British economy overtakes French to go fourth in world

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The Independent Online

The British economy has passed a symbolic milestone, overtaking France to become the fourth biggest in the world behind the US, Japan and Germany last year.

The British economy has passed a symbolic milestone, overtaking France to become the fourth biggest in the world behind the US, Japan and Germany last year.

But the UK's upward mobility in the international league table could prove short-lived. Economists warned the move from fifth to fourth place was due mainly to the strong pound and booming growth, and could be reversed before long.

Official figures yesterday from Eurostat, the EU's statistics agency, showed Gross Domestic Product or national income in the UK climbed last year to 1.348 trillion euros (or £825.65bn at yesterday's exchange rate) from 1.253 trillion in 1998. This compared with French GDP of 1.347 trillion euros in 1999 and 1.297 trillion a year earlier.

It was the first time since 1970 that the UK's GDP has exceeded that of France. Germany remained Europe's biggest, with national output of 1.980 trillion in 1999. Although the figures make some adjustment for the unusual strength of the pound against the euro at present, the overvalued exchange rate goes a long way towards explaining why Britain pulled ahead of France.

"Everybody complains about the strong pound, but that is probably a lot of the explanation for the UK pulling ahead in the figures," said Ray Barrell, of the National Institute for Economic and Social Research.

"The British economy has been performing well over the past three years, but actually not that much better than the French," he added.

The UK is also further ahead in its economic cycle, and could slow down while growth across the Channel continues to accelerate.

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