UK Economic Competitiveness Flagging

The UK has slipped from 19th in the world ranking of GDP Per capita PPP (purchasing power parity) in 2004 to 28th in 2006. Data source CIA, The World Factbook

GDP per capita gives an indication of the nation’s wealth per person. Though the absolute value has risen from $29,600 in 2004 to $31,800 in 2006, this increase is rather marginal when inflation is applied to the figures. The slipping in the world rankings means that other nations have increased their wealth per person at a faster rate than the UK.

There a many factors that can account for this, such as the cost of new regulation, however in the UK we have seen a recent acceleration in the growth of the population.
Figures released in November 2006 revealed population growth of more than 300,000 for the second successive year, and statistics issued by the Home Office on 22 August 2006 showing that 447,000 people from the EU accession states registered to work in the UK from May 2004 to June 2006. Including self-employed workers, total immigration from these eight countries was an estimated 600,000. (Opitium Popluation Trust)

Such evidence of the UK’s flagging competitiveness would seem to be contrary to the assertion that the recent immigration is unequivocally beneficial to the UK economy. If growth in GDP is only just ahead of the rate of increase in the population, in effect there is less growth in wealth per person than expected and therefore a reduced growth in money to spend on public services per person than expected. Though the total GDP may be higher we may not be as well off per person as perhaps we might be, or thought we were going to be.