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UK economy leapfrogs France, new study claims

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UK economy leapfrogs France, new study claims
Ouch. France overtaken by the UK as the world's 5th economic power. Photo: Oli Bac/Flickr
10:13 CEST+02:00
There was more bad news for France on the economic front on Wednesday as another study claimed that the British economy was currently in the process of overtaking the French as Europe's second largest.

While the jury is still out, the evidence is growing to suggest the UK economy is currently in the process of overtaking France’s.

The latest think tank to produce a study with that conclusion is the UK’s National Institute of Economic and Social Research (NIESR), which believes France will grow at just 1.3 percent this year compared to the UK’s growth rate of 2.5 percent.

Simon Kirby, principle research fellow at NIESR, said Britain was expected to overtake France both in terms of purchasing power parity (PPP) - which adjusts for living costs - and at market exchange rates.

“When you compare the two economies, it’s really been a story over the past few years of a relatively subdued domestic economy in France, with a lacklustre housing market, consistent falls in housing investment and most of all subdued consumer spending,” said Mr Kirby.

“An elevated unemployment rate of 10pc, as well as general uncertainty within the monetary union has also been an important factor.”

The study is not the first to show a symbolic shift in Europe’s economic league table. In January, figures from the European Commission’s website revealed that France’s GDP was less than the UK's over 2014.

Newspaper Le Figaro reported that France's GDP, that is, the wealth created by the country, was estimated at €2,134 billion, while the UK’s was quoted as €2,232 billion.

Christophe Blot from the French Economic Observatory in Paris said at the time that such league tables were of little importance.
 
"It’s not really a surprise that the UK is above France given the problems the French economy has faced, such as record unemployment and a lack of growth," he told The Local.
 
"Of course the data will be used by politicians and the French bashers and it is a blow to morale but it doesn’t really matter. We are all aware of the problems in France over the last few years but the question is how can we boost growth in the French economy? That’s all that matters.”
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