France overtakes Britain as world’s fifth largest economy as Brexit fears hit markets

Pound falls against the euro, putting France ahead of Britain for first time since 2014

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The Independent Online

France has overtaken Britain to take fifth place on the list of the world’s largest economies after the pound slumped to a fresh 31-year low following last month’s Brexit vote.

The pound has fallen by about 14 per cent against the dollar since it hit $1.50 ahead of the referendum result, and has fallen 0.9 per cent against the euro to €1.1656 on Wednesday.

The fall against the euro – to the lowest level since 2013 – puts the value of France’s gross domestic product for 2015 slightly ahead of Britain’s according to one measure.

GDP is normally calculated over a year using average exchange rates, but if the rate for Wednesday is used France’s official GDP of 2.182 trillion euros would surpass Britain’s 2.172 trillion euros, Reuters reported.

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The UK has been the world’s fifth largest economy since 2014. France has previously held the title of the world’s fifth largest economy, losing it to the UK in 1997, as the UK boomed, but regaining it in 2008 as the global economic crisis hit Britain hard. 

As the economic implications of the Brexit vote take hold, shares in UK companies took a hammering in trading on Wednesday.

Shares in supermarkets Tesco and Morrisons tumbled by more than 7 per cent, and property stocks continued to slide after several major commercial property companies suspended trading in the UK due to investors pulling funds due to uncertainty following the referendum result.