UK is a large economy which is serving the interests of its citizens, the European Union and the partner countries. The economy of UK has been rising and falling depending on the changes in the market that takes place and enforces a change in the way the economy operates. Before the industrial era, the economy was a mercantilist one which believed in the prosperity of the nation by preserving the wealth internally and not letting it go out by means of import. There came many inventions and advancements in technology, communication, transportation which desired for a better life and Adam Smith’s writing of a free economy had a large influence on the government which liberalised the policies and minimised its interventions. This led to an uneven distribution of resources and inequality increased with lot of money being in very few hands. The great depression had a devastating impact on the country which then adopted the writings and ideas of John Maynard Keynes who proposed a balanced economy with government playing a central role in the regulation of the economy. As progress was seen and became faster than the policies introduction, government intervention came to be seen as a hurdle in massive growth in the private sector. Friedrich Von Hayek was an economist against socialism and asked for a free market economy to help the private sector prosper. This brought in the more reforms of minimum intervention but with a regulatory body always above the corporations and allowing them to enter into pacts with foreign countries. This changed the whole scenario back into the Adam Smith’s ideology of a free market but with legislation playing its role better and efficiently. Thus, UK economy has been rising and falling depending on the external factors and it is probably bound to act with the flow as change is unavoidable in any circumstances.