The UK would outperform its struggling European peers in the next 15 years, helping it to cling onto its place among the world’s biggest economies, according to long-term projections by the Centre for Economics and Business Research (CEBR).
The UK and France would remain in sixth and seventh position by 2039, respectively, as Germany, Italy and Spain slip down the leaderboard, the London-based economics consultancy predicted.
The upbeat assessment would be welcomed by British Prime Minister Keir Starmer after official figures this week showed the economy has failed to grow since his Labour Party took power in July.
Photo: Bloomberg
GDP was unchanged in the three months through September, the Office for National Statistics said on Monday, a downgrade from its previous estimate of 0.1 percent growth.
The Bank of England predicted the economy would record zero growth in the final three months of this year, while purchasing manager surveys have painted a gloomy picture.
Starmer is hoping his plans to deliver the fastest sustained growth in the G7, through a blitz of planning reforms, housebuilding and public investment, would eventually pay dividends after a rocky start for the Labour Party. However, the CEBR suggested that problems would continue to hamper the UK economy.
“While this outlook is markedly better than key European peers like France and Germany, both of whom are expected to slip, this reflects a relatively poorer outlook for Eurozone economies rather than strong UK growth,” the CEBR said.
The CEBR expects the UK to narrow the gap with the poorer-performing German economy over the next 15 years. Europe’s largest economy is expected to be 20 percent larger than the UK’s in 2039, compared with 31 percent bigger now.
Similarly, the UK would outpace France and be 25 percent larger in terms of output by 2039, the CEBR said.
While the CEBR warned that Labour’s tax hikes would mean weaker activity in the short term, it expects the trend growth rate to hit 1.8 percent in the long term.
It expects the US to retain its crown as the world’s largest economy, holding off competition from China.
“We do expect China to eventually claim the top spot, though structural and demographic constraints suggest its tenure as the global economic leader will be brief,” CEBR managing economist and forecasting lead Sam Miley said.
On a per-capita basis, the UK is forecast to edge up a position to 21st place, just behind Malta, Germany and Sweden. Luxembourg is projected to remain the world’s richest nation per capita, followed by Ireland and Switzerland.
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