According to Bloomberg data, Paris has taken top spot for the first time since records began in 2003. The aggregate value of the shares of its companies has been boosted by currency movements and the demand for French luxury brands by Chinese shoppers.
The combined value of British shares is now around $2.821trn, while France's are worth around $2.823trn, Bloomberg calculations show. In 2016, UK stocks were collectively worth $1.5trn more than France.
Seismic shift from UK to global equity funds in UK portfolios
A weakening economy has meant the UK stock market has long been out of favour. However, this year has been worse due to the energy crisis, double-digit inflation and the economic turbulence brought on by former prime minister Liz Truss's Mini Budget.
While many of Britain's blue-chip companies have been protected from the instability in the UK by their international market exposure, smaller businesses, particularly those consumer-focused, have been severely impacted.
The FTSE 250 index, which monitors mid-cap companies, has plummeted 17% this year compared to the FTSE 100 index's 0.4% decline. Retailers have taken a beating, with Ocado Group and JD Sports seeing their stock prices drop by more than 40% in 2022.
OBR warns Hunt of £70bn increase in UK government borrowing - reports
The news comes after Michael Saunders, a former Bank of England policy maker, told Bloomberg TV on Monday (14 November), that the UK economy had been "permanently damaged" by Brexit.
"The need for tax rises and spending cuts wouldn't be there if Brexit had not reduced the economy's potential output so much," he said.