In the 1980s the Italian political and journalistic debate was inflamed around the so-called ‘sorpasso‘: the idea that Italy, on the long wave of the economic miracle and under the leadership of governments such as Bettino Craxi’s, was catching up with and surpassing the United Kingdom in terms of wealth produced. It was another era, with a very different global context, a Europe still under construction and an Italy looking confidently to the future. Today, forty years later, there is talk of a new economic convergence between Rome and London, but with very different roots and meanings: no longer the overwhelming strength of a growing country, but the intertwining of Italian resilience and the British structural slowdown.

In recent decades, Italy has been described as the sick man of Europe: low growth, stagnant productivity, high public debt. The UK, by contrast, was seen as a dynamic economy, capable of attracting global investment and talent. Yet, according to the latest International Monetary Fund data reported by Bloomberg, the picture has been radically transformed: Italy’s GDP per capita in purchasing power parity (PPP) has almost reached that of the UK.

In 2016, on the eve of Brexit, the gap was around $4,000 per inhabitant. Today, with an estimated income of $54,556, London is only $500 ahead of Rome and almost $1,700 behind France. An economic convergence that tells two parallel stories: the UK’s structural slowdown and Italy’s unexpected resilience.

The British brake

The choice of Brexit has profoundly affected the UK’s trajectory. The devaluation of the pound has made imports more expensive and reduced real purchasing power, while new trade barriers have dampened trade with Europe. London has lost its attractiveness to investors and skilled workers, while its historic ‘productivity puzzle’ – the difficulty in growing labour productivity – has intensified.

In recent years, the UK has also suffered from higher inflation than the European average, fuelled by energy costs and labour market imbalances. As a result, real growth in income per inhabitant has remained almost stagnant, a far cry from the expectations of ten years ago.

The Italian rebound

Italy, on the other hand, has been astonishing in its resilience. After the slump of 2020, the recovery has been more vigorous than expected, sustained by two factors: competitive manufacturing – from mechanics to pharmaceuticals, from design to agribusiness – and tourism, which has rapidly returned to pre-pandemic levels.

The role of the Next Generation EU has been decisive. Italy is the main beneficiary of European funds and, despite implementation difficulties, the PNRR has boosted public and private investment. The labour market has also shown positive signs, with a growing employment rate that has contributed to increasing disposable income.

Demography and public debt: different fragilities

However, there is one factor that explains part of the convergence and should not be underestimated: demographics. Italy is losing inhabitants – from 59 million in 2015 to just under 58 million today, with a downward trajectory set to fall below 54 million by mid-century. The population decline, in the short term, ‘inflates’ GDP per capita, because the same income is divided by a smaller number of citizens. But in the long run it is a ballast: less labour force, less consumption, more social security imbalances.

The UK experiences the opposite dynamic. The population is growing steadily – almost 69 million residents today, projected over 72 million in 2050. This fuels overall GDP, but can weigh on GDP per capita if productivity does not increase. This is what is happening: London has more population dynamics, but remains trapped in productivity stagnation.

Public accounts also tell of a paradoxical convergence. Italy remains the European debt champion, with a debt-to-GDP ratio at 137% in 2024 and forecasts keeping it above 130% throughout the decade. The United Kingdom, on the other hand, started from a much more favourable position, but saw its debt rise rapidly after Brexit and Covid: today it is at 103% of GDP and according to the IMF will stabilise at just above 105% by 2030.

In essence: Rome pays for the historical burden of a huge but relatively stable debt; London pays for the recent acceleration of a trajectory that brings it closer to Mediterranean fragilities.

The 2030 perspective and the European lesson

IMF projections indicate that by 2030 France, the UK and Italy will be moving in a similar corridor, with GDP per capita PPP values between USD 55 and 60 thousand. France is expected to maintain an advantage, but the real news is that Italy will no longer be lagging behind the UK.

This narrowly missed overtaking should not, however, be read as the end of Italy’s problems. Italy remains a country with weak potential growth, high debt and an ageing population. But the British parable shows that no economy is safe from bad policy choices or productivity crises.

The convergence between Rome and London does not therefore tell of a miraculous Italy, but of a Europe that is transforming itself and redefining its balances. If Italy is able to consolidate the reforms linked to the NRP and focus on productivity and human capital, the closing of the gap with the UK could become a turning point.

And, above all, a warning: in the post-Brexit and post-pandemic world, economic competition is played less and less on stereotypes and more and more on adaptability.