Over the next 15 years, Britain is expected to outshine its European neighbors economically, securing its place among the world’s largest economies, according to projections by the Centre for Economics and Business Research (CEBR). The report predicts Britain will maintain its sixth-place position globally by 2039, with France trailing in seventh, as other major European players like Germany, Italy, and Spain lose ground.
The forecast offers a glimmer of optimism for Prime Minister Keir Starmer, whose Labour government has struggled with stagnant economic growth since taking office in July. Recent data paints a bleak picture of the final quarter of the year, with sluggish performance likely to extend into 2025. Starmer remains committed to his ambitious growth plans for the UK, aiming to achieve the fastest sustained expansion in the G7 through sweeping planning reforms, housing initiatives, and increased public investment. Despite these efforts, the CEBR report suggests persistent hurdles will continue to weigh on the British economy.
CEBR indicated that Britain’s projected outperformance of France and Germany reflects the struggles of the Eurozone economies rather than exceptional growth in the UK. It estimates that the economic gap between Britain and Germany will narrow, with Europe’s largest economy expected to be only 20% larger than Britain’s by 2039, down from the current 31%. Similarly, Britain’s output is forecast to surpass France’s by 25% within the same timeframe.
The report acknowledges potential short-term setbacks due to Labour’s tax increases, predicting subdued activity growth initially. However, it anticipates the long-term trend growth rate to stabilize at 1.8%. On the global stage, the United States is expected to retain its position as the leading economy, holding off China for now. While CEBR foresees China eventually overtaking the US, structural and demographic challenges are likely to limit its reign at the top.
Per capita, Britain is predicted to rise slightly to 21st place, positioned just behind Malta, Germany, and Sweden. Luxembourg, Ireland, and Switzerland are expected to remain the wealthiest nations on a per-capita basis, with Luxembourg maintaining its lead.
This cautious yet relatively optimistic outlook underscores the complexities of Britain’s economic future, highlighting both opportunities for progress and persistent challenges in an uncertain global landscape.
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