LEADING economists have accepted at last that British business is surging ahead following the Brexit vote, the Treasury revealed yesterday.
A monthly analysis of forecasts prepared for Chancellor Philip Hammond showed that dozens of independent experts believe national output will continue growing this year. On average, they expect growth to continue at exactly the same rate as forecast before the EU referendum. The verdict was a major reversal following earlier expectations that the country’s decision to leave the EU would deliver a massive shock to the economy. Instead, the data suggests that the historic vote had no significant impact on growth at all. The u-turn was being seen last night as yet another devastating blow to the “Project Fear” scaremongering campaign run by the defeated and embittered supporters of Britain’s EU membership.
Forecasts for Chancellor Philip Hammond showed that national output will continue growing this year
Craig Mackinlay said in just three months ‘Project Fear had descended to Project Farce’
And it came amid growing expectations in the City that the Government is preparing for a “hard Brexit” that will mean quitting the EU single market and imposing full border controls. Tory MP Craig Mackinlay, who backed the Leave campaign, said: “In just three months Project Fear has descended into Project Farce. “Contrary to what economists and big banks like Goldman Sachs said, Brexit has heralded a new wave of growth as Britain prepares to unshackle itself from Brussels. “With new global free trade deals on the horizon the British economy has never looked so buoyant.”
And Richard Tice, chairman of the Brexit-backing pressure group Leave Means Leave, said: “Every week more data shows that Project Fear was a pack of lies. “Prospects are looking good for British business following British voters backing Brexit in June. “Demand in the financial services sector is up and UK manufacturing has become a global contender once again.” Theresa May hould trigger the formal process for leaving the EU by invoking Article 50 of the Lisbon Treaty at the first possible opportunity, he said. “The Government should invoke Article 50 at the soonest opportunity to maintain momentum and strengthen business confidence further.”
Each month, the Treasury collects forecasts from more than 30 leading independent financial bodies including City banks, think tanks and universities and publishes an average of their predictions. The first monthly average after the Brexit vote on June 23 downgraded the growth forecast for 2016 from 1.8% to 1.5%. But the latest Treasury comparison has returned to the original 1.8% growth forecast for the year. According to the survey, the experts still expect the economy to slow down next year, but are increasingly revising those forecasts upward.
“But that does not mean that the economy’s health is certain to deteriorate dramatically from here. For a start, while inflation is going to rise, we continue to think that the magnitude and duration of the increase will be relatively limited.” Mr Loynes also predicted that exports will keep on picking up. And he thought the Chancellor may try to simulate the economy with extra borrowing and spending on infrastructure projects.
Those factors should mean next year’s slowdown “should be limited and soon followed by a renewed recovery,” said Mr Loynes.