That is not why the last place in the quarterfinals of the World Cup will be played in Qatar, but France and England have seen their respective economies put to the test for several months. Faced with the war in Ukraine, the scarcity of many and rising energy prices, the two countries do not necessarily react in the same way or at least not in the same proportions. Therefore, BFM Business has taken a current snapshot of the two European economies to compare them on the basis of various benchmark indicators.
- GDP: UK advantage
First, there is a size difference between the wealth created by the two countries. In the third quarter, the UK posted a GDP of £590bn, or €650bn. On the French side, quarterly GDP reached almost 590,000 million euros.
- Growth: France advantage
When it comes to GDP growth, France is in a better position than the UK. According to OECD figures, the British economy is already in recession while its GDP has just reduced its growth for the fifth consecutive quarter and even falls by 0.2% in the third quarter of 2022. For its part, France has seen its increase. a little more and although it has slowed down again between the last two quarters, it is still positive, at 0.2%.
- Inflation: advantage France
The rise in prices is visible in almost every economy on the globe, but France can boast of suffering from it much less than some of its European neighbours, starting with the United Kingdom. Last October, the inflation rate in the English Channel exceeded the 11% annual mark according to the National Statistics Office, a level that had not been reached for more than forty years. At the same time, the price increase was lower by almost five points in France according to INSEE data. Inflation also held steady at 6.2% for a year in November in France.
- Currency: UK Advantage
The exchange rate is a direct confrontation between the two countries and has always been advantageous for the English since the introduction of the euro two decades ago. The pound sterling underwent a substantial devaluation at the end of September, almost on par with the dollar, due to the hostile reaction of the markets to the budget announcements of the then Prime Minister, Liz Truss, then newly elected. Since then, the situation has calmed down somewhat and the British currency maintains its advantage over the single currency with the following conversion rate today: 1 pound sterling is worth 1.16 euros.
- Government debt: UK advantage
In terms of public finances, the United Kingdom is also in a less critical situation than France. At the start of the school year, UK public debt was around £2.45bn at the start of the school year, slightly down from €2.85bn after conversion. Reduced to GDP, the public debt ratio was then only 98%, while France’s has already exceeded the symbolic threshold of 100%. In the second half of 2022, French public debt reached 2,917 million and corresponded to 113% of GDP according to INSEE. On the other hand, the trends are not the same between the respective debt ratios of the two countries, since France’s is declining where it is increasing on the other side of the Channel.
- The trade balance: UK advantage
Although the October figures for the British trade balance will be released on Monday, the two countries are in the same waters for this indicator. Last September, the French trade balance registered a deficit of 16.8 billion euros with a slight recovery of 500 million euros. On the other side of the Channel, the deficit amounted to 12.5 billion pounds sterling, or just over 14.5 billion euros, but with a monthly reduction of almost 5 billion euros.
- The poverty rate: advantage France
According to the Ministry of Labour, 22% of the population lives below the poverty line, that is, more than 14 million Britons. In France, 9.2 million people were considered poor in France in 2019, that is, a poverty rate of 14.6% according to INSEE.
- The unemployment rate: the UK advantage
If on taking the taux de chômage au sens du Bureau international du travail (BIT), it is largely more reliable au Royaume-Uni où il ne s’élève qu’à 3.7% au troisième quarter 2022 against 7.3% in France. The trend is fairly stagnant in France, while the decline has been continuous since the end of 2020 across the Channel.
Source: BFM TV
