(Bloomberg) — Long-term forecasts suggest Britain could outperform struggling European countries over the next 15 years and maintain its position as the world’s largest economy.
The Center for Economics and Business Research has predicted that the UK and France will remain in 6th and 7th place respectively by 2039, with Germany, Italy and Spain falling back on the leaderboard.
The upbeat assessment will be welcomed by Prime Minister Keir Starmer after official figures this week showed the economy has not grown since the Labor government took office in July. Survey data shows that the final quarter’s misery is expected to extend into 2025.
Mr Starmer said his plan to deliver the fastest sustained growth in the G7 through planning reform, housebuilding and a plunge into public investment would ultimately pay off after Labor’s rocky start. I’m looking forward to it. However, CEBR suggested the problem would continue to hamper the UK economy.
CEBR said: “This outlook is significantly better than that of major European peers such as France and Germany, both of which are expected to weaken, but this is due to the outlook for the euro area economy rather than robust growth in the UK.” “It reflects the wrong thing.”
CEBR expects the UK to close the gap with Germany’s underperforming economy over the next 15 years. Europe’s largest economy is currently 31% the size of the UK, but is expected to be 20% larger than the UK by 2039. Similarly, the UK will outpace France and become 25% larger in output by 2039.
While the CEBR warns that Labour’s tax increases will mean slower activity growth in the short term, it expects trend growth to reach 1.8% in the longer term.
The United States is expected to limit competition with China and maintain its position as the world’s largest economy.
Sam Miley, CEBR Managing Economist and Forecast Lead, said: “While we expect China to eventually take the top spot, structural and demographic constraints mean that China will remain the global economic leader. It has been suggested that his term will be short-lived.”
On a per capita basis, the UK is expected to move up to 21st place, behind Malta, Germany and Sweden. Luxembourg is expected to remain the world’s wealthiest country per capita, followed by Ireland and Switzerland.
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