U.K. Slips To Seventh Place
But that was of course just four years after they took power, and during those first four years they pursued basically the same policies that the Conservatives had pursued. Also, the pound was significantly overvalued at that time (at that time it stood at roughly €1.7, now it has dropped to only about €1.1). After that however, Labour started to shift to the left and pushed through dramatic increases in government spending.
Now, however, the U.K. economy is only the seventh biggest, as the economies of China, France and Italy have surpassed it. In the case of China this reflects far higher economic growth, while for France and Italy it primarily reflects the weakness of the pound relative to the euro. Particularly France has however also had a more moderate downturn during the current economic crisis.