Bleak outlook for UK’s world ranking

A recent survey paints a bleak picture of the outlook for the UK’s economic world ranking. Produced by country risk specialists Business Monitor International (BMI), the report reveals that ranked by GDP per capita, the UK is set to fall by nine places from 12th place in 2007 to 21st in 2010. Measuring output per capita in US dollars, a key comparative economic indicator, BMI predicts that the UK will partially recover its world ranking to 17th by 2013. But the combination of falling output and a devalued currency suggests Britain will struggle to ever break back into the world’s top 12. The 60-page BMI report believes Britain will suffer a far deeper recession than either the UK Treasury or IMF predicts. GDP is forecast to contract by 3.5% in 2009, followed by a shallow 0.2% recovery in 2010. Unemployment will peak at 3.2 million next year, an 11.2% rate, with the financial services sector set to lose 570 000 jobs between 2008 and 2010. Sterling’s steep depreciation is seen as the principal factor behind Britain’s fall in the league tables; the pound will remain weak for the next three years, dragged down by recession, huge budget deficits, low interest rates and increasing political risk.