Originally in the UK market contracts were the norm. Then Pay-As-You-Go opened the cellphone market up to teenagers, people on a limited budget, and people who used cellphones infrequently. That combined with the release of the Nokia 5150 and Nokia 3310 phones drove the market away from contracts.

Plus in the UK the regulator is much more active in promoting competition (VNOs, Number Portability, tariff changes are all things the regulator has done to promote competition). In the US the regulator couldn't care less.