The UK is the seventh most competitive economy in the world
The UK has surged to seventh place in a highly-influential ranking of the world’s most competitive economies.
The World Economic Forum (WEF) said the UK had overtaken Hong Kong, Japan and Finland to climb three places in this year’s global competitiveness index, more than reversing last year’s embarrassing fall to 10th place.
The WEF hailed the UK’s strong digital landscape, world-leading institutions and infrastructure, along with its business-friendly regulation and strong connections to the international economy as powering the UK’s climb up the rankings.
The scores are an amalgam of 114 individual measures the WEF believes contributes to the competitiveness of an economy. These range from the macroeconomic environment, education systems and healthcare to business regulation, employment systems and technological penetration.
Read more: The first three months of Brexit in the financial markets
Switzerland maintained its place at the top of the rankings, with Singapore and the United States completing the top three. The Netherlands, Germany and Sweden were the only other European economies to rank as more competitive than the UK.
The WEF found the UK had the third most “technologically ready” economy in the world, with new technologies widely available, and some of the best internet coverage on the planet. The UK also has the second best management schools in the world, the second-most advanced advertising industry, strong intellectual property rights and scored top for foreign ownership of companies.
Chancellor Philip Hammond said the results “demonstrate our ability to sharpen our edge and improve our competitiveness.”
He added: “This government will build on that progress, as we demonstrate to the world that Britain continues to be highly competitive and open for business.”
However, the heavy exposure of the UK to the rest of the world poses both opportunities and risks.
High government indebtedness and our heavy reliance on imports – the so-called twin current and budget deficits – for instance, were a drag on the UK’s overall score.
Addressing the result of the EU referendum, the WEF said: “Although the process and the conditions of Brexit are still unknown, it is likely to have a negative impact on the UK’s competitiveness.”
Read more: Is the UK economy now smaller than France's?
Should the UK be able to navigate the Brexit uncertainty, the WEF said the government could offset any negative fallout by implementing “regulatory changes” in order to make the UK even more competitive on the world stage.