In recent years, the UK has continued to experience a period of robust economic growth, record levels of employment and a falling deficit. Our economy grew by 1.8 per cent last year; growing faster than countries such as Japan and the United States, the first and third largest economies in the world.
This level of growth is expected to continue as the Office for Budget Responsibility now forecasts a rate of 2.0 per cent in 2017. PricewaterhouseCoopers predicts that over the next three decades UK economic growth is expected to be double the annual pace of growth expected in Italy. They also expect UK growth to outpace levels seen in both France and Germany. PwC went on to say that if we forge new trade ties with faster-growing emerging economies we can cement our status as one of the engines of global growth.
Most economic forecasters agree that the global economy will continue to grow at a steady pace. The IMF predicts that Indonesia, Brazil, India and Mexico will climb the projected GDP rankings. The so-called E7 group includes these countries and the IMF estimates that, as a group, they could be double the size of the G7 by 2040. We will soon be best placed to sign bilateral free trade agreements with each of these fast-growing nations.
Barclays commissioned the report UK trade outlook 2016-2026 last summer, which predicted that services are set to account for half of UK exports from 2026, up from 38 per cent in 2006 and 44 per cent last year. This will put the UK in contention as the global leader for service exports. By 2026 the total value of UK goods and services exports is predicted to increase from an estimated £536bn in 2016 to £880bn in 2026.
Such a position of economic strength gives us an advantage in the upcoming Brexit negotiations. We now have a crucial task persuading the member states, particularly in a year with key elections in France and Germany, that they have a massive mutual, selfish and strategic interest in continuing reciprocal free trade with us. It is important over the coming months that the democratically elected governments of the member states, with whom we trade successfully, exert their influence over the Commission negotiators, who may well have a different political objective giving priority to the European project.
As we enter this negotiation period our optimal strategy is reciprocal free trade with the 27 members of the EU. We are a prosperous nation with a great future ahead of us. Once we leave the Customs Union, its Common External Tariff and embrace free trade, we can then begin making bilateral free trade agreements with fast-growing nations around the world.