[Loonerisav]

This is very bad news for my beloved UK.

http://www.thisislondon.co.uk/standa...nomies-2015.do

UK ‘to drop out of top 10 economies’ by 2015
Hugo Duncan
07.12.09

A leading City think tank today predicted that the UK will drop out of the world's top 10 economies by 2015.

The Centre for Economics and Business Research said Britain (CEBR), currently the seventh-largest economy in the world, will be overtaken by Brazil, Russia, India and Canada by the middle of the next decade. It said even Australia could pass Britain by 2020.

The grim warning came as Chancellor Alistair Darling put the finishing touches to the Pre-Budget Report (PBR) to be published on Wednesday.

Business leaders and economists urged the Chancellor not to raise taxes and cut spending too soon for fear of snuffing out the recovery and driving the UK back into recession.

The UK was the world's fourth-largest economy in 2005 but was overtaken by China in 2006, France in 2008 and Italy this year.

Douglas McWilliams, chief executive of the CEBR, said: “In a decade, the UK could have dropped from being number four in the world to being outside the top 10.”

The forecast will not make pleasant reading for the Chancellor ahead of the PBR. Darling will admit that borrowing this year will hit a record £180 billion, or more than 12% of gross domestic product, as tax receipts evaporate and spending soars.

He will also repeat Labour's pledge to halve the deficit between 2010-11 and 2013-14 through higher taxes and spending cuts. Among the tax increases being considered are a supertax on bankers' bonuses and a 60% to 70% rate of income tax on those earning over £500,000.

Darling will also outline some spending cuts, although he will resist publishing the full details until after the general election.

Richard Lambert, director general of the CBI, said the biggest concern of all was when the squeeze should get underway.

He said: “Start too soon and there would be a risk of snuffing out a still-fragile economic recovery. Leave it too late and the UK's borrowing costs would start to escalate, building even bigger trouble for the future.”

Writing in The Times, Lambert said tightening should start in 2011-12 and aim to get the budget back in balance by 2015-16.

“History shows that a fiscal correction geared to spending cuts rather than to tax increases is more likely to deliver debt reduction and support growth,” he said.

Professor David Blanchflower, a former member of the monetary policy committee at the Bank of England, also urged the Chancellor “to resist any temptation to start cutting public spending in 2010-11”.

In a letter to the Financial Times, Blanchflower and 11 other professors wrote: “Taking risks at this point while recovery is delicate would risk a return to recession.

“What progress has been made towards recovery in the UK and abroad has been, in some considerable part, due to decisions by governments to increase spending as a stimulus, to actively support employment and to accept higher deficits as an inevitable outcome of these measures.

“To reverse this policy just when it is having an effect would be mistaken.

“Reducing the deficit now through spending cuts would undermine the recovery and ultimately damage the public finances further.”

[brulpcoersero]

Yes the BRIC Nations may well surpass the UK economy.

Brazil, Russia, India and China are massive countries with vast populations.

As for the other countries that is debatable, although both Australia and Canada have far greater room for population expansion due to their massive size and far greater natural resources. However with respect to Australia cities such as Perth may not be sustainable due to water shortages, and the same applies to other parts of Australia. Whilst large parts of Canada suffer extreme weather conditions.

The BRIC Nations may even eventually overtake the US one day and the same think tank suggests that on present trends the Chinese could overtake the US by the 2020s. Whilst in the future we could be looking at a European Economy rather than a UK one and both the French and UK Seats on the UN Security council may well be replaced by a European one. Saying that Switzerland is not a top ten economy but in terms of wealth per citizen and standards of living it preforms very well.

It may well also herald the decline of the US as BRIC member nations replace old trusted US friends such as Britain on the UN Security Council and become ever more powerful.

[layevymed]

What is the reasoning behind the theory? The main reason the UK has fallen recently is because of change in exchange rates. Hence its falls behind France and Italy. The only way the other countries will overtake the UK is if they have massive growth. I believe India and Brazil will overtake the UK sooner or later. Russia I am not sure about. Suggesting Canada and Australia will overtake the UK is BS. Unless there is catastrophic decline in the UK or massive growth in the other two it is not happening anytime soon. Even the current crisis isn't bad enough to do that. The is no reason to believe the UK will crumble while France and Italy don't.

[Psymoussy]

I just realised the article is from the Evening Standard. I wouldn't put too much faith in it.

[Cheaperisdeeper]

I just realised the article is from the Evening Standard. I wouldn't put too much faith in it.

It's in a few papers, however I don't put much credence in think tanks they often get things very wrong.


As you have already mentioned Alonzo the current high strength of the Euro and exchange rates has affected Britain's position in relation to some European countries, whilst Canada and Australia are much bigger countries with far greater natural resources. However it's not that Britain is going to decline, it's a case of other countries such as the BRIC Nations are growing rapidly and some countries have vast natural resources
such as Russia, Canada and Australia.


Britain risks falling out of world's top 10 economies

Britain could lose its place as one of the world's top-ten economies in the next five years, as it's eclipsed by countries with more natural resources, a new report warns.

http://www.telegraph.co.uk/finance/economics/6750844/Britain-risks-falling-out-of-worlds-top-10-economies.html

By Amy Wilson
Published: 12:18PM GMT 07 Dec 2009

Britain was the world's fourth-largest economy in 2005, but was overtaken by China in 2006, France in 2008 and Italy in 2009, leaving the country in seventh position, according to a report by the Centre for Economics and Business Research.

The report said that the UK could drop to 11th place by 2015, if current economic and population growth and exchange rate trends continue.

Brazil and Russia could overtake the UK as soon as 2012, and India by 2015, the CEBR said. Canada's economy could also be bigger than Britain's that year, if demand for natural resources continues to increase, and Australia may surpass the UK by 2020.

CEBR chief executive Douglas McWilliams said dropping from the top ten won't affect economic growth or the day-to-day lives of most people, but could affect Britain's diplomatic power and mean it has to accept countries with different approaches to human rights and democracy will be in the driving seat in international relations. He questioned whether the UK will be able to keep its permanent seat on the UN Security Council if it drops out of the top ten.

"In the real world there is no league table, no relegation or promotion, no Sky TV payments to lose out on," Mr McWilliams said. "But whether we like it or not, we are going to have to be prepared to put up with economic, political and social decisions that are made internationally, not only in other countries but quite likely in countries which have very different approaches."

[zbckFNlW]

Do any of the papers actually explain why they think it will drop so drastically. I just don't understand where they think the big boost in Canada and Oz will come from or where the massive drop in the UK will come from. I can understand the BRIC economies however and they will surpass not only the UK but also Italy and France and perhaps Germany and Japan at some stage in the future.

[AccusaJalsBub]

It's in a few papers, however I don't put much credence in think tanks they often get things very wrong.

http://www.telegraph.co.uk/finance/economics/6750844/Britain-risks-falling-out-of-worlds-top-10-economies.html

As you have already mentioned Alonzo the current high strength of the Euro and exchange rates has affected Britain's position in relation to some European countries, whilst Canada and Australia are much bigger countries with far greater natural resources. However it's not that Britain is going to decline, it's a case of other countries such as the BRIC Nations are growing rapidly and some countries have vast natural resources such as Russia, Canada and Australia.

As you're aware, the populations of Canada and Australia are much than the UK's. However, as you note, they have a lot of natural resources. By contrast, a main driver of Britain's economy is financial services, and its world-wide market share in that segment will shrink dramatically.

[RalfDweflywex]

As you're aware, the populations of Canada and Australia are much than the UK's. However, as you note, they have a lot of natural resources. By contrast, a main driver of Britain's economy is financial services, and its world-wide market share in that segment will shrink dramatically.

The financial sector in the UK accounts for less than 10% of GDP, and doesn't just include banking, it also includes areas such as insurance and commodity trading. Furthermore the vast majority of banks in the city are foreign owned. UK industries such as Pharma and biotechs, IT, Defence Manufacturing, Aviation, Construction, Electronics and the Business Service sector are all strong, whilst service industries such as tourism and entertainment, and the education and knowlege sector are also very strong UK Industries. There is also no reason to believe that the UK Financial Centre is going to shrink dramaticaly, London is a world leader in professionalism in this field and has been a respected centre for many hundreds of years.

British Companies such as Glaxo SmithKline, British Airways, BAe, HSBC, Vodafone Group, TESCO etc to name but a few are some of the most respected and dominant companies in their fields. Vodafone even own a large slice of US Telecommunications company Verizon.

[nTDsD0aU]

10% is a lot.

Sadly, the EU (and Britain together with Greece, Spain and Italy) has a very difficult road ahead. It seems that France and Germany are the only major EU countries with a brighter future.

[FYvWldC0]

10% is a lot.

Sadly, the EU (and Britain together with Greece, Spain and Italy) has a very difficult road ahead. It seems that France and Germany are the only major EU countries with a brighter future.

On what basis, do you have anything to back up this assertion, indeed Italy's economy is doing very well

90% of the economy that is not finance related, yes it is a lot however Britain has a bright outlook in terms of it's financial sector, just because a few hedge funds may leave the EU and the French President has come out with some rubbish does not autmotaically mean the end of the financial sector in the UK.

Who knows what the future holds, however what is true is that two of the greatest cities in the world, London and Pais are now within easy reach of each other, and who knows in the future these two cities may even be linked by maglev.

[Assauraarguck]

^ Correct me if I'm wrong here, but the EU is a huge economic block with a combined GDP that is greater than any one else. It is on the same land mass that connects to the East and runs straight through to the Pacific. How all of this develops and what alliances will be made is any one's guess. But the EU is still a manufacturing and technological power house. It also now has the world strongest currency.

[Romarionsion]

The EU has a very aging population and a lot of benefits that it owes them.

Every publication that I've read (including the Economist and the FT) predicts dire times ahead for the EU.

Also, the EU is not a country. It's an economic block composed of members with competing self-interests (as the latest Barnier fiasco demonstrates). Another example is that the UK and France won't give up their security council seats in favor of an EU seat.

Also, unlike the US, it does not issue EU bonds because stable countries, like Germany, don't want to underwrite risk for weaker ones, like Greece. If and when an EU country defaults on its debt, which will become a real possibility as more eastern European countries enter the EU (let alone Greece), will Germany and France bail it out? I doubt it.

Lastly, while I would not have expected China's meteoric rise to have been a zero-sum game for the rest of the world, it appears that Europe is being marginalized at China's expense.

[Xodvbooj]

The EU has a very aging population and a lot of benefits that it owes them.

Every publication that I've read (including the Economist and the FT) predicts dire times ahead for the EU.

Also, the EU is not a country. It's an economic block composed of members with competing self-interests (as the latest Barnier fiasco demonstrates). Another example is that the UK and France won't give up their security council seats in favor of an EU seat.

Also, unlike the US, it does not issue EU bonds because stable countries, like Germany, don't want to underwrite risk for weaker ones, like Greece. If and when an EU country defaults on its debt, which will become a real possibility as more eastern European countries enter the EU (let alone Greece), will Germany and France bail it out? I doubt it.

Lastly, while I would not have expected China's meteoric rise to have been a zero-sum game for the rest of the world, it appears that Europe is being marginalized at China's expense.

The US may also being marginalised as the world looks Eastward rather than Westward , as for birth rates, Britain and Ireland have amongst the highest birth rates in Europe, the Germans having amongst the lowest birth rates in Europe. The UK has also seen mass immigration from Eastern Europe with millions of Polish, Romanians, Russians and others coming to the UK and particuarlty London. It is projected that the UK population will rise significantly in the future rather than fall, with cities such as London being the main beneficiaries.

http://www.guardian.co.uk/society/20...-rate-increase

http://www.independent.co.uk/news/uk...se-419879.html

http://www.london.gov.uk/view_press_...?releaseid=973


The population of London is expected to increase by almost 20 per cent over the next two decades. The total will have grown by more than a million, to about 8.8 million, by 2029.

In terms of Bonds, they may well be part of the EU's future plans.

http://www.euractiv.com/en/financial...article-179536

[CAxrrAYN]

LL.... good points. But you know how I see it? (this will make you laugh but here goes...) In the coming decades the EU will continue spreading Eastward uniting with Russia and then decades later with China.

[nitivearchit]

I wish it were not so because I prefer Europe to the US, but I tend to agree with the international consensus of economists that Europe is in decline.

Even its stated interest for an influential voice in world affairs took a back seat to national interest when Van Rumpey was designated to be the EU president. It was reported widely that Merkel and Sarko did not want to lose their influence and therefore supported the appointmeny of a light weight.

[infarrelisam]

I wish it were not so because I prefer Europe to the US, but I tend to agree with the international consensus of economists that Europe is in decline.

Even its stated interest for an influential voice in world affairs took a back seat to national interest when Van Rumpey was designated to be the EU president. It was reported widely that Merkel and Sarko did not want to lose their influence and therefore supported the appointmeny of a light weight.

The future of the EU is far from clear at the moment, the EU has a large population of 500 million but there is still the possibility of further expansion, with the issue of whether Turkey should be allowed to join still unclear, whilst there is the possibility that Russia may also try to join eventually.

Birth rates are also prone to fluctuation, and the European birth rate may yet pick up again.

[Darnisg]

US birth rate is 0.3% higher than the EU. Both have high immigration. Therefore the EU is no more in decline than the US is. I only see a more distributed global wealth in the future. Asia will grow but I don't believe the EU or US will see major decline. Asia still has a very long way to go before they match western living standards and stop emigration.

[Zesavenue]

Every article that I have read in respected publications disputes your points. The US is expected to have considerably higher population growth than the EU. Most major EU countries expect population declines. The US, by contrast, will continue to have very strong population growth. Here's an article from an Evening Standard-caliber paper, the USA Today, which states that the US will hit 400m in roughly 30 years. (i.e., a 33% increase).

http://www.usatoday.com/news/nation/...pulation_x.htm

[averkif]

Eurobabble.

[Sliliashdes]

The stats I have looked at are from the CIA factbook. They have the US at around 14 births per 1000 and the EU from another source is at around 11 (same as the UK). Population is a very hard thing to estimate. Most sources seem to moronically just extrapolate the current trend. The UK is also estimated to have a population of 70m and sometimes more in the near future.