Britain will leapfrog Germany to become Europe’s largest economy by 2030, economists predict.
Thanks to our decision not to join the euro, we will overtake France in less than five years to become the fifth-largest economy in the world.
In a significant boost to George Osborne’s austerity programme, the Centre for Economics and Business Research (CEBR) hailed the UK as the second-best performing economy in the Western world after the United States – and said France was one of the worst.
A vision of the future? The predictions, right, could be good news for George Osborne if true. The UK is set to beat Germany and France but lose out to Brazil and India, remaining the sixth-largest world economy
Our strong currency, low taxes and the projected rise in our population – in contrast with some of our competitors – means our GDP will outstrip France by 2018 and Germany 12 years later.
But competition from emerging economies means India and Brazil will overtake us by 2028, pushing us to seventh in the world economic league table.
By then, France will be only the 13th largest economy in the world – a humiliating blow to the proud nation and an indictment of current Socialist president Francois Hollande’s policies.
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Unbeatable: We could not hope to rival China, partly because of its huge population
The CEBR said Britain has prospered outside the eurozone and will continue to do so, while our low taxes have promoted growth.
By comparison, things are so bad in recession-hit Italy that this year the size of its economy has been exceeded by Russia.
Britain avoided a double-dip recession in the wake of the 2008 global economic crisis, and has now returned steadfastly to growth.
The UK’s economy is set to grow by 1.4 per cent this year – well ahead of countries struggling under the yoke of the eurozone.
Last night a Treasury spokesman said the study vindicates George Osborne’s austerity programme. He said: ‘Britain’s hard work is paying off and the long-term economic plan is working.
‘The economy is growing, the deficit is falling and jobs are being created and while this report is encouraging, the job is not yet done. So the Government will go on taking the difficult decisions needed to secure a responsible recovery for all.’
The study by the CEBR looks at the 30 largest economies in the world and predicts how they will fare in the coming years.
It finds that China will overtake the US as the world’s largest economy in around 2028. The report outlines how the so-called BRIC countries – Brazil, Russia, India and China – will soon start to outstrip their Western counterparts as their industrialisation takes hold.
India is predicted to outstrip Japan’s economy by 2028. Despite this exceptional rise, Britain is still giving the country millions of pounds in aid.
Hailing the strength of Britain’s recovery, the CEBR said population growth would be a factor in our future success. Germany, on the other hand, is set to see its population plummet.
Booming: China is expected to beat the U.S. to the top spot. Pictured: Workers at a clothing factory in Panjin
Changes: India will surge ahead but still receives British aid, while France could have grim times ahead
However, the CEBR warned that Britain’s prospects could be harmed if it fails to trade more with developing and growing countries such as China.
The economists hinted that leaving the EU could also be bad for our prospects, and that if Scotland leaves the union that would hit the size of our GDP.
Their report added: 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 said that by 2028, the UK economy is forecast to be only 3 per cent smaller than the German economy, meaning it is likely to become the largest Western European economy by around 2030. If the euro breaks up, the outlook for German GDP would be much better and the outlook for the other European economies correspondingly worse.
On the assumption that the euro holds, Germany drops from the fourth-largest economy in 2013 to the sixth largest in 2028 – after which it would drop below the UK. For France the drop is worse – from fifth in 2013 to 10th in 2023 and 13th in 2028.
CEBR’s latest forecasts now show China overtaking the US in 2028 to become the world’s largest economy. This is later than some analysts have suggested and reflects the continuing performance of the US as the West’s strongest economy and the slowing down of the Chinese economy.
India is expected to overtake Japan in 2028 to become the world’s third largest economy.
Brazil overtook the UK in 2011 to briefly become the world’s sixth largest economy. But it has since fallen back and is not expected to overtake again until 2023
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