Project Fear was wrong and UK economy will overtake France in 2020, say economists
PROJECT Fear was wrong about Brexit, an economic report concludes today as it reveals the UK will bounce back to overtake the French economy in 2020.
The World Economic League Table says that Britain has recovered from an initial economic blip after the vote to leave the European Union and now looks set to maintain its position in the rankings and even improve by 2020. However, the data, compiled by the Centre for Economics and Business Research (CEBR), also shows that India will leapfrog Britain and France to become the world’s fifth largest economy in dollar terms by 2018 as it grows at a faster rate.
The table tracks different economies around the world and projects forward 15 years. It shows that despite warnings of a “significant” effect on the UK’S fortunes after the decision to back Brexit, “fears were exaggerated”.
The CEBR also said there would be a significant impact in the previous economic forecast a year ago. However, correcting that prediction, the report states: “A year ago we feared that Brexit would have a significant transitional effect on the UK economy that would leave it behind the French economy for five years. It now looks as though our fears were exaggerated. The postbrexit fall in sterling meant that the UK economy was smaller in dollar terms while growth was impeded.
“But sterling has since recovered and with a transitional deal with the EU now in place the country seems likely to overtake France again as soon as 2020, driven by the UK’S particular blend of the tech sector and the creative sector which CEBR has called The Flat White Economy and by the probability of a fairly soft Brexit.” It came as a second report by the British Retail Consortium (BRC) warned that shoppers will lose out if the UK fails to hold on to global trade deals struck by the European Union.
Andrew Opie, director of food and sustainability at the BRC, said: “While securing a deal with the EU to enable tariff-free trade to continue remains the priority, the deals the EU has negotiated with countries around the world also contribute to the choice and affordability of goods that UK shoppers purchase every day.
“People need reassurance from Government that these deals will be transferred in time to ensure that UK consumers don’t lose out.”
Overall the CEBR report forecasted that the UK will fall from sixth place in 2017 to seventh in 2032 in the league table, overtaking France but being overtaken by India and Brazil as emerging economies grow stronger.