A question on UK Economy ?

Question

What are the main factors that contribute UK economic growth?

UK is not an industrialist country any more and depends more on services (thats what i have read in many articles) but I could never understand what are exactly those services that generates money for them?

To what countries do they sell those services?

What is exactly the nature ofthose services?

One of my friend said to me that landing money to different countries and their banks in the world through different British finacial institute and making profit through is the exact business they do ?
But Iam still not satisfied and convinced with that answer.

Can any body please help me out?

Answer 1

The "service industry" is the term given to an area of the economy that does not manufacture goods or products or provide any raw products for making such goods.

The "City" is probably the most important element of the service sector of the UK economy. It provides the knowledge required to create returns from surplus money. The money comes from 2 areas, inside the country and from outside the the country. The type of institutions that have this spare money are banks, pension funds and high net worth governments and individuals. Some of this spare money can be moved about quickly to secure the best rates of return and is sometimes called "hot money" or "petro dollars".

There are many ways of making more money from money and the city are ever more inventive of creating new methods of doing this. Derivatives, Hedge funds, securitisation, spread betting etc etc. Our boys are at the cutting edge of creating angles to make money for their clients and their fees are percentage based which is why the economy benefits so greatly.

Answer 2

You may not be understanding that the UK creates wealth in its own domestic economy, without having to provide services to outer countries. You do not have to manufacture any tangible object to create wealth, and a country does not have to export anything to create wealth. You simply need to somehow create value for other people -- that is what creates wealth.

So most of UK's wealth comes from its internal activities, all the mundane stuff like retail stores and food processing and restaurants. And UK gets a lot of tourism money. But London is certainly known as one of the great financial centers of the world, so much wealth comes from corporate finance -- the issuing and trading of stocks and bonds and commodities and related financial services for companies based all over the world.

Answer 3

You have stumbled on to the question of the post-industrial economy. I don't have the time to fully answer it right now. I will try to add to this answer in about an hour or so.

Hope this helps (or at least it will)
Good luck!