"Britain is facing an unprecedented fall in its economic world ranking, according to a newly produced report by country risk specialists Business Monitor International (BMI). Ranked by GDP per capita, the UK is set to fall by nine places, from 12th place in 2007 to 21st in 2010".
And it gets worse:
- 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.
- Despite enjoying 11 years of strong growth between 1997 and 2007, the UK ran a budget deficit of 1.7% of GDP over this period, fuelling a fiscal time bomb. Faced with the financial burden of bailing out the banking sector and kick-starting the economy, the budget deficit will swell to an unsustainable 9.3% of GDP in 2009, and average 6.7% over the following four years.
- Property prices will see a cumulative fall of 41%, from peak to trough, and could take more than 10 years to recover to the levels of 2007. The impact of negative equity and declining asset values will further serve to depress consumer spending and economic growth.
Those leapfrogging us are the UAE, Austria, France, Japan, German, Canada, the US of A, Australia and Italy.
And just to wrap things up:
"The UK has also suffered a steep fall in BMI's short-term Political Risk Rating table, slipping 16 places since the start of 2008 to 31st place out of 150 ranked states. A key factor here is the government's diminishing policy credibility, which is seen to be endangering long-term fiscal sustainability. With the added uncertainty of parliamentary elections due by May 2010, the UK's political risk ranking could well dip lower over the next year.
Another area of concern examined by the report is the current state, and future prospects, of the British labour force. Continuing shortcomings in the education sector, combined with an array of damaging social and demographic trends, have weighed heavily on the UK's deteriorating Labour Force Quality index. Amongst a peer group of 20 developed and key emerging economies the UK is ranked 9th overall - below Canada, the US and Germany - and fares particularly badly on the health (10th) and social & Demographic (13th) indicators. Most worryingly, though, on the Future Opportunities component (which measures the potential for future improvement in the Labour Force Quality Index), the UK lies in 16th place".
More at the site linked, or the whole report for anyone who fancies forking out $130.