<P> The service sector dominates the UK economy, contributing around 80% of GDP; the financial services industry is particularly important, and London is one of the world's largest financial centres . Britain's aerospace industry is the second - largest national aerospace industry . Its pharmaceutical industry, the tenth - largest in the world, plays an important role in the economy . Of the world's 500 largest companies, 26 are headquartered in the UK . The economy is boosted by North Sea oil and gas production; its reserves were estimated at 2.8 billion barrels in 2016, although it has been a net importer of oil since 2005 . There are significant regional variations in prosperity, with South East England and North East Scotland being the richest areas per capita . The size of London's economy makes it one of the largest cities by GDP in Europe . </P> <P> In the 18th century the UK was the first country to industrialise, and during the 19th century it had a dominant role in the global economy, accounting for 9.1% of the world's GDP in 1970 . From the late 19th century the Second Industrial Revolution was also taking place rapidly in the United States and the German Empire; this presented an increasing economic challenge for the UK . The costs of fighting World War I and World War II further weakened the UK's relative position . In the 21st century, however, it remains a global power and has an influential role in the world economy . </P> <P> Government involvement in the British economy is primarily exercised by Her Majesty's Treasury, headed by the Chancellor of the Exchequer, and the Department for Business, Energy and Industrial Strategy . Since 1979 management of the economy has followed a broadly laissez - faire approach . The Bank of England is the UK's central bank and its Monetary Policy Committee is responsible for setting interest rates, quantitative easing, and forward guidance . </P> <P> The currency of the UK is the pound sterling, which is the world's third - largest reserve currency after the United States dollar and the euro, and is also one of the ten most - valued currencies in the world . </P>

Who is responsible for setting interest rates in the uk