Future growth is likely to be less reliant on consumption and more driven by investment, with net exports being much less of a drag. Instability stemming from the housing market remains a risk, although it may be smaller than at previous house price peaks. The slowdown and continuing low inflation warrant a pause in monetary tightening, although further tightening may be needed during 2005, in particular due to increasing pressures from the labour market. The government deficit is likely to be above 3% of GDP in 2004 and, in the absence of a spontaneous rise in taxes, additional action may be required to achieve a decisive and sustainable reduction.

Population (000s), 2003	60 483
Area (000 sq km)	245
Currency	Pound
GDP (Billion USD), 2003	1 795.0
Life expectancy at birth (Women, Men), 2001	80.4, 75.7
Total labour force (000s), 2003	30 178
Government type	Constitutional Monarchy

Indicators	% change unless otherwise indicated
	2004	2005	2006
GDP growth	3.2	2.6	2.4
Household savings ratio	6.4	7.4	7.9
Consumer price index	1.3	1.7	2.1
Short-term interest rate (%)	4.6	5.5	5.8
Unemployment rate (%)	4.7	4.7	5.0
General government financial balance (% GDP)	-3.2	-3.2	-3.3
Current account balance (% GDP)	-2.2	-2.4	-2.2

Source: OECD© OECD Observer No 245, November 2004