By most standards, Britain is a rich country. But it behaves as if it is wealthier, faster-growing and more influential than it actually is.Take chancellor Rachel Reeves’ visit to the World Bank-IMF spring meetings earlier this month. She called on other nations to follow the UK’s lead in containing energy costs and touted the country as a “safe harbour economy” to woo war-weary expats from the Gulf. The ambition was laudable, but detached from reality.
As she arrived in Washington, the IMF cut Britain’s growth forecasts for 2026 by more than any other G7 nation, partly because of the country’s exposure to the oil and gas shock triggered by the Iran conflict. (Britain has among the highest industrial electricity prices in the developed world.) And, despite the war, hopes of a large-scale return of professionals from places such as Dubai are dim given the UK’s uncompetitive tax rates.
This isn’t the first time UK leaders have overstated the country’s abilities. Wherever one stands on the EU referendum, executing Brexit — the nation’s largest bureaucratic undertaking since the second world war — always seemed too big a challenge for the UK’s policymaking apparatus. And the broader notion that Britain could easily carve out winning trade deals outside the bloc overestimated the country’s economic leverage.