Britain is down, but not out
For a long time the UK was the fourth-largest economy in the world. I always thought that was pretty good, given our empire was long gone and that we aren’t a particularly big country. But now we’re slipping.
Last year we were number six (in GDP terms). That put us behind Germany and France and just ahead of Italy. Things haven’t exactly improved since. Our economy is 4.7% smaller than at the end of 2008. The only positive I can find in all this is that up to the third quarter of 2009 the cumulative fall in Italy’s GDP came to 5.9%. So at least we’ll still be ahead of them on the 2009 biggest-GDP list
The upshot, says Martin Wolf in the FT, is that the UK “is poorer than it thought it was”. On the Treasury’s current forecasts (which could well be nonsense), the economy won’t regain its 2008 size until 2012. Depressing stuff, particularly when you add it to last week’s revelations about our huge debt levels (“deficits unmatched in peacetime”, notes Wolf) and this week’s unemployment news. The most shocking statistic? One in five people of working age in Britain is “economically inactive”.
Clearly, we should be worried. Very worried. But I’m not sure we should be defeatist.
• Read the full editor’s letter here: Britain is down, but not out