The UK has a partially regulated market economy

The UK has a partially regulated market economy.[254] Based on market exchange rates, the UK is today the fifth-largest economy in the world and the second-largest in Europe after Germany. HM Treasury, led by the Chancellor of the Exchequer, is responsible for developing and executing the government’s public finance policy and economic policy. The Bank of England is the UK’s central bank and is responsible for i

ssuing notes and coins in the nation’s currency, the pound sterling. Banks in Scotland and Northern Ireland retain the right to issue their own notes, subject to retaining enough Bank of England notes in reserve to cover their issue. The pound sterling is the world’s third-largest reserve currency (after the US dollar and the euro).[255] Since 1997 the Bank of England’s Monetary Policy Committee, headed by the Governor of the Bank of England, has been responsible for setting interest rates at the level necessary to achieve the overall inflation target for the economy that is set by the Chancellor each year.[256]

The UK service sector makes up around 79 per cent of GDP.[257] London is one of the world’s largest financial centres, ranking 2nd in the world, behind New York City, in the Global Financial Centres Index in 2020.[258] London also has the largest city GDP in Europe.[259] Edinburgh ranks 17th in the world, and 6th in Western Europe in the Global Financial Centres Index in 2020.[258] Tourism is very importan

t to the British economy; with over 27 million tourists arriving in 2004, the United Kingdom is ranked as the sixth major tourist destination in the world and London has the most international visitors of any city in the world.[260][261] The creative industries accounted for 7 per cent GVA in 2005 and grew at an average of 6 per cent per annum between 1997 and 2005.[262]