The UK is set to become the best performing economy in western Europe next year, and is likely to overtake powerhouses Germany and Japan in the 2030s, a report said today.
The World Economic League Table from think tank the Centre for Economics and Business Research (Cebr), said the UK is set to rise up the world rankings due to the strength of its IT and software industries as well as its culturally diverse workforce.
The UK is currently the fifth largest economy in the world, with a gross domestic product (GDP) worth three trillion US dollars (£2 trillion) this year, behind Germany at 3.3 trillion US dollars (£2.2 trillion), and Japan in third spot at 4.1 trillion US dollars (£2.7 trillion).
The US remains the richest country in the world with a GDP worth 18 trillion US dollars (£12.1 trillion), followed by China at 11.4 trillion US dollars (£7.6 trillion).
However, during the 2030s the report said the UK is itself due to be overtaken by developing nation Brazil, currently worth 1.8 trillion US dollars.
The report also points out a number of risks to the UK economy.
It said: “Its weakness is its bad export position and unbalanced economy, with many parts of the country heavily dependent on subsidies from the relatively high taxes levied on Londoners.”
The survey added that the possibility of Scotland, or even Northern Ireland, seceding from the union would hurt growth.
It also warned that the UK’s referendum on its continuing membership of the European Union next year may lead to a more insular culture, which would also generate slower economic expansion.
A UK Government spokesman said: “The Government’s long-term plan has laid the foundations for a stronger economy.
“The UK is now set to be the best performing economy in western Europe and it could overtake Japan in the 2030s and then Germany.
“With the deficit reduced by almost two thirds as a share of GDP since its peak in 2009-10, an average of 1,000 extra people in work each day and employment rates at a record high, the Government’s plan for a more prosperous future is delivering for working people.”
Due to slower Chinese economic growth and a weaker currency, the Cebr has pushed back last year’s forecast of when the Asian nation will overtake the US to become the world’s richest country by four years to 2029.
It adds that sixth place France, with a GDP of 2.4 trillion US dollars (£1.6 trillion), and Italy, with an economy worth 1.8 trillion US dollars (£1.2 trillion) in eighth spot, are in danger of losing their seat at the top table of the world’s richest nations.
The Cebr said these countries are in danger of exclusion from bodies like the G8 group of richest eight nations and perhaps eventually the G20 if their economies persistently under-perform.