BRITAIN’S economy is set to trail behind key EU competitor countries over the next 15 years, with its growth outstripped by the Irish Republic, Spain, France and Portugal, startling new projections suggest.

In a blow to Gordon Brown’s hopes to raise Britain’s performance in the global race for prosperity, the long-range forecasts from Deutsche Bank indicate that the UK may fall further behind its rivals in the league of global living standards by 2020.

Britain’s annual growth between 2006 and the end of the next decade is set to average only 1.9 per cent, according to the long-term projections. This would leave the UK lagging behind the US with average growth of 3.1 per cent, Spain (2.8 per cent) and France (2.3 per cent).

In a league of 32 nations, Britain’s forecast growth performance places it in 21st place. Over 15 years, one result would be that Spain’s standard of living, measured by national income per head, would leapfrog the UK’s.

By 2020 Britain’s GDP per head is expected to put it 19th in Deutsche’s ranking of global living standards, with Spain in 17th place. The US takes first place, with GDP per head almost twice that projected for Britain, with Ireland not far behind America.

Long-term forecasting is notoriously hard and so Deutsche’s figures will be controversial. However, the bank says they are based on a sophisticated model using key factors that drive growth: population trends, investment levels, workforce skills and nations’ openness to trade.

Globally it shows India as the fastest-growing economy up to 2020, with Malaysia pipping China for second place. Slowing population growth in China is expected to just prevent it eclipsing the US as the world’s largest economy by 2020. By then, Britain is forecast to be the seventh-largest world economy, behind the US, China, Japan, India, Germany and France.

The relatively strong predicted long-run performance by some EU countries came despite gloom over immediate prospects as the European Commission cut its forecast for eurozone growth this year to 1.6 per cent, from the already weak 2 per cent that it had previously projected.