World Economic Forum drops UK a place in competitiveness rankings

I always take the annual rankings of international competitiveness with a pinch of salt. There are plenty around - the latest has just been published by the World Economic Forum - all of which have a different methodology and emphasis. That said they do offer some interesting and useful insights on the current state of health of any particular country and also some of the underlying strengths and weaknesses especially on the supply-side.

The World Economic Forum places the UK as the 13th most competitive economy in the world in the new rankings - down four places from the 2007-08 table.

According to the WEF our main strengths are: An efficient of labour market (ranked 8th globally) We are ranked 8th on the technological readiness pillar. *The country continues to have “sophisticated and innovative businesses, characteristics that are important for spurring productivity enhancements.”

But the fragile nature of our financial system is the Achilles heel this year

“The drop in rank is largely attributable to a weakening of the assessment of the country’s financial market, which has slipped from 5th to 24th place since last year, based on rising concerns in the business sector about the soundness of banks (126th) on the back of several banking-sector bankruptcies and bailouts. In this context it is not surprising that a significant and growing weakness remains the United Kingdom’s macroeconomic instability (71st, down 13 places since last year), with low national savings, an exploding public-sector deficit (related in large part to recent efforts to bail out the financial sector), and consequential public indebtedness”

More detail here