Finally some good news (but not until 2050): British economy will be biggest in Europe in four decades, say experts

Hugo Duncan

Last updated at 11:47 PM on 30th December 2011

Britain will be the biggest economy in Europe with one of the wealthiest populations in the world by the middle of the century, according to leading economists.

Long-term forecasts by investment bank Goldman Sachs suggest the UK will fare better than its neighbours over the next four decades.

Britain is the third biggest economy in Europe behind Germany and France, but by 2050 it will have leapfrogged both countries.

On the rise: The UK economy will leapfrog those of France and Germany within four decades

On the rise: The UK economy will leapfrog those of France and Germany within four decades

The UK will also jump from being the sixth wealthiest country in the world to third, based on national income per head.

Only people in the United States and Canada will be more prosperous by 2050, according to the report.

World economic league

The UK is currently the seventh biggest economy in the world having recently been overtaken by Brazil

Dominic Wilson, chief markets economist at Goldman Sachs, said Britain faced several pressing issues such as high unemployment and weak economic growth.

‘But looking forward we think the UK is capable of holding its own and in fact moving ahead of some of the other developed economies,’ he said.

Goldman put Britain’s strong performance down to higher investment than in countries such as Germany and France.

It also said the economy would benefit from immigration which would boost the working age population. The upbeat predictions came as Britain struggles to recover from the worst financial crisis and recession since the Wall Street Crash of 1929 and the Great Depression of the 1930s.

The debt-fuelled boom and bust of the last Labour government has plunged Britain deep into the red and left households struggling to make ends meet.

Sir Mervyn King, Governor of the Bank of England, warned over the summer that the UK is only part of the way through ‘seven lean years’ after the banking crash.

Bank Governor Sir Mervyn King warned over the summer that the UK is only part of the way through ¿seven lean years¿

Bank Governor Sir Mervyn King warned over the summer that the UK is only part of the way through ‘seven lean years’


Investors saw £85billion of their capital wiped out in 2011 as the spectres of the eurozone crisis and a double-dip recession loomed over the markets.

A tumultuous year ended today with the FTSE 100 Index down nearly 6 per cent  – but investors may be thankful the decline was not worse.

During a panic sell-off in August, when politicians were staring into the abyss due to the European debt crisis, the top flight index was 19 per cent lower and below the 5000 mark. It closed today at 5572.3, down 327.7 points, or 5.6 per cent.

City experts have forecast more fluctuations in 2012 and with the future of the eurozone still uncertain few have made firm predictions for next year.

The near 6 per cent fall for the FTSE 100 Index is in stark contrast to the 9 per cent gain the previous year, while the FTSE 250 Index fell 13 per cent after an improvement of 24 per cent a year ago.

But the performance of the London market is stronger than both the German Dax, which lost about 15 per cent, and the Cac-40 in France which ended the year around 18 per cent lower.

Britain is the seventh biggest economy in the world having recently been pushed out of sixth place by Brazil.

The U.S. is No 1, followed by China, Japan, Germany and France.

By 2050, the UK will have fallen to
ninth, having been overtaken by Indonesia, Mexico, Russia and India, but
passing France and Germany, according to Goldman.

China will become the world’s biggest economy ahead of the U.S. in 2026, the report added.

But Mr Wilson said the citizens of
fast-growing countries such as Brazil, Russia, India and China –
collectively known as the BRICs – will still be markedly less well-off
than their Western counterparts. ‘The income levels are so far ahead in
the developed world that any sensible exercise leaves them likely to be
the richest for some time,’ he  said.

Research group IHS Global Insight
yesterday predicted economic growth of 0.3 per cent in Britain in 2012
and a slump of 0.7 per cent in the eurozone.

IHS chief European economist Howard
Archer said: ‘GDP is expected to contract sharply in Greece and Portugal
in 2012, while declines are also anticipated in several other
countries, notably including Italy, Spain and, to a lesser extent,
France. Meanwhile, Germany is seen achieving only marginal growth.

‘The year 2012 is clearly going to be
a very difficult one for the UK economy, with modest contraction likely
to occur in the early months.

‘We expect the economy to start growing gradually in the second half of 2012.’

Here’s what other readers have said. Why not add your thoughts,
or debate this issue live on our message boards.

The comments below have been moderated in advance.

Meanwhile in the real world,Cameroon, is giving away Billions in aid to countries financially better off then us,and the country is wasting Billions in green policies such as windmills that produce nothing,and many other liberal policies.
Get shot of the super rich metropolitan liberals like Cameroon,and Clegg,and put a statesman in power that puts Britain first,and its people first,and i might agree with some of this view.
Also stop paying benefits to every third worlder that arrives on our doorstep.

Anyone who claims to know how things will be in 40 years time is a complete fool. The sage says Britain will move from sixth to third in per capita GDP, overtaking Germany!!! Why? Because of more “investment” and “immigration”. I’m sure DM readers will be delighted by the prospect of more immigration. Yes total GDP is a function of population size, but GDP per capita is determined by productivity, something the British have always been weak at. And investment in what exactly? British industry is habitually guilty of underinvestment preferring financial engineering instead, that’s why there is so little of it left.

Do you believe at Goldman Sachs economists or other so called experts? ??????

I’m in my seventies and just can’t wait for the upturn!!!! ………….. in more ways than one!

Oh yes the ice age was supposed to be coming in the late 1970’s what happened to that?
– Euro for GB, Euro Land…………….Improved CO2 data from ice core samples.

Will we last that long?
– steve, uk………..No. Runaway global warming, resource depletion and peak oil will have destroyed the West by then.

In the year 2050, Europe would have long been one border less land mass. All inhabitants will then be speaking German, and paying for their groceries in mighty euros. The USE, as Europe is known then, is long going to be the worlds economic powerhouse by 2050. The UK and its inhabitants are all long accustomed to being governed by Berlin. In 2050, there aren’t any individual countries and/or governments with its own rules and/or languages in Europe. The whole lot will be the United States of Europe with its government based in Berlin and its financial heart in Frankfurt, including Goldman Sachs.

This is NOT good news. It means that Britain will be even more over-crowded than it is now, and you won’t be able to move without treading on someone’s toes and being sued!

Oh yes the ice age was supposed to be coming in the late 1970’s what happened to that?

well maybe ….but by then ‘British businesses’ will have (with government support) imported millions of Chinese workers on salaries of 5p an hour living in company goulags. Because if you think our economic position will be changing with modern businesses paying workers their true worth treating them with respect, in a mentally enriching environment then I think you must be on the ‘funny’ pills …..AGAIN .

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