UK ranks 22nd out of 165 in Economic Freedom
United Kingdom drops below Romania in economic freedom league table
The UK ranks 22nd out of 165 countries and territories included in the Economic Freedom of the World: 2022 Annual Report, released today by the Institute of EconomicAffairs in conjunction with Canada’s Fraser Institute. Last year, the United Kingdom ranked 11th.
Hong Kong and Singapore again top the index, continuing their streak as 1st and 2nd respectively.
Commenting on the report’s findings, Alexander Hammond, Free Trade Fellow at free market think tank the Institute of Economic Affairs, said:
“This year in the economic freedom league table, the United Kingdom has achieved its worst position since 1975. We are now less economically free than Romania and about on level-pegging with Bulgaria. Worse still, we declined by 11 spots in the last year alone.
“The main factors holding back our economic freedom are the sheer scale of economicactivity accounted for by the state and the exorbitant levels of taxation required to fund it.”
For the UK to ever score competitively in this report again, substantial spending cuts – not just small trimmings in non-controversial areas – are required, along with tax cuts of double, not single digits”
Commenting on Hong Kong’s position, Fred McMahon, Dr. Michael A. Walker Research Chair in Economic Freedom with the Fraser Institute, said:
“The most recent comprehensive data are from 2020. Hong Kong is already showing a decline in freedom in 2020 and we expect the decline to continue going forward.”
The United Kingdom scores in key components of economic freedom (from 1 to 10 where a higher value indicates a higher level of economic freedom):
- Overall Economic Freedom: changed to 7.71 from 8.16
- Size of government: changed to 6.55 from 5.93 in the last year’s report
- Legal system and property rights: changed to 7.69 from 7.75
- Access to sound money: changed to 9.71 from 9.6
- Freedom to trade internationally: changed to 8.43 from 7.72
- Regulation of credit, labour and business: changed to 8.44 from 7.58
According to research in top peer-reviewed academic journals, people living in countries with high levels of economic freedom enjoy greater prosperity, more political and civil liberties, and longer lives.
For example, countries in the top quartile of economic freedom had an average per-capita GDP of US$48,251 in 2020 compared to US$6,542 for bottom quartile countries.
And poverty rates are lower. In the top quartile, 2.02 per cent of the population experienced extreme poverty (US$1.90 a day) compared to 31.45 per cent in the lowest quartile.
Finally, life expectancy is 80.4 years in the top quartile of countries compared to 66.0 years in the bottom quartile.
Notes to editors
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IEA spokespeople are available for interview and further comment.
Economic Freedom of the World: 2022 Annual report can be downloaded here: https://iea.org.uk/wp-content/uploads/2022/09/economic-freedom-of-the-world-2022.pdf
About the Economic Freedom Index
Economic Freedom of the World measures how policies and institutions of countries support economic freedom. This year’s publication ranks 165 countries and territories. The report also updates data in earlier reports where data has been revised.
For more information on the Economic Freedom Network, datasets and previous Economic Freedom of the World reports, visit www.fraserinstitute.org. And you can “Like” the Economic Freedom Network on Facebook atwww.facebook.com/EconomicFreedomNetwork.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expanding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.