an influx of New World gold and a rising population, set the stage for social upheaval, with the gap between the rich and poor widening. This was a period of significant change for the majority of the rural population, with manorial lords beginning the process of enclosure of village lands that previously had been open to everyone.Ian Dawson, The Tudor century (1993) p. 214

John Leland left rich descriptions of the local economies he witnessed during his travels from 1531 to 1560. He described markets, ports, industries, buildings and transport links. He showed that some small towns were expanding, through new commercial and industrial opportunities, especially cloth manufacture. He suggested that investment by entrepreneurs and benefactors had enabled some small towns to prosper.John S. Lee, "The functions and fortunes of English small towns at the close of the middle ages: evidence from John Leland's Itinerary." Urban History 37#1 (2010): 3–25. Taxation was a negative influence on economic growth, since it was imposed not on consumption, but on capital investments.Richard W. Hoyle, "Taxation and the mid-Tudor crisis." Economic History Review 51#4 (1998): 649–975. in JSTOR Exports increased significantly and privately owned companies traded with the colonies in the West Indies, North America and India.

The Company of Merchant Adventurers of London brought together London's leading overseas merchants in a regulated company in the early 15th century, in the nature of a guild. This enabled them to import a large range of foreign goods.Robert Brenner, Merchants and revolution: commercial change, political conflict, and London's overseas traders, 1550–1653 (Verso, 2003).E. Lipson, The Economic History of England 2 (1956): 196–268. Elizabethan England avoided major defeats and built up a powerful navy. On balance, it can be said that Elizabeth I provided the country with a long period of general if not total peace and generally increased prosperity due in large part to stealing from Spanish treasure ships, raiding settlements with weak defences, and selling African slaves. Having inherited a virtually bankrupt state from previous reigns, her policies restored fiscal responsibility. Her fiscal restraint cleared the regime of debt by 1574, and ten years later the Crown enjoyed a surplus of £300,000.Melissa D. Aaron, Global Economics (2005), p. 25. In the later decades of the reign, the costs of warfare — defeating the English Armada of 1589 and funding the campaigns in the Netherlands — obliterated the surplus; England had a debt of £350,000 at Elizabeth's death in 1603.

Under Elizabeth I crafts and manufacturing activities received a boost. Glass, ceramic, silk industry and exports of wool manufactures could be promoted. Economically, Sir Thomas Gresham's founding of the Royal Exchange (1565), the first stock exchange in England and one of the earliest in Europe, proved to be a development of the first importance, for the economic development of England and soon for the world as a whole. With taxes lower than other European countries of the period, the economy expanded; with more wealth to go around at the end of Elizabeth's reign than at the beginning.Ann Jennalie Cook (1981) The Privileged Playgoers of Shakespeare's London, 1576–1642,, Princeton University Press, pp. 49–96 . This general peace and prosperity allowed the attractive developments of the "Golden Age".Christopher Hibbert (1991) The Virgin Queen: Elizabeth I, Genius of the Golden Age, Da Capo Press, .

17th century In 1600, the queen chartered the East India Company (later the British East India Company) in an attempt to break the Spanish and Portuguese duopoly of Far Eastern trade. It established trading posts, which in later centuries evolved into British India, on the coasts of what are now India and Bangladesh. Larger scale colonisation in North America began shortly after Elizabeth's death. Originally chartered as the "Governor and Company of Merchants of London Trading into the East-Indies", the East India Company rose to account for half of the world's trade during the mid-1700s and early 1800s, particularly in basic commodities including cotton, silk, indigo dye, sugar, salt, spices, saltpetre, tea, and opium. The Bank of England was established in 1694 by Charles Montagu, 1st Earl of Halifax to act as the English Government's banker. It was primarily founded to fund the war effort against France. The king and queen at the time, William and Mary, were two of the original stockholders. The original Royal Charter of 1694, granted by King William and Queen Mary, explained that the Bank was founded to ‘promote the public Good and Benefit of our People’. According to Derek Hirst, the 1640s and 1650s saw a revived economy with growth in manufacturing, the elaboration of financial and credit instruments, and the commercialisation of communication. The gentry found time for leisure activities, such as horse racing and bowling. In the high culture important innovations included the development of a mass market for music, increased scientific research, and an expansion of publishing. All the trends were discussed in depth at the newly established coffee houses.

England became one of the most prosperous economic regions in Europe between 1600 and 1700. Industrialisation in England from the mid-18th century resulted in economic developments described by many historians as the Industrial Revolution.

As a result, Great Britain was one of the premier economies in Europe throughout the 19th century, the most prominent industrial power in the world economy, and a major political power. Its industrialists were major innovators in machinery such as steam engines (for pumps, factories, railway locomotives and steamships), textile equipment, and tool-making. England pioneered the railway system, and built many systems and manufactured most of the equipment other nations used. Its businessmen were leaders in international commerce and banking, trade and shipping. Its markets included both areas that were independent and those that were part of the expanding British Empire. After 1840, an economic policy of mercantilism was abandoned and replaced by free trade, with few tariffs, quotas or restrictions. The powerful Royal Navy protected British commercial interests, shipping and international trade, while the British legal system enabled the resolution of disputes relatively inexpensively, and the City of London functioned as the economic capital and focus of the world economy.

Sectors

Food and drink

The food and drinks industry is an important sector in England, worth £10.2 bn as of 2021, although this is down 9% from 2020 and 15% from 2019. Fruit and vegetable sales have been hit hardest, with sales down by 36%.

The top food and drinks export categories are:

Agriculture and Fisheries Alcoholic beverages (such as gin, wine, and whisky) (£2.3 bn) Miscellaneous (£1.7 bn) Hot beverages (such as coffee and tea) and spices (£1.2 bn) Sugar and honey (£245.4 m)