According to new research by the Centre for Economics and Business Research, Britain’s economy is showing signs of stagnation. The study predicts that UK standards of living will diverge more from American levels in the next fifteen years.
This analysis shows that the British GDP per person is projected to be $86,141 by 2039 (PS68.800), but this number will come closer to Guyana’s $78,695 projection than America’s $148.411, which raises questions regarding Britain’s economic competitiveness in the long term.
The UK’s GDP growth per capita is one of the lowest in Europe
The UK will maintain its 22nd place in the world for GDP per person through 2029 and only move up one position by 2039.
CEBR predicts that Britain’s GDP growth per capita will be among the lowest in the G7 for the next five-year period.
CEBR’s Pushpin Singh, an economist at the CEBR, warns that these projections show Britain is “falling behind” in the race for global prosperity.
Singh argues that, in terms of productivity and spending on public services, the UK is more like France than America.
The UK’s welfare expenditure is not nearly as high as that of France. Are we getting closer? The answer is yes, I believe so. Tax receipts are not enough to cover welfare expenditure and there’s also other commitments like the NHS or other public sector spending.
Why is the UK underperforming?
Research points out several factors that are behind Britain’s underperformance. These include a lagging growth in productivity, particularly within the civil services, as well as an increasing government debt, expressed by GDP.
These findings could also pose a challenge to Labour Leader Sir Keir starmer’s promises of improving living standards.
The UK and US have a stark difference in their post-pandemic performance.
Singh says that while American productivity is “off-the-charts” since COVID-19, Britain’s productivity continues to be a problem in multiple sectors.
Data suggests that Anglo-American models of economics are diverging, and Britain is more aligned with European welfare states despite its historical ties with American capitalism.
The projections pose important questions regarding Britain’s economic future and what policies are needed to increase productivity and improve living standards in order to remain competitive with other major economies.
The post UK GDP per capita closer to Guyana by 2039 than US, CEBR warns economists may be updated as new developments unfold.
