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G-20 nation profile: United Kingdom
Sunday, September 20, 2009

Here is an overview of the United Kingdom, one of the group of 20 countries attending the upcoming summit in Pittsburgh.

WHO IS THE LEADER FROM BRITAIN ATTENDING THE G-20 SUMMIT?

Prime Minister Gordon Brown, one of the world's most enigmatic politicians, plans to attend. Born in Scotland in 1951, Mr. Brown served as Tony Blair's chancellor of the exchequer and succeeded his political rival as Britain's prime minister in 2007. It's been a rocky ride, to say the least. Mr. Brown has come under increasing criticism at home for his handling of the global financial crisis, as well as domestic political problems that have hurt his Labor Party, including a recent scandal over government expenses.

WHAT ARE THE CURRENT ECONOMIC CONDITIONS IN BRITAIN?

In the second quarter, the British economy contracted by 0.8 percent. In human terms this meant an additional 220,000 people lost their jobs. Official figures say the jobless total is now 2.4 million -- the highest figure since 1995. As in the United States, the trend is for unemployment to continue to rise for the rest of 2009 and possibly into 2010.

WHAT IS THE GENERAL MAKE-UP OF THE BRITISH ECONOMY?

Britain's Gross Domestic Product of $2.6 trillion makes it Europe's third-largest economy after Germany and France, and the sixth biggest in the world, according to the International Monetary Fund. Its major industry? Financial services, financial services and financial services. Headquartered in London and the southeast of England, the sector now accounts for almost 20 percent of the economy's output. The bailout has restored the millionaire bonus culture to the City, London's financial district, but not the tens of thousands of jobs that were lost almost overnight following the collapse of Lehman Brothers last autumn.

WHAT IS MR. BROWN HOPING TO GET OUT OF THE G-20 SUMMIT?

Mr. Brown hopes to get domestic political traction. With an election likely in May and his Labor party currently 16 points behind the Conservatives in public opinion polls, he needs to remind people of the starring role he played last autumn in designing and leading the international bailout of the global financial system. Mr. Brown argues the coordinated action he led saved the world from a second Great Depression. Still that may not be enough. Mr. Brown and Labor's electoral position look decidedly grim.

WHAT ELSE SHOULD WE KNOW ABOUT BRITAIN'S CURRENT POLITICAL AND ECONOMIC SITUATION?

All signals in Britain are mixed. The Institute of Chartered Accountants released a report on Aug. 24 noting that business confidence is up, and the survey's participants say the recession is over. On the other hand, 5 million British citizens who usually holiday abroad stayed at home this summer. But this has not led to increased employment at British vacation spots. House sales are up, but one in 10 is falling through as mortgage companies find nits to pick in mortgage applications. Asking prices continue to drop. Most importantly, the British government continues to own massive stakes in the nation's biggest banks, so Britain is more dependent on the banks' performance than other developed countries.

GlobalPost, a Web-based news organization with 70 correspondents in more than 50 countries, is working with the Post-Gazette on G-20 coverage.
First published on September 20, 2009 at 12:46 am