The Woolly Thistle has a lovely selection of yarns. I do love British yarn … also European, American, Portuguese, Icelandic and everywhere really!
Even though I live in Australia, which is famous for merino, most of that goes to be spun and woven in Italy into beautiful suiting. Our local knitting wool selection is actually not that great. And I personally am not fond of merino for handknitting. It is lovely and soft but does not hold up well to wearing in my experience.
New Zealand, just next door to us, has some lovely local yarns.
They even have a wild flock of sheep: