UK overtakes France - but only just

Friday 26 December 2014

Britain has overtaken France to become the world's fifth largest economy - and will even outstrip Germany by 2030, according to a new global league table. But economics consultants Cebr Global said that the tiny margin between the UK and France made the result too close to call with certainty. And recent changes mean that the UK gross domestic product (GDP) figures include spending on illicit services such as prostitution and drugs, which are not counted in France.

The group said that the "unstoppable" rise of India will see it surpass Britain to become the largest economy in the Commonwealth in 2018 and the third largest economy in the world by 2024. The latest edition of Cebr Global's World Economic League Table (WELT) shows China's growth continuing so strongly that it is now predicted to overhaul the US as the world's biggest economy by 2025 - compared to 2028 last year.

UK GDP in 2014 was 2,828 billion US dollars (£1,820.4 billion) compared to 2,827 billion dollars (£1,819.7 billion) for France, according to the new report.

The gap is "well within the margin of error", said Cebr Global, adding that if France's markets in drugs and prostitution were included, they may prove to be "larger than their British counterparts".

Cebr Global predicts that Germany will slide back economically, due to its declining population and the likely weakness of the euro, to the extent that Britain will overtake it in 2030 for the first time since 1954 - when the comparison was with West Germany alone.

But if Germany left the euro, the group forecasts that its currency strength would mean that the UK would be unlikely to overtake it until around 2050, by which point Britain's superior demographics would prove "irresistible". If Scotland were to leave the UK, Germany would still be well ahead in GDP terms by this point.

The World Economic League Table tracks the size of different economies across the globe and forecasts future changes as far ahead as 2030.

Its 2014 ranking puts the US first, followed by China, Japan, Germany, the UK, France, Brazil, Italy, India and Russia, in that order.

By 2030, it forecasts that globalisation will have reached its mature phase, with China installed as the world's biggest economy ahead of the US and India in third place, followed by Japan, Brazil, the UK, Germany, South Korea, France and Russia.

Cebr chief executive Douglas McWilliams said: "The fun of the world economic league table is that it brings things back to hard figures. Countries like Russia and Argentina, who have invaded neighbouring countries and whose leaders spout aggressively nationalistic rhetoric, are brought down to earth by their falls in the league table as their economies collapse.

"The World Economic League table also shows the dramatic changes now taking place in the world's economic geography with slow-growing European economies falling back and Asian economies, even though their growth is slowing, catching up.

"The only European economy that rises consistently in this league table is Sweden, where the economy was revitalised by the previous government. There may be lessons here for other European economies."