UK to be eclipsed by Brazil and Russia
The UK could drop out of the world’s top 10 economies in the next five years, a new report claims.
Nations with greater access to natural resources are set to prosper between now and 2015, according to the Centre for Economics and Business research (cebr). It predicts that the economies of Brazil and Russia could takeover Britain's by 2012, while the growth of India and Canada is likely to accelerate over a longer period of time to rank them above the UK by 2015.
In 2005, the UK was ranked as the fourth largest economy in the world. Since then it has been overtaken by China, France and Italy and now ranks in seventh place.
Francis Klonowski, partner at Klonowski & Co independent financial advisers, takes the findings with a pinch of salt: "I’m not sure how much faith I put in the people making these predictions now, we have had so much doom and gloom and if it’s that bad, why weren’t they seeing it two years ago?"
Klonowski also warns investors against decreasing UK exposure and building more of their portfolio in the so-called Bric economies: "Not even knowing the internal workings of a country is a dangerous game to play.
"Diversification is the only thing that has served investors well in recent years, I wouldn’t invest in a country if I didn’t even know its investment structure."
Even the cebr concedes that the UK dropping out of the top 10 will not affect economic growth - or the day-to-day lives of most people. Chief executive Douglas McWilliams says the biggest difference would be felt through a loss in diplomatic standing and that British people would be forced to recognise that other nations were in the driving seat of international relations.
An acronym, which stands for Brazil, Russia, India and China; countries all deemed to be at a similar stage of advanced economic development. The term was coined in 2001 in a report written by Goldman Sachs director Jim O’Neill who speculated that, by 2050, these four economies would be wealthier than most of the current major G7 economic powers.