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A fall in the value of the pound, combined with slower growth this year and next as Brexit takes its toll, will mean the UK drops from fifth in the GDP rankings to sit just above Italy in eighth place and Brazil in ninth.
The firm said its annual analysis of global trends showed that India’s elevation to fifth place was likely to be permanent as the country of 1.3 billion people maintains a growth rate of 7.6% over the next five to six years.
France will benefit in the short term from the rising value of the euro against the pound. However, it is expected to fall behind the UK again in subsequent years as its GDP growth begins to wane.
Mike Jakeman, a senior economist at PwC, said: “India is the fastest growing large economy in the world, with an enormous population, favourable demographics and high catch-up potential due to low initial GDP per head. It is all but certain to continue to rise in the global GDP league table in the coming decades.
“The UK and France have regularly alternated in having the larger economy, but subdued growth in the UK in 2018 and again in 2019 is likely to tip the balance in France’s favour. The relative strength of the euro against the pound is an important factor here.”
PwC has forecast Britain’s economy to grow by 1.6% next year and 1.7% in 2020 before rising to 1.8% in the five years to 2025 as the uncertainty surrounding Brexit recedes. [...]