UK economy poised to outpace European counterparts over the next 15 years

The UK is expected to outpace its struggling European counterparts over the next 15 years, securing its place among the world’s largest economies, according to long-term forecasts from the Centre for Economics and Business Research (CEBR).

By 2039, Britain and France are projected to maintain their positions as the sixth and seventh largest global economies, respectively, while Germany, Italy, and Spain are expected to drop down the rankings.

This optimistic outlook comes as a potential boost for British Prime Minister Keir Starmer. Official data released earlier this week revealed no economic growth in the UK since his Labour government assumed power following the July general election. Survey data indicates a bleak final quarter, with challenges likely to persist into 2025.

Starmer has pinned his hopes on ambitious plans to deliver the fastest sustained growth in the G7. These include sweeping planning reforms, accelerating housebuilding, and ramping up public investment. However, the CEBR cautioned that significant hurdles will continue to hinder Britain’s economic performance.

“While the UK’s outlook is noticeably better than that of key European peers like France and Germany, both of which are expected to slip, this improvement reflects weaker forecasts for Eurozone economies rather than strong UK growth,” the CEBR noted.

The report predicts the UK will gradually close the gap with Germany, Europe’s largest economy, over the next 15 years. Currently, Germany’s economy is 31% larger than the UK’s, but this figure is expected to shrink to 20% by 2039. Similarly, Britain is projected to outperform France, with its economy being 25% larger in terms of output by the same year.

The CEBR warned that Labour’s proposed tax increases may slow short-term growth. However, the UK’s long-term growth rate is expected to reach 1.8%, providing a stable trajectory for the future.

The U.S. is forecasted to retain its position as the world’s largest economy, fending off competition from China. “While we expect China to eventually take the top spot, structural and demographic constraints suggest its reign as the global economic leader will be short-lived,” said Sam Miley, CEBR’s managing economist and forecasting lead.

On a per-capita basis, the UK is projected to climb one position to rank 21st globally by 2039, just behind Malta, Germany, and Sweden. Luxembourg is expected to remain the wealthiest country per capita, followed by Ireland and Switzerland.

While the UK faces challenges, its relative resilience compared to its European neighbors signals a modest yet steady path forward, reinforcing its position as a key global economic player.