Post-Brexit Britain set to become fastest growing G7 economy

by WorldTribune Staff, October 6, 2016

The dire predictions by the anti-Brexit crowd that a vote to leave the European Union would quickly send Britain’s economy crashing into the dark ages is looking like, well, rubbish.

In fact, the International Monetary Fund’s (IMF’s) outlook for the UK’s immediate post-Brexit economy is upbeat. The UK will be the fastest growing major economy on the planet this year, the IMF said.

Graphic by UK's Telegraph
Graphic by UK’s Telegraph

Maurice Obstfeld, the IMF’s economic counselor, said the fund had been right to warn about the risks of Brexit but added: “We are looking at a soft landing for 2016. We are happy about the outcome.”

In its latest World Economic Outlook, the IMF pointed to “action taken by the Bank of England following the Brexit vote, including cutting interest rates and freeing up more cash for banks to lend had helped to maintain confidence in the economy.”

The IMF expects the UK economy to grow by 1.8 percent in 2016, putting the country on course to be the fastest growing G7 economy this year.

Philip Hammond, Tory parliament member and Chancellor of the Exchequer, said the UK economy had shown its resilience since Brexit but there was no room for complacency.

“There are still challenges ahead, as the IMF note in their estimate for growth in 2017. That is why I stand ready to take action to support our economy through any period of turbulence and will continue to pursue the long-term goals of fiscal consolidation and improved productivity.”

Meanwhile, The IMF said the U.S. economy will expand by only 1.6 percent this year, down from 2.6 percent in 2015.

“The U.S. economy has lost momentum over the past few quarters, and the expectation of a pickup in the second quarter of 2016 has not been realized,” the IMF said.

The IMF’s latest report described the pace of credit growth in China as “dangerous” and branded the country’s growth targets “unsustainably high”.