Invezz.com - Britain’s economic trajectory shows signs of stagnation, according to new research from the Centre for Economics and Business Research (CEBR), which predicts that UK living standards will increasingly diverge from American levels over the next 15 years.
The analysis reveals that while British GDP per capita is expected to reach $86,141 (£68,800) by 2039, this figure will be closer to Guyana’s projected $78,695 than America’s $148,411, raising questions about Britain’s long-term economic competitiveness.
UK GDP per head growth is among the weakest
In the shorter term, the UK is set to maintain its current 22nd position globally for GDP per capita through 2029, moving up just one place by 2039.
The CEBR forecasts that Britain will experience among the weakest GDP per head growth rates in the G7 over the next five years.
CEBR economist Pushpin Singh warns these projections indicate Britain risks “falling behind in the global economic race.”
Singh notes that the UK’s economic performance increasingly resembles France rather than the United States, particularly in productivity and public spending.
UK welfare spending is still not as bad as France. But are we on the road there? I think so in terms of elevated welfare spending, tax receipts not being enough to make up for that welfare spending and other spending commitments such as the NHS and other civil service sector spending.
What is behind the UK’s underperformance?
The research points to several key factors behind Britain’s projected underperformance, including lagging productivity growth, especially within the civil service, and rising government debt as a share of GDP.
The findings also present potential challenges for Labour leader Sir Keir Starmer’s pledges to improve living standards.
A stark contrast emerges between the UK and the US in post-pandemic productivity performance.
While American productivity has been “off the charts” since COVID-19 according to Singh, Britain continues to struggle with productivity growth across multiple sectors.
The data suggests a growing divergence between Anglo-American economic models, with Britain’s trajectory more closely aligning with European welfare state approaches despite historically closer ties to American-style capitalism.
These projections raise significant questions about Britain’s future economic position and the policies needed to boost productivity and living standards to maintain competitiveness with other leading economies.