Twats in search of some press copy. How else to explain this?

The Centre for Economics and Business Research (CEBR) says Britain, which was the world’s fourth largest economy as recently as 2005, has slipped to seventh this year behind America, China, Japan, Germany, France and Italy.

By 2015, it predicts, Britain will be outside the world’s top 10, behind Russia, Brazil, India and Canada. Slow growth and a weak pound will be responsible for the slide.

Sigh, come along now. We don\’t measure relative sizes of economies using market exchange rates. We do it using PPP exchange rates.

Bit pissed off we hadn\’t been in the papers for a few days were we?

4 thoughts on “CEBR”

  1. Edouard (London Expat)

    Tim – who said the study did not use PPP?

    Also, a growing share of the “consumer basket” of consists of services traded globally rather produced locally (think tourism, education, entertainment, etc.) . That makes the old notion of PPP a little less relevant than historically.

    Tim adds: “who said the study did not use PPP?”

    Well, if they’re saying that changes in market exchange rates are driving the change then they must be using market not PPP, mustn’t they?

  2. As one of my pet subjects, I mostly agree, although it’s true to say we use PPP to compare living standards, it’s not so obviously correct for comparing the size of an economy.

  3. Also – Canada – that’ll require a 60% mix between sterling falling and Canadian GDP growth outstripping us. Don’t see it.

  4. Perhaps they meant that the pound being worth 0.2 euros in a few years time might cramp our credibility as a sound financial centre, which was the only thing we had to offer to the world.

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