The UK appears to have officially lost its coveted spot on the list of the world’s five largest economies.
During Wednesday’s Budget, Philip Hammond, in a series of statements aimed at highlighting the strength and health of the British economy, admitted that the country has slipped to sixth spot, trailing France.
The other four countries that make up the leaderboard are the US, China, Japan and Germany.
“London is the number one international financial services centre. We have some of the world’s best companies. And a commanding position in a raft of tech and digital industries that will form the backbone of the global economy of the future. Those who underestimate Britain, do so at their peril,” the Chancellor said.
But he also admitted, “Britain is the world’s sixth largest economy”.
There are several ways of measuring the size of an economy. According to data from the World Bank, ranked by gross domestic product for 2016, the UK still easily outpaced France with a GDP of $2.618 trillion. But according to IMF forecasts for 2017, France has leap-frogged the UK.
Separately on Wednesday, the Treasury’s official forecasting dramatically slashed its growth predictions for this year and next for the UK, delivering its worst forecast for economic expansion for the country in its history.
The Office for Budget Responsibility said that it now sees the economy growing by just 1.5 per cent this year and 1.4 per cent next, down from a previous estimate of 2 per cent and 1.6 per cent, respectively.
Back in March, the OBR had said that it expected the economy to grow by 7.5 per cent in the five years coming years. It now expects that figure to be just 5.7 per cent over that period.
Productivity has been an Achilles heel of the UK’s economy since the financial crisis, and on Wednesday the OBR said that while it expects productivity growth to pick up “a little” in future, it will “remain significantly lower than its pre-crisis trend rate throughout the next five years”.
Earlier this year, the professional services firm PwC said that the UK could be down to 10th place in the list of the world’s biggest economies by 2050.