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United Kingdom

United Kingdom

Population 64.5 million
GDP per capita 45,729 US$
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major macro economic indicators

  2013 2014 2015(f)  2016(f)
GDP growth (%) 2.2 2.9 2.2 1.8
Inflation (yearly average) (%) 2.6 1.5 0.1 1.5
Budget balance (% GDP) -5.7 -5.7 -4.4 -3.0
Current account balance (% GDP) -4.5 -5.1 -4.3 -3.9
Public debt (% GDP) 86.2 88.2 88.3 88


(f) Forecast


  • Oil and gas production covering three-quarters of energy needs
  • High-tech sectors (aeronautics, pharmaceuticals)
  • Low corporation tax


  • Dependence of the economy on financial services
  • High levels of debt and public deficit
  • High level of private debt
  • Risk of EU exit 


Growth based on solid foundations

After reporting better performances than many of major advanced economies in 2015, UK growth should decline in 2016 against the backdrop of rising uncertainty linked to a possible “Brexit” (leaving the European Union) which could way on business and household confidence. It will still be sustained by private consumption, associated with wage growth (the minimum wage increased by 3% at the end of 2015) and the ongoing improvement of the labour market situation (unemployment rate around 5% at end 2015), all of this in a favourable context of low borrowing costs and lower savings rate. However, these drivers will weaken slightly, given the expected slight inflation rebound. The rise in property prices in 2015 (almost 8%) could continue in a context of still limited supply, which will sustain consumption but limit opportunities for first-time buyers and will not help bring down the high level of household debt (125% of GDP). The risk of a property bubble therefore needs watching. Investment on the other hand will be supported by the solid financial position of businesses and advantageous financial conditions. TheFunding forLending Schemewill, meanwhile, be extendeduntil January 2018 and the amount which banks can borrow will gradually be reduced. However it should be hampered by the weakening business confidence. Investors could indeed adopt a wait-and-see approach due to the “Brexit” risk. Large infrastructure projects remain however a priority for the authorities (£100 billion in spending by 2020 announced, i.e. 5% of GDP in 2015), especially with a view to achieving a recovery in productivity, which remains a key issue. External trade will continue to penalize activity with higher wage costs limiting competitiveness gains, so exports will rise only slightly due to the modest euro zone recovery. This trend is unlikely to offset the liveliness of imports, buoyed by domestic demand.

Inflation struggled to stay in positive territory in 2015, in particular because of the drop in commodity prices and the appreciation of the pound sterling against the euro. In 2016, it is expected to slightly rise, as the drop in energy prices comes to a halt, wages rise, reduction in spare capacity and less upward pressure on the pound against the euro. Monetary policy is unlikely to be tightened by the end of this year.


Fiscal consolidation remains a government priority

The government is still on a programme of fiscal consolidation, even if the deficit is reducing more slowly than expected. This is being carried out through spending cuts (public sector wage moderation, cuts in health spending). On the revenue side, the budget includes tax cuts on investments as well as lower corporation tax (down from 20% to 18% by 2020), and the gradual abolition of the levy on banks' balance sheets, which will, however, be replaced by an 8% levy on banks' profits. The budget deficit will accordingly come down in 2016.

The current account balance will improve slightly in 2016, on the back of the modest euro zone recovery, which will permit a reduction in the income deficit and increased exports of financial services (London still being the world's leading financial centre) and goods. Coupled with lively imports, the trade balance should ultimately remain stable overall.


Risk of "Brexit" cannot be ruled out

The Conservative Party won a majority in the May 2015 Parliamentary elections, bringing to an end five years of coalition with the Liberal Democratic Party and also strengthening the fiscal consolidation policy conducted by the Chancellor, George Osborne. The Labour Party has been weakened as a result. The referendum on Britain’s membership of the EU will take place on June 23. If the country decides to leave the EU, it will be forced out two years afterwards according to the Lisbon treaty. The magnitude of the effect  will depend on the definition of the new rules in terms of trade, legal and regulation. According to a Centre for Economic Performance study , a small increase in trade cost could reduce income by 1.1% of GDP (against 3.1% in case of strong increase).

The country has risen two places in the Doing Business rankings and is in first place among the G7 countries. The business climate is improving: it takes only 4.5 to set up a business (compared with an average of 20 in other countries), with a cut in corporation tax and increased exemptions on social security payments helping improve the country's attractiveness.


Last update : March 2016



Cheques are generally used for both domestic and international commercial transactions.


Bank transfers are common with SWIFT transfers being utilised regularly.


Direct Debits and Standing orders are recognised as an effective method of making payment for regular and expected financial transactions.



Debt collection


The debt collection process usually begins with the debtor being sent a “demand for payment” followed by a series of further written correspondence, telephone calls and, debt value permitting, personal visits and debtor meetings. Each stage of the collection process is designed to escalate from an amicable – pre-legal- collection phase towards litigation should the debtor fail to remedy the debt.


The Court judiciary consists of:


1)The County Court, has a purely civil jurisdiction.

Judges handle claim for collection of debts, personal injury, breach of contract concerning goods or property, recovery of land, family issues (divorce, adoption). Cases valued at less than GBP 25,000 (and GBP50,000 inpersonal injuries cases) must start in the county court.


2)The High court of Justice,

The High Court is based inLondonand also has provincial districts known as “District Registries” all acrossEnglandandWales. There are three divisions.


3)The Court of Appealconsists of two divisions: the “Civil Division” and the “Criminal Division”


4)The Supreme Courtis composed of 12 professional justices, with a president and a deputy president.





The United Kingdom has a “common law” system.



A) The Civil Procedure Rules


The Civil Procedure Rules / CPR (cf. Lord Woolf reform) were implemented inEnglandandWales, on 26 April 1999. The rules aim to simplify and speed up the process of taking cases through the courts.


There is an identical procedure and jurisdiction in both the County Court and the High Court.


Ø A number of litigation “tracks” have been created, each having their own procedural timetables.

Claims are allocated to a track by a procedural judge according to their monetary value.


B) The litigation process


1)Pre-action protocols

They are transactions process which should be followed before starting an action in court. These transactions are in place to encourage parties to try to settle a dispute without the need for court proceedings, thus minimising costs and court time.


2)Proceedingsare formally started when the claimant (formerly “the plaintiff”) issues a Claim Form in the County Court or the High Court.


There is a standard claim form for both High Court and County Court actions.


ð Full details of the complaint are set out in the Particulars of Claim.


ð The Claim Form must be served either by the court, or by the claimant, on the defendant.

The defendant then has the opportunity to respond to the claim form within 14 days of service.

An extension of time for a total of 28 days is agreed for debtor’s filing a defence and/or a counterclaim.


3) Once the parties have exchanged these formal documents, the court will order the parties to complete an “Allocation Questionnaire”.


4) Disclosure of documents

The parties will be required to make a reasonable search for documents which are relevant to the case.


The new rule states the parties should only have to disclose (i.e. provide to each other) documents which are necessary to determine the issues.

The purpose of disclosure is to prevent either party being taken by surprise in the course of the trial.

When the court requires technical evidence or expert opinion, the court may appoint a single expert to assist the judge. The court can direct the parties to appoint a single joint expert.

Experts are required to give independent evidence to assist the court.


5) Cross-examination

This is only permitted on limited issues upon application to the court where it is established that such cross-examination is necessary.

However, cross-examination of all factual witnesses and experts often is automatic and broad.

The claimant’ witnesses may be cross-examined by the opponent’s counsel and then re-examined on behalf of the claimant.


6) Freezing order (formerly Mareva Injunction)

A "freezing injunction" or "freezing order" is a special issue of interim order stopping a party from disposing of assets or removing them out of the country.


7) Judgment

- The judge adjudicates on the evidence put before him and does not make his own independent enquiries.

- The judge will consider previous court decisions in similar matters (common law system) and is usually bound to follow these.

- The judge will either give his judgment immediately, or if the matter is complex, will give judgment at a later date.


C) Enforcement of judgment.


If the claimant is successful in obtaining a monetary judgment, but if the defendant does not pay voluntarily, the methods are:


1)The garnishee order (third party debt order).

The claimant may obtain a court order which directs a third party who owes a debt to the defendant to pay directly the debt to the claimant.


2)The charging order.

The claimant may obtain a court order which grants a charge on certain assets of the defendant (e g. property, stocks, shares) .


3)The writ of execution (execution order).

The court bailiff seizes personal goods (except essential livings items) at the defendant’s home or premises to be sold by auction and to pay off the debt.


4)The attachment of earnings.

If the debtor has a professional activity, the claimant may apply for a court order that the employer deduct a proportion from the debtor’s wages each week or month in order to pay off the debt.


5)The winding up petition or the bankruptcy petition.

Ø Insolvency Act 1986 - regularly amended.

Insolvency trend United Kingdom
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