26 Dec 2013

Britain ‘will become biggest economy in Europe’

The Centre for Economics and Business Research (CEBR) predicts the UK’s GDP will move ahead of France by 2018, then leapfrog Germany by 2030.

However, despite being forecast to be the second most successful of the western economies after the US, the UK’s economy will fall behind the accelerating economies of India and Brazil.

“Germany is forecast to lose its position as the largest western European economy to the UK around 2030 because of the UK’s faster population growth and lesser dependence on the other European economies,” the report said.

But it added: “If the euro were to break up, Germany’s outlook would be much better. A Deutschemark-based Germany certainly would not be overtaken by the UK for many years, if ever.”

Douglas McWilliams, the CEBR’s chief executive, told the Daily Telegraph that Britain could become even stronger outside the European Union.

“My instinct is that in the short term, the impact of leaving the EU would undoubtedly be negative,” he said.

“My suspicion is that over a 15-year period, it would probably be positive.”

Shrinking gap

It added that a factor driving the UK’s move ahead of Germany is the assumption of a falling value for the euro, Germany’s falling population and the UK’s rising population. The gap between the two countries will fall from almost £610bn in 2013 to just £183bn in five years.

The UK’s GDP will grow from more than £1.59tr in 2013 to £2.6tr in 2028, compared to China which is predicted to be in top position with a GDP of more than £20.5tr, ahead of the US with an estimated £19.7tr.

Japan will fall from its steady position in the global league of third to fourth by 2028, overtaken by India and followed by Brazil, Germany and the UK.