The International Monetary Fund (IMF) has admitted that it misled the public when they claimed that Brexit would cause the UK to plunge into a recession.
The IMF now say that the British economy is on track to continue to grow by 1.7 per cent this year and a further 1.3 per cent next year.
That is weaker than the 1.9 and 2.2 per cent growth forecasts before the referendum, but the UK is still set to be the second-fastest growing economy in the Group of Seven industrialised nations this year – behind the United States – and third-fastest next year, behind the US and Canada.
But the new UK forecasts represent a climbdown for the global financial watchdog after it issued a string of doom-laden warnings over the damage Brexit would do.
Ahead of the referendum, IMF managing director Christine Lagarde, an ally of former chancellor George Osborne, said Brexit would be ‘pretty bad, to very, very bad’ for the UK.
But the latest forecasts – and an admission that a recession is now unlikely – suggest the outlook is not as bleak as the watchdog claimed.
And again, as The Mail notes, it is not the first time the IMF has had to row back from damaging comments about the UK economy. In April 2013, the fund’s then chief economist Olivier Blanchard said Britain was ‘playing with fire’ by pressing ahead with austerity at a time of ‘very low growth’. But the IMF was quickly forced into a dramatic volte face as the UK economy sprang into life, forcing Mrs Lagarde to admit ‘we got it wrong’.
The IMF’s new chief economist Maury Obstfeld said yesterday there were ‘promising signs’ for the global economy in the first half of 2016, but added: ‘Brexit has thrown a spanner in the works.’
John Longworth, who was ousted as director general of the British Chambers of Commerce after backing Brexit, said: ‘Talk of Armageddon seems to be receding.
‘This is not surprising. If the Government adopts the right policies, we will be in a position where all the doom and gloom that was predicted simply disappears.’
A Treasury spokesman said: ‘Our country remains open for business. We are the same outward-looking, globally-minded, big-thinking country we have always been.’
Still, we are sure The IMF’s new forecast will be spot on this time and the mainstream media will spin it as gospel enough reason to buy stocks…