The World Economic Forum has warned against the stability of the global economic recovery as the UK rises up the list of the most competitive economies as part of the organisation’s Global Competitiveness report.
The paper, which ranks economies based on 12 factors such as labour market efficiency, technology, infrastructure and education and training, listed the UK in ninth place up from tenth position in the previous report.
Lower levels of fiscal deficit and public debt have improved the UK’s performance, according to the WEF, as well an “efficient” labour market, technology and business innovation.
Recent difficulties in the country’s banking system and lack of access to loans remain “the most problematic factor” for doing business in the country, the report adds.
Switzerland continues to sit at the top of the WEF’s list for the sixth consecutive year thanks in part to its research and development spending and a macroeconomic environment that is “amongst the most stable in the world.”
The US also rose up the rankings to regain third position following improvements in a number of areas in the country’s economy including innovation, business sophistication and a flexible labour market.
However the WEF also cautions that while the global economy is recovering from the scars of the financial crisis this recovery could be jeopardised by risks from monetary policy, income inequalities and geopolitical risks “looming on the horizon.”
It says: “The global economy seems to be finally leaving behind the worst and longest- lasting financial and economic crisis of the last 80 years. However, this resurgence is moving at a less decisive pace than it has after previous downturns, and heightened risks looming on the horizon could derail the global recovery.
“Much of the growth in recent years has taken place because of the extraordinary and bold monetary policies in countries such as the United States, Japan, and the United Kingdom. As the economy improves in these countries, a normalization of monetary policy with tightening financial conditions could have an impact on both advanced and emerging economies.
“Moreover, the strained geopolitical scenarios with rising tensions in a number of regions can also have negative consequences for the global economic outlook.”