Britain sinks below Nigeria in financial stability ratings

The UK has been hit so hard by the recession it now sits below developing countries Nigeria and Panama in the financial stability rankings, says a report by the World Economic Forum today.

Out of 55 global economies, the UK ranks 37th for financial stability, just above the US at 38th, according to the Forum's second annual Financial Development Report.

Overall, the UK claimed the top spot as the world's leading financial system, displacing the US, which dropped below Australia to third place, hampered by dire economic stability scores and a weak banking sector.

Kevin Steinberg, chief operating officer at the World Economic Forum, warns stability is the key issue, not overall scores:

"The United Kingdom and US may still show leadership in the rankings, but their significant drops in score show increasing weakness and imply their leadership may be in jeopardy."

Germany and France suffered a heavy fall in overall scores that pulled them out of the top 10.

Both countries slumped in the rankings, but held fast in terms of financial stability, achieving scores significantly higher than the UK and US, the report says.