Britain is relying too heavily on European and North American markets, which will lead to gradual economic decline over next 50 years, a leading consultancy group has warned.
According to a new report by PricewatershouseCoopers (PwC), the UK’s over-reliance on European and North American markets will cause the British economy to decline, unless businesses can break into the faster growth markets of Asia and Latin America.
The prime minister David Cameron led a trade mission to China in November last year in a bid to boost trade between Britain and China, which is rapidly becoming a leading global economy.
John Hawksworth, PwC's chief economist, told The Guardian that there is little evidence that such missions have been successful, despite the fact that the leading emerging eastern economies are now growing at least three times faster than the US and leading European nations.
Hawksworth said: "Rapid growth in consumer markets in the major emerging economies, associated with a fast-growing middle class, will provide great new opportunities for western companies that can establish themselves in these markets.
"If the UK is not to be playing in the slow lane of history for the next 40 years, then it needs to find a way to break into these fast-growing emerging markets on a much larger scale than achieved so far.”
PwC has predicted that economic power will shift further from the west to the east, with growth rates in the UK and other developed economies falling behind those of the leading developing nations. Britain is expected to grow by 2.3% a year between now and 2050, compared with 5.9% in China and 8.1% in India. The country expected to report the highest growth is Vietnam at 8.8%.
© Crimson Business Ltd. 2011