Long-term forecasts from the Centre for Economics and Business Research (CEBR) predict that Britain will outperform other major European economies in the next 15 years, allowing it to maintain its position among the world’s largest economies. By 2039, Britain is expected to remain in sixth place globally, ahead of France, while Germany, Italy, and Spain are anticipated to fall in the rankings.
This optimistic projection will likely be encouraging for British Prime Minister Keir Starmer, whose Labour government has faced economic stagnation since taking office in July. Despite recent disappointing data indicating a bleak final quarter spilling into 2025, Mr Starmer’s strategy to achieve rapid sustained growth in the G7 through planning reforms, housebuilding, and public investment is viewed as long-term positive.
CEBR’s analysis, however, suggests that the UK’s favorable outlook stems more from a relatively weaker performance expected from Eurozone economies than from robust UK growth. The UK is projected to close its economic gap with Germany, with Europe’s largest economy anticipated to be only 20% larger than Britain’s by 2039, down from the current 31%. Similarly, Britain’s economic output is expected to surpass France’s by 25%.
While Labour’s tax increases might temper short-term growth, CEBR forecasts a trend growth rate of 1.8% in the coming years. The United States is predicted to retain its status as the world’s largest economy, narrowly ahead of China. CEBR envisions China briefly taking the lead, though it will be constrained by structural and demographic challenges.
On a per-capita basis, Britain is expected to rise to 21st place globally, slightly behind Malta, Germany, and Sweden. Luxembourg, Ireland, and Switzerland are projected to remain at the top of the per-capita wealth ranking.
