Inflation worries harm UK's competitiveness
Britain has slid down a table of global competitiveness released today because of concerns over the state of its economy.
The UK fell from 11th place to 15th in a survey of more than 100 countries in the latest Global Competitiveness Report by the World Economic Forum.
The WEF said Britain had slipped because of relatively high levels of inflation and government debt compared with its rivals. But it stressed that the UK was a "steady performer" and was still a good place to business.
The survey attempts to quantify the impact of a number of factors that contribute to create conditions for sustained growth, with a particular focus on the macroeconomic environment, the quality of a country's institutions, and the state of its IT and general infrastructure.
The size of the public sector deficit, which is forecast to hit £27bn this year, puts the UK at number 31 out of 102. On inflation, which recently hit 3 per cent, the UK is ranked 32nd.
Augusto Lopez-Claros, the WEF's chief economist, said this was "surprising" but added it was based on a simple ranking and did not take into account any background explanation.
"One does not think of the UK as being a problem country but the fact is that inflation has come down faster across the rest of the word," he said.
The UK came out well in terms of efficiency in government services and in the reputation of public officials as being beyond corruption.
Mr Lopez-Claros warned that the higher up the table a country came, the more that a fractional move could have a large impact on the rankings.
"I would describe the UK as a steady, reliable performer where businesses can do business, the institutions work and where the courts are not for sale," he said.
He contrasted it with Israel, which came close to the UK at 20th place. He said the macroeconomic situation was poor because of the internal strife but it boasted an IT sector that outperformed most European countries.
Finland was the most competitive economy in the world followed by the United States.
It said that the US's "commanding" position in IT was offset by some weakening in the quality of its public institutions and macroeconomic environment, particularly public finances where it ranks 50 out of 102.
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