Britain is fast becoming the poor relation in the club of the world’s top economies because of the deepening recession and the plunging value of the pound.

The Oxford Economics consultancy, which only a few months ago reported that Britain’s living standards had overtaken those in the United States, will disclose this week that the country has suffered a sudden and savage slide down the global rankings.

This is the economic reality behind the pain that many travellers have been discovering over the holiday period. Even on the shortest trip across the Channel, Britons no longer have much purchasing power. The big spending days may be over.

Last year, according to the Oxford calculations, Britain was better off on average than other G6 countries – the top world economies (United States, Germany, Japan, France and Italy).

National income (gross domestic product) per head last year, expressed in dollars, was $45,970 in Britain, $45,830 in America, $40,925 in France, $40,405 in Germany, $35,586 in Italy and $34,244 in Japan.

This reflected not only the strength of the pound but also that Britain had enjoyed a run of growth stretching back to the early 1990s and which last year exceeded 3%.

This year, however, Britain – with a GDP per head of $43,859 (the pound buys fewer dollars) – has been o v e r h a u l e d b y t h e U S ($46,993), France ($45,088) and Germany ($44,245). Only Italy, ($39,641) and Japan ($38,692) remain behind.

Worse is to come, according to the Oxford Economics projections, because of the recession and the sliding pound. “UK GDP per capita in 2009 will be 24% lower than in America and will be over 15% lower than in Japan, Germany and France,” said Adrian Cooper, managing director of Oxford Economics.

“It will even be 7% lower than GDP per capita in Italy, where economic performance has been very poor over the past decade.

“The UK was at the centre of the global financial boom and this led to a dramatic improvement in its apparent living standards relative to its peers. But the subsequent bust in financial markets has taken a heavy toll. Recession and falling sterling have relegated the UK to the bottom of the G6 league table.”

Sterling, which during the summer was trading at above $2 to the pound, ended last week at just below $1.47. Against the euro it continued to trade close to parity at just under €1.05.

Economists say the weakness of the pound and the economy are closely linked. HSBC, the banking group, predicts the economy will shrink by 2.5% next year, a deeper recession than in the United States or the eurozone.

“The fall in UK relative living standards at market exchange rates will hit hard those holidaying abroad,” Cooper added. “Britons will no longer be among the richest people on the beach.”

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