I found Akala's book 'Natives' really good for understanding UK racism in its historical context.
The effects of the British Empire were and are seismic: on an institutional level it put white supremacy at the centre of our politics, judiciary and education. On an individual level, the elite sold white supremacy to the working class to turn them against their natural allies (those in the British colonies or who had emigrated from them to the UK, who were/are being screwed over by the same tiny bunch at the top) rather than coming together in solidarity with them, against the elite.
So when people refer to the country being racist, what they mean is that our institutions still rest on the presumption of white supremacy: who learnt about the British empire at school? How many white 12 year olds are regularly stopped and searched for 'fitting the description' of someone who committed a crime?
Institutional white supremacy does filter down to individuals, in the sense that we internalise what we are taught at school and if our experience matches the political line that we are an open, liberal multicultural society and the police are there to protect us, then of course we feel taken aback by the idea that for people of colour this is just not the way they experience UK life at all. Add to this the fact that racism - rather than something to be recognised and unpicked at institutional and individual level - has come to mean something entirely individual and amoral: this means that people equate being called racist or their country try being called racist with being called 'bad people'. No one likes being called a bad person, so they tend to quickly and angrily refute it rather than engaging with the experiences of people of colour and seeing how we could work together to dismantle the structures that enable racism to continue.
My husband got on the bus in a city outside of London recently and tapped his card on the contactless pad, not knowing that you had to ask the driver for a ticket first. The driver said 'your card doesn't work, get off'. Only when my mum got on behind him and said she'd buy his ticket did the driver explain - to her, not him - that he needed to tell him the destination first. So if my husband hadn't been with white people, he'd have been kicked off. Several people I've told this story to as an example of 'subtle' racism (it's not even that subtle!!!) have tied themselves in knots coming up with reasons why it wasn't about race. For him, who lives with this every day, it is exhausting.