UK economy set to outperform Europe over next 15 Years, CEBR reports

LONDON: Long-term projections indicate that the UK is set to outperform many of its struggling European counterparts over the next 15 years, helping it maintain its status as one of the world’s largest economies.

According to the Centre for Economics and Business Research (CEBR), the UK and France are projected to hold onto the sixth and seventh spots in the global economic rankings by 2039, while Germany, Italy, and Spain are expected to drop in standings, Bloomberg reported.

This encouraging outlook arrives as Prime Minister Keir Starmer faces official reports showing that the economy has not grown since his Labour government took office in July. Recent survey data suggests a bleak final quarter of the year, which may extend into 2025.

Starmer is optimistic that his strategies—including planning reforms, increased housebuilding, and heightened public investment—will yield strong, sustainable growth in the Group of Seven countries despite a difficult start for Labour. However, CEBR cautions that various challenges will likely continue to weigh on the British economy.

“While this forecast is significantly better relative to major European rivals such as France and Germany, whose positions are projected to decline, this reflects a less favourable outlook for Eurozone economies rather than an indication of robust UK growth,” noted CEBR.

CEBR anticipates that Britain will close the gap with Germany, which is currently Europe’s largest economy. By 2039, Germany is expected to be 20% larger than the UK, compared to the current 31% difference. Additionally, the UK is projected to surpass France, achieving 25% larger output by 2039.

Despite warnings from CEBR that Labour’s proposed tax increases may hinder short-term economic activity, they predict a longer-term growth rate of 1.8%.

The report also forecasts that the US will continue to be the world’s largest economy, successfully maintaining its position against competition from China. While CEBR acknowledges that China is likely to eventually take the lead, they suggest that its dominance will be short-lived due to structural and demographic challenges. As for per capita income, the UK is expected to rise one position to 21st place, just behind Malta, Germany, and Sweden. Luxembourg is predicted to remain the richest country per capita, followed by Ireland and Switzerland