Pestle analysis of UK (United Kingdom). The UK is located on the northwestern coast of the mainland of the European continent. London is her capital. She consists of 4 countries with their own separate political and administrative systems; England, Wales, Scotland, and Northern Ireland. Their capitals are London, Cardiff, Edinburgh, and Belfast respectively.
The total area of the UK comprises 94,000 square miles. Over 67,886,011 people are living in the country. The official language of the country is English. Some of the other spoken languages are Scottish Gaelic and Irish.
Today, we’ll study the pestle analysis of UK. It would focus on the macro-environmental factors that impact her growth and productivity. For internal factors, check out the swot analysis of the UK. Here’s the pestle analysis of UK as follows;
Political factors impacting the UK
The UK is the world’s leading economically and technologically powerful country. She follows the constitutional monarchy and modern parliamentary democracy as a political system of the government. Where the monarch (current Queen Elizabeth II) is the head of the state, and the prime minister is the head of the government.
The elected prime minister manages the affair of the government as the head for 5 years. She has 4 political parties operating the political system of the government. They’re Scottish Nationalist Party, Liberal Democrats, Conservative, and Labour Party.
Stable Political Environment
The political environment of the UK is stable with effective government policies and a low corruption level. A stable political environment is key to the success of any country. It attracts foreign investors and tourists to visit the country and invest their capital.
The UK has maintained good relationships with different countries of the world regardless of their political system. Sometimes she supported the authoritarian and dictatorial regime of the 3rd world country. Many political analysts criticize her dual policies.
Out of all her political relationships and alliances, the USA is one of her strong allies. Both of these countries share the same common western values, culture, and language.
Many business circles were uncertain and confuse about the Brexit deal in the beginning. The UK has managed to establish a free trade agreement with the European Union. It would help her to be productive and grow without jeopardizing the relationship with the neighboring European countries.
Economical factors affecting the UK
According to a study, the UK’s annual GDP was 2.979 trillion US dollars by the end of 2020 and it ranked 9th world’s highest. 44,288 dollars is the annual per capita of the UK and it ranked 26th world’s highest. The decline in revenue and the country’s ranking is mostly due to the pandemic of covid-19.
As many of you know that the UK is one world’s most expensive places to live in. Her inflation rate in 2020 was 0.77% and it has declined from 1.79% since 2019. Many economists are suggesting that it was because of the government’s support and subsidies to the local businesses.
FDI (Foreign Direct Investment)
The business atmosphere, landscape, consumer market, and western culture attract tourists and investors. The UK is one of the top choices of investors to invest their capital. Groceries, technology, technology, real estate, and sport are some of the main attractive investment areas of investors.
The corporate tax rate of the UK in 2020 and 2021 is 19%. The government was supposed to reduce the rate to 17%, but it didn’t. If it had, it would have brought a lot of investors.
The unemployment rate in the UK in 2020 was 4.8% and it has increased by 0.4% since 2019. The shutdown of businesses due to the pandemic of covid-19 has amplified the unemployment rate. It’s not good for her economy; it would start the cycle of many problems. She should launch different projects to decrease it.
Social factors impacting the UK
According to a report by the National Statistic Office, the UK’s total population in 2039 would be around 74 million people. Her current population is more than 67 million people. The increase in the consumer market would create many opportunities in the following sectors like health care, insurance, real estate, and many others.
The UK has a multiculturally diverse population and it’s one of her key strengths. Businesses and companies offer different products and series to target segments of the market depending on their needs and requirement. The growing consumer market suggests that the business would have plenty of opportunities to grow and expand.
The literacy rate in the UK is 99%. She falls under the category of the world’s top countries that comprises of highly educated people. She ranked at 3rd position of the world’s best countries. The high education level is one of the reasons behind her growth and success.
Technological factors affecting the UK
The UK is the world’s tech advanced country. She has got the best institute for science and technology. London is her tech and financial hub. Private businesses and research institutes work on the development of technology to gain a competitive edge in the market. The competitive research environment pushes the tech industry toward innovation and creativity.
The Tech industry adds a lot of revenue to the UK’s GDP. The development in technology is bridging the gap between the rich and poor class and it’s pervading across the country. According to a study by Guardian, business in the UK attracted a record investment of 15 billion dollars in 2020.
Legal factors affecting the UK
The UK has various laws and regulations for businesses and companies to conduct their operation in the country. Some of the major laws are; Equality Act 2010 is to protect people from being discriminated and the Employment Act 1996 deals with issues like minimum wage, permanent leave, maturity, sick pay, holiday pay, and other issues.
Environmental factors impacting the UK
It is indeed that the UK has made tremendous economic and technological growth and progress. But it was at the cost of jeopardizing environmental sustainability. She has taken many steps to decrease environmental pollution. She is educating people to understand environmental challenges and act responsibly.
The weather of the UK
The weather of the UK plays a significant role in the development of the tourism industry, especially in the summer. According to an estimate, her tourism industry attracts roundabout 127 billion pounds of annual investment. Therefore, her people and business community should take eco-friendly steps without damaging the environment.
After a careful study of the pestle analysis of UK, we have realized that the pandemic of covid-19 has caused a lot of problems. Now the country should find a way to reduce the unemployment rate, taxes, and inflation rate. Such steps would resolve most of the problems.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.