EU bosses have predicted that the UK economy will grow by 1.5 per cent year
That is a significant increase from the gloomy forecast of just one per cent growth made by Brussels last autumn following the UK’s historic decision to leave.
The admission that the doom merchants were wrong came in a Winter Economic Forecast from the European Commission, saying the British economy had “maintained momentum” since the referendum last June.
The news was “the final nail in the coffin for Project Fear predications that Brexit would damage the economy,” said Tory MP Maria Caulfield, a member of the Commons EU Exit Committee.
Former Tory minister John Redwood added: “I am very glad they have taken a more balanced view of the economy.
“It is a pity they couldn’t have done that before people had their vote.”
And John Longworth, cochairman of the anti-Brussels pressure group Leave Means Leave, said EU officials could not be trusted.
I am very glad they have taken a more balanced view of the economy
Tory minister John Redwood
He said: “Bitter from the democratic decision by the British people to leave the crumbling EU project, unelected bureaucrats predictably talked down Britain’s economic prospects.
“The revelation that the EU Commission has been forced to admit it was wrong and now upgrade UK growth forecasts shows they are completely misguided and that their gloomy predictions are not to be trusted.
May's Brexit speech: World reacts LIVE
Tue, January 17, 2017
Politicians and celebrities tweet their reaction as Theresa May unveils her 12 point plan for Britain leaving the EU.
Get Quotes on Home Insurance
1 of 8
President of the European Council, Donald Tusk tweets his frustration.
The report said the British economy had “maintained momentum” since the Brexit vote
“The economic evidence available since the EU referendum has demonstrated that the British economy is doing extremely well. “And this is before the huge benefits of Brexit are implemented.”
The Commission went on to claim that the impact of the referendum outcome “had yet to be felt” in full. And its forecast warned that the UK economy could slow down in 2018.
GDP growth of 1.6 per cent was predicted across the rest of the EU for 2017, up from 1.5 per cent in last autumn’s forecast.
The Commission claimed the UK economy would slow to 1.2 per cent next year, with 1.8 per cent growth expected across the EU.
Its Winter Forecast said: “The impact on growth of the vote by the UK to leave the EU has yet to be felt. “The economy has maintained momentum since the referendum.”
The Economic Forecast named Brexit as one of a series of factors creating an “extraordinarily high level” of economic uncertainty. Other factors included the forthcoming elections in key EU states, including France, the possibility of protectionist trade policies in the US under Donald Trump and a worldwide “mounting backlash against globalisation”.
John Redwood welcomed the ‘more balanced’ forecast from the EU
The Commission warned of falling business investment and rising inflation in the UK, coupled with weak growth in disposable incomes and household consumption. But it also said our exports will grow, thanks to the decline in sterling’s value since the Brexit vote.
Healthy growth figures have largely been driven by consumers cutting back on saving in order to spend more, the report said.
But consumption is expected to be scaled back as wages fail to keep pace with inflation – expected to hit 2.5 per cent in 2017 and 2.6 per cent in 2018.
And the report warned of falling business investment due to “rising uncertainty”.