The British economy is set to cement its advantage over France in the coming years despite the same economy 15 years ago, the Daily Mail reports.
The Centre for Economics and Business Research (CEBR) forecasts that UK output will be 10.2% higher than France this year. According to the report, the UK’s lead will increase to 19.9 per cent by 2038.
According to CEBR, Germany will remain Europe’s largest economy during this time, although its lead over the UK could shrink from 32.5% to 28.8% in 2038.
Since 2010, the UK economy has grown faster than that of any major European country, outpacing Germany, France and Italy. These projections cast doubt on claims that leaving the European Union has slowed the UK’s economic growth.
Pushpin Singh, senior economist at the CEBR, stated that the advantage over France was likely to grow in part because of the size of the French state and even higher tax levels over the Channel than in the UK.
“One prominent distinction lies in the substantially larger role played by the French public sector within the domestic economy. This distinction is underscored by discernibly different attitudes toward taxation, with France ranking second-highest among Organisation for Economic Co-operation and Development states in terms of tax-to-GDP ratio, registering at 45.1 per cent in 2021.”
Singh said such figures “stands in stark comparison” with the UK ratio of 33.5 per cent, adding that the “cherished French model of social protection has been a contributing factor to suboptimal productivity growth.”
Chancellor Jeremy Hunt announced national insurance cuts due next month. Since inflation has fallen from a peak of 11.1 per cent in 2021 to 3.9 per cent now, many expect the Bank of England to cut interest rates next year. The first drop is expected to take place as early as March, with rates falling to 3.75 per cent by the end of 2024.
The UK is the sixth largest economy in the world after the US, China, Germany, Japan and India. Meanwhile, France ranks seventh and Italy comes in eighth. CEBR expects the UK to remain in sixth position by 2038, with Germany dropping to fifth place and Italy slipping to 12th.
By then, China will become the world’s largest economy, followed by the US in second place, India in third and Japan in fourth, according to CEBR’s prediction.
