LONDON, Sept 28: The United Kingdom’s GDP per capita is now the third highest in the G7, compared with the lowest 10 years earlier.

According to the latest Economic Survey of the UK released by the OECD this week, GDP growth in the country has been close to its trend rate of around 2¾ per cent for a number of years, suggesting that the amplitude of the economic cycle is smaller now than in previous decades.

This strong performance is said to be not only due to the willingness to embrace the opportunities offered by globalisation, but also to sound institutional arrangements for setting monetary and fiscal policy, as well as a period of robust trading partner growth.

Despite offshoring, employment is said to have grown steadily and unemployment is low. But the labour market position of many low-skilled workers needs to be further improved. The participation rate of some groups is low and others suffer from poor incentives to progress in work.

To raise the adaptability of the workforce the government has invested in education. It is also spending more on fighting poverty and has been addressing weaknesses in the transport and health systems.

The budget deficit remains large, and slower growth in government expenditure will be required over the coming years, as well as more effort to ensure good value for money in public spending.

Against this background, the OECD said further rewards from globalisation can be reaped by addressing the following challenges:

Improving prospects for the least skilled to benefit from globalisation and enhancing business conditions for productivity growth and job creation.