Brexit Hurts UK Economy And Causes It To Drop Behind France

The United Kingdom has dropped behind France in the latest World Economic League Table (WELT) putting it at sixth place while France is now the world’s fifth largest economy. The WELT is published by economic think tanks CEBR and Global Construction Perspectives. It covers 188 countries and analyses trends in economic growth.

UK’s slump is largely attributed to the pound tumbling since June when the British voted in favour of leaving the European Union. The pound has dropped by 18 percent against the U.S. dollar and 10 percent against the euro in the past six months. CEBR analysts believe that consumer spending is likely to be hit in the UK as a result of the falling pound and will get significantly squeezed during the next year.

According to the report, the UK will however catch up with France in 2021 and reclaim its position in 2026. By 2030, the UK will drop again, reaching eighth position as other global economies like India, Brazil and Korea climb up the list. The United States is expected to retain its top spot but China will overtake it by 2030,not withstanding recent signs of a slowdown in its economy.

In a statement Douglas McWilliams CEBR president said

The World Economic League Table tracks the pace of globalization as the former leading economies from the West get overtaken by fast growing emerging economies. China continues to be on track to become the world’s largest economy. India is now growing faster than China and will reach number three by 2024. Korea overtakes both the UK and France before 2030 as will Brazil

By 2030, Indonesia will feature in the top ten while the Philippines will make it to the top 20. Russia is expected to drop to 14th place on the list by 2030. The report sees its economy being hit by the continuing lower cost of the Brent crude. The report has predicted a slowdown in coming years as several nations move towards protectionist policies largely driven by U.S. President-elect Donald Trump’s initiatives.

Graham Robinson, director of Global Construction Perspectives pointed out that several governments were seeking to spend in infrastructure in an effort to boost economic growth. But in his view even President-elect Trump’s Trillion Dollar Infrastructure Plan is likely to show results only in 2018 or even later. As per WELT, some countries like Israel and Sweden are likely to benefit from the growth of the flat white economy that’s driven by creative and digital sectors.

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