Next year's UK growth will exceed 2% despite Brexit

London

I THINK the British Treasury got its UK economic forecasts about right. In March this year the department estimated 2016 GDP growth of 2 per cent, and 2.2 per cent for next year. This was based on the wrong assumption that Britons on June 23 would vote to stay in the European Union. The good news is this: even though the referendum vote went the other way, I see no need for the Treasury to change its 2017 forecast.

Many private-sector forecasters seem to think the UK has to slash its 2017 growth estimates. The Bank of England has waded in with a forecast of just 0.8 per cent growth next year, apparently adding another misjudged prediction to its previous forecasts. With this GDP view, the Bank is actually one of the optimists. Most other private-sector forecasters are still predicting growth below 0.8 per cent for 2017, although some have admitted they were wrong in predicting recession.