Italian GDP per capita exceeds that of the UK: an unexpected turnaround

For the first time since 2001, the average level of economic well-being in Italy has exceeded that of the UK, marking a significant moment for both countries. The figure represents a setback for London, where the executive led by Keir Starmer and Chancellor Rachel Reeves are trying to revive growth and competitiveness. According to World Bank estimates, gross domestic product per capita - adjusted for the cost of living - reached $60,847 in Italy, exceeding the UK's $60,620. Although the overall GDP of the United Kingdom remains higher, the individual average is now lower than that of Italy. The difference is accentuated by demographic trends: the British population continues to grow rapidly, redistributing the wealth produced among a larger number of inhabitants. In Italy, on the other hand, the population declines, allowing a larger increase in average income despite similar economic growth.

The British context remains complex: unemployment has risen to 4.7 per cent, inflation is preparing to hit 4 per cent - twice the target set by the Bank of England - and public spending on benefits continues to rise. Added to this is the difficulty of implementing structural reforms: the Labour government's attempts to reduce welfare measures have met with internal resistance, forcing more than one political retreat. The National Institute of Economic and Social Research has also pointed out that the stagnation of the last decade is jeopardising the UK's position among the most developed countries, with the poorest households now worse off than in several Eastern European states.

On the other hand, Italy has seen unexpected progress recognised. As we read in the Daily Telegraph - which dedicates two analyses signed by Tim Wallace, deputy editor of the economics pages, and Daniel Johnson, political columnist - this effect is mainly due to the reforms launched by the Meloni government, from the containment of some social security benefits to the simplification of the judicial system, receiving positive feedback from various international analysts. Building incentives, together with European funds from the Next Generation Eu programme, have given a significant boost to the economy, helping to reshape the image of a country long perceived as economically fragile. Even political stability - rare in Italy's recent history - is now seen as an attractive factor compared to other large European countries beset by internal tensions.

Despite progress, Italy continues to face structural criticalities. Public debt remains high - around 130% of GDP compared to 100% in the UK - and the end of the so-called superbonus has left a heavy fiscal legacy. Moreover, real wages have not yet recovered to pre-pandemic levels, unlike in the UK. On the social front, the UK defends some supportive measures, such as the increase of the minimum wage, capped limits on public transport and school welfare programmes, aimed at protecting the purchasing power of families.

Economists read this overtaking as a sign of a turnaround: Italy is no longer just the 'sick man of Europe', while the UK is facing the risk of a relative retreat. According to Andrew Kenningham of Capital Economics, this is comparable to the 1980s, when the Italian economy briefly outperformed the British economy. The overall picture suggests that while both remain among the largest global economies, Italy and the UK are now on divergent trajectories: Rome redeeming itself, London grappling with a slowdown that calls into question its historic primacy in terms of living standards.