UK can shake off Brexit aftermath - if it stays open to talent

PwC says UK can remain economic power if labour market stays open to skilled workers

Photograph: iStock

Photograph: iStock

 

Britain can shake off the aftermath of its exit from the European Union and remain one of the world’s 10 biggest economies if it stays amenable to talented foreigners, according to a forecast by consultancy PricewaterhouseCoopers.

Measured by purchasing power parity, the UK will fall only one place to 10th among its peers by 2050 - so long as it keeps its labour market open to skilled overseas workers and develops trade links with fast-growing emerging markets, the analysis shows. PwC didn’t say how that outlook would differ without those policies.

The analysis of 32 of the world’s biggest economies suggested Britain can be the fastest-growing in the Group of Seven during the next three decades, assuming it sustains a relatively large proportion of population of working age. The authors said that making forecasts on such a time horizon may seem “brave,” but is useful for long-term planning in areas such as pensions and health care.

“Our relatively positive long-term growth projection for the UK is due to favourable demographic factors and a relatively flexible economy by European standards,” John Hawksworth, chief economist at PwC, said in a statement. “However, developing successful trade and investment links with faster-growing emerging economies will be critical to achieving this, offsetting probable weaker trade links with the EU after Brexit. ”

PwC’s outlook shows the world economy will double in size by 2042, driven by emerging market and developing countries. By 2050, China will cement a lead that it already holds on a purchasing-power parity basis, with the US slipping to third place, behind India.

Bloomberg