Brexit: Britain to go from fifth largest economy to eighth
BREXIT will send Britain tumbling from fifth to eighth in the world's economic league table by the end of the next decade, a worrying new economic analysis has found.
Analysts at the Centre for Economic and Business Research (Cebr) found that the country's economic prospects will be damaged by Brexit's negative impact on the value of the pound.
Sterling has dropped 18 per cent against the US dollar and 10 per cent against the euro since Britain voted to leave the European Union on 23 June.
As a result, modelling by the Cebr suggests consumer spending - in recent history the major driver of Britain's economic growth - will be squeezed next year as the currency fall causes inflation to shoot up.
France is on course to leapfrog the UK to become the fifth largest economy as sterling's post-Brexit vote slump takes its toll on UK economic growth, the report states.
However, Britain is expected to catch up with the French in 2021 before overtaking them five years later. But it is not forecast to regain the levels seen in 2015.
Cebr president Douglas McWilliams said China remained on track to become the world's largest economy, while India would reach number three by 2024.
"Korea overtakes both the UK and France before 2030, as will Brazil. Indonesia reaches the top ten and the Philippines the top twenty by then also," he added.
Covering 188 countries the Cebr's World League Table forecasts that the UK will have the seventh largest economy between 2017 and 2025, before slipping back to eighth place in 2030.
The US is expected to hold on to to its place as the world's largest economy until China sweeps into the top spot in 2030.
World trade is expected to expand at a slower pace in the coming years as protectionist policies - driven largely by US President-elect Donald Trump - hold back growth, the Cebr said.
However, the "flat white economy", which combines the burgeoning creative and digital sectors, will continue to muster new growth avenues for nations such as the UK, Israel and Sweden.
Despite the Opec cartel's landmark decision to support oil prices by slashing supply, the Russian economy is still expected to take a hit from the lower-for-longer cost of Brent crude.
Russia is expected to drop back to 14th place in the league table by 2030 after climbing to 12th place next year, the report said.
Britain's economy is expected to grow by 0.4 per cent in the fourth quarter, down from 0.5 per cent in the previous three months, according to forecasts by the Bank of England.
The Bank predicted in November that inflation would jump close to 3 per cent in 2017, while the influential think-tank the National Institute of Economic and Social Research has said it could hit almost 4 per cent next year.
The Office for National Statistics revised up UK economic growth for the third quarter on Friday, with gross domestic product (GDP) expanding 0.6 per cent, up from a previous estimate of 0.5 per cent.