UK to lose place as 6th biggest economy
At the moment Britain is clinging onto the title of sixth biggest economy in the world.
However, a new report says it is just about to lose out to one of the fastest-growing new economies in the world. So who is this flourishing giant, and can we learn the secrets of new wealth from them?
Brazil on the riseAccording to the Economic Intelligence Unit, in 2011 Brazil will overtake Britain and become the sixth biggest economy in the world. Its GDP for the year will be $2.44 trillion, compared to the UK's $2.43 trillion.
It represents a huge surge up the rankings in a short space of time for Brazil. Last year it overtook Italy to be the seventh biggest economy with growth of 7.5%.
After beating Britain to take sixth place it is expected to overwhelm France and Germany by 2020 to become bigger than any economy in Europe. It's not entirely immune to the global slowdown, and the central bankers think growth will be just 3.5% this year. However, compared to growth rates of less than 1% elsewhere, it will still move up the rankings.
By that stage the top economies in the world will be:
What can the UK learn from Brazil?In some ways this is a product of where the economy is in its development. Demand is booming as the domestic population gets more wealthy and they consume more. Credit is more easily available, property prices are increasing and employment is high. It's a virtuous circle that every economy enjoys in its boom years. This is a massive economy, so its boom is equally massive.
In the UK we have already been through our growth stage. We're seeing what life is like on the other side, when someone somewhere else can make things faster and more cheaply than we can, when we have borrowed so much we cannot handle the debt, and where property prices have got completely out of hand.
Meanwhile, the rich resources of the country are something our small island could never compete with. We have never had the resources to be a major power - we just used to colonise parts of the world that could extract them for us.
The only thing we could stand to learn is that there are no easy answers. The solution to Britain's malaise doesn't lie in manipulating credit and encouraging borrowing. It doesn't lie in the growth of an industry designed to push money around. We need to make things, to build things, to innovate, create and grow. And until we grasp this particular nettle, we can look forward to a future of watching the UK slip down the GDP rankings with a sense that we have no-one to blame but ourselves.