For a nation that led the Industrial Revolution in the 18th and 19th centuries, Britain is not doing too badly nowadays as one of the major players in the global economy. The country currently ranks as the fifth-largest economy in the world and the second-largest in the European Union.

Britain has successfully made the transition from a manufacturing-based economy to a largely services-based one. The British service sector has progressed substantially and now contributes to more than 70 percent of the country's total gross domestic product. The finance sector, especially banking and insurance, is the most dominant in the service industry, making up almost 30 percent of GDP.

London is one of the global command centers for international business and commerce, being home to the London Stock Exchange, the London International Financial Futures and Options Exchange, and the Lloyd's of London insurance market. The capital's financial exports is one of the significant contributors to Britain's balance of payments. The banking sector is rated as one of the strongest and most profitable in the world. There are currently more than 500 banks in London and the neighboring Docklands alone and a majority are operating on an international basis. London is also being developed as the center of Islamic finance.

Britain's open economy also benefited from the influx of globalization. Foreign investors are crowding in, making the country second only to the US as a destination for foreign direct investment. The labor market has also become more competitive as the formerly fierce unions were tamed and the flexibility of the labor force was increased.

Britain is also largely self-sufficient in petroleum and is one of the leading energy exporters in Europe. This energy supply is being offset though by the country's increasing energy consumption. Experts predict that Britain may shift from being a net exporter to a net importer of energy within 15 to 20 years. Oil production is currently on a decrease and while natural gas production is rising, this may still not be enough to cover the sky-rocketing consumption.

Despite being a member of the European Union, Britain has not adopted the euro as its official currency. The debate still continues on whether the United Kingdom should give up the pound sterling. The government has recently announced that a set of economic criteria must first be met before the issue of currency change can be put forward for referendum.

The all-important question about Britain's economy is whether it can keep up with the growing demands of globalization. The country has to deal with its rising taxes and with keeping its labor force competitive enough.