Surprising new predictions: Over the next 15 years, the UK economy will be the best performing in Europe. Germany is losing momentum.
The UK will become Europe's best-performing major economy over the next 15 years, narrowing the gap with Germany and widening its lead over France, according to new long-term forecasts. The Center for Economics and Business Research expects UK GDP growth to stabilize between 1.6% and 1.8% by 2038, helping the country maintain its position as the world's sixth-largest economy.
Forecasts published on Tuesday predict that the UK will emerge from years of economic stagnation marked by Brexit and a series of shocks, including the pandemic and rising inflation.
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The British economy is growing faster than the Eurozone
The UK economy has been hobbled by weak productivity growth since the financial crisis, and labor supply problems have emerged in recent years. This has led the Bank of England to become more pessimistic about the UK's growth prospects in the coming years.
According to CEBR's long-term world economic rankings, the UK is expected to grow faster than the four major eurozone economies – France, Germany, Italy and Spain – but not as fast as the US.
“The fundamentals of the UK economy remain very strong,” said Pushbeen Singh, chief economist at CEBR. “London’s position as a center for financial and advisory services remains strong and, combined with the overall strength of the services sector across the UK, will drive growth in the UK.”
He said the economic impact of Britain's exit from the European Union “has either been exaggerated or has not yet been adequately researched.”
China is replacing the United States as the world's largest economy
The economic consulting firm expects China to overtake the United States as the world's largest economy in 2037, with global GDP doubling as emerging markets catch up with developed countries.
By 2038, Italy will fall out of the world's top 10 economies and will be replaced by South Korea. The United States and Germany will fall to the bottom of the rankings, while India and Brazil – two developing countries with large populations – will move up into the top ten.
Singh said France would underperform the UK largely because of its large public sector and high taxes, while a production slowdown in Germany would help the UK catch up.
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