Happy Talk

Business Monitor International want $130 for a report which tell us:

"Britain is facing an unprecedented fall in its economic world ranking.... Ranked by GDP per capita, the UK is set to fall by nine places, from 12th place in 2007 to 21st in 2010. Measuring output per capita in US dollars, a key comparative economic indicator, .... the UK will partially recover its world ranking to 17th by 2013. But the combination of falling output and a devalued currency suggests Britain will struggle to ever break back into the world’s top 12....

* Britain will suffer a far deeper recession than either the UK Treasury or IMF predicts. GDP is forecast to contract by 3.5% in 2009, followed by a shallow 0.2% recovery in 2010. Unemployment will peak at 3.2 million next year, an 11.2% rate, with the financial services sector set to lose 570,000 jobs between 2008 and 2010.
* Sterling’s steep depreciation is the principal factor behind Britain’s fall in the league tables; the pound will remain weak for the next three years, dragged down by recession, huge budget deficits, low interest rates and increasing political risk.
* Despite enjoying 11 years of strong growth between 1997 and 2007, the UK ran a budget deficit of 1.7% of GDP over this period, fuelling a fiscal time bomb. Faced with the financial burden of bailing out the banking sector and kick-starting the economy, the budget deficit will swell to an unsustainable 9.3% of GDP in 2009, and average 6.7% over the following four years.
* Property prices will see a cumulative fall of 41%, from peak to trough, and could take more than 10 years to recover to the levels of 2007. The impact of negative equity and declining asset values will further serve to depress consumer spending and economic growth. In terms of recovery, BMI points out that the UK (still the world’s sixth largest manufacturer) is well placed to benefit from the changing terms of trade triggered by the slide in sterling (much as it did following its exit from the ERM in 1992).

.... Another area of concern ..... is the current state, and future prospects, of the British labour force. Continuing shortcomings in the education sector, combined with an array of damaging social and demographic trends, have weighed heavily on the UK’s deteriorating Labour Force Quality index. Amongst a peer group of 20 developed and key emerging economies the UK is ranked 9th overall .... Most worryingly, though, on the Future Opportunities component (which measures the potential for future improvement in the Labour Force Quality Index), the UK lies in 16th place."

Via JKA

Actually, I tend to agree with Chris Dillow about the perils of economic forecasting so I'm not automatically claiming this is the inevitable future. I don't think Britain is going to collapse into anarchy: I just suspect we are about 30-50% along a lengthy historic arc of a national decline akin to that experienced by Spain between 1700 and the mid 20th century. A once imperial, world shaping power in retreat.

No one wants their children to have a worse standard of living than they themselves have experienced. But I could have told you that for a lot less than $130.