Brexit boom is HERE as economy soars to defy doom-mongers

Posted on Jan 27 2018 - 8:46pm by admin


Philip Hammond hailed the ONS figures

That is up from 0.4 per cent in the previous three months and far higher than economists had predicted.

The Office for National Statistics figures also show output as a whole rose last year by around 1.8 per cent.

That is more than the 1.5 per cent the Office for Budget Responsibility predicted only two months ago.

Growth is also significantly outstripping the Treasury’s Project Fear warnings in 2016 about the immediate impact of a referendum vote to leave the European Union. 

The economy has performed much better than many feared

Ben Brettell

In May that year the department said that if the British people voted for Brexit it could push the economy into immediate recession and growth would still be zero by the last three months of 2017.

Even Bank of England governor Mark Carney, a leading Remainer, conceded yesterday that Britain could now catch up with the rest of the world after suffering a “short-term” hit following the Brexit vote.

Sterling rose yesterday against the dollar and the euro.

Ben Brettell, of Bristol-based investment firm Hargreaves Lansdown, said: “The economy has performed much better than many feared in the aftermath of the Brexit vote, boosted by the rising tide of a global recovery which has lifted all boats.” 


Mark Carney said ‘we took a short-term hit’

Ian Stewart, chief economist at accountancy firm Deloitte, said: “Activity has softened since the referendum but less than widely expected. A strong global recovery and a weak pound are boosting UK exports and manufacturing.”

Chancellor Philip Hammond hailed the ONS figures – which are a first estimate and may be revised as more data emerges – as evidence of Britain’s “resilience”.

Speaking at the World Economic Forum in Davos, Switzerland, he said: “These are excellent last quarter figures. They are higher than market expectations, higher than the OBR’s predictions for 2017.

“This underscores once again the resilience of the British economy as we go through this period.”

He added: “These are very, very strong figures and much stronger than people were predicting.” 

Talks in coming months with Brussels to agree an “implementation period” after next year’s Brexit would give businesses extra certainty, he said, and then discussions would shape Britain’s future relationship with the EU.

“I expect that as those discussions progress and it becomes clear to everybody that we are going to be able to negotiate a good deal with the EU, that will have a positive effect on business and economic and market sentiment in the UK.”

In a written statement echoed by Downing Street, Mr Hammond said: “Five years of sustained growth and record employment are achievements we can be proud of. But we are not complacent, which is why we are investing billions of pounds in transport, housing, digital connectivity and skills as we build an economy fit for the future – supporting people for generations to come.”

Before the figures were published, Mr Carney risked more Brexiteer criticism when he said the economy had suffered a short-term hit in the wake of the 2016 referendum.

“We’re in a position today where the economy is about a percentage point less in size than we expected before the vote and by the end of the year it will be probably two percentage points below,” he told the BBC. 


Mr Hammond speaking at the World Economic Forum in Davos, Switzerland

But he also stressed the potential for improvement as progress in Brexit talks boosted business confidence. Other experts were more bullish.

Howard Archer, chief economic adviser to the EY ITEM Club, said: “Growth of 1.8 per cent in 2017 was a significantly better performance than had been widely expected at the start of the year.”

Professor Patrick Minford, chairman of the pro-Brexit Economists for Free Trade, said: “These latest figures go to show that Project Fear was completely wrong then, and Remainers are wrong now. The British economy has thrived.”

But Darren Morgan, of the ONS, warned: “Despite a slight uptick in the latest quarter, the underlying picture is of slower and uneven growth across the economy.

“The boost to the economy at the end of the year came from a range of services including recruitment agencies, letting agents and office management. Other services showed much slower growth.

“Manufacturing also grew strongly but construction again fell.”

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