Britain is forecast to overtake Germany “around 2030” as the powerhouse economy of western Europe according to a global league table published today.
Researchers at think-tank the Centre for Economics and Business Research (CEBR) believe that the UK economy will gather momentum, putting its gross domestic product (GDP) just 3 per cent behind that of Germany by 2028.
The UK is then predicted to overtake Germany as the number one western European economy around the end of that decade.
Among the other changes in the new world order forecast by CEBR is China overtaking the United States in 2028 as the world’s largest economy – several years later than some analysts have suggested. India’s GDP is likely to overtake Japan’s in 2028, today’s report also notes.
CEBR said its annual “world economic league table” had been updated to take account of fluctuations in energy supplies and falling oil and gas prices forecasts for the 2020s, weaker commodity prices than had previously been expected and the sell-off of some emerging market currencies in mid-2013.
Douglas McWilliams, executive chairman and founder of CEBR, said: “The UK is forecast to be the second most successful of the western economies after the US.
“Positive demographics with continuing immigration, rather less exposure to the problems of the eurozone than other European economies combine with relatively low taxes by European standards to encourage faster growth than in most western economies.”
He added: “Issues for the UK include the need further to re-orient its exports to the faster growing markets, an unresolved relationship with the rest of the EU and the possibility of breakup – highlighted by the referendum on Scottish independence in September 2014.
“If its problems can be avoided, the UK is forecast actually to gain a place in the league table by 2018, overtaking France.
“The factors driving the UK’s overtaking Germany are the assumption of a falling value for the euro, Germany’s falling population and the UK’s rising population.”
The CEBR report also has the Brazilian economy remaining behind the UK until 2023.
It overtook Britain in 2011 to become, briefly, the world’s sixth largest economy but has since fallen back.
“In 2014, while the football World Cup is held in Brazil, it looks likely that Britain beat Brazil at something by still having a larger economy,” joked McWilliams.
The research follows a raft of upgrades to UK GDP growth over the coming few years.
Official figures last week made upward revisions to GDP data for the first and second quarters of 2013. It means that economic output is closer to its pre-recession peak than previously thought.
However, Britain’s public finances still make for gloomy reading and there are concerns that the Chancellor, George Osborne, will overshoot his borrowing target.
Figures released on Tuesday showed that UK productivity relapsed in the third quarter, in terms of output per hour worked, but was slightly up in terms of output per worker.