76349
The British economy will hardly expand 0.3-0.4% per quarter through to June 2018, with growth of 1.5% this year and 1.3% the next.
The British economy will hardly expand 0.3-0.4% per quarter through to June 2018, with growth of 1.5% this year and 1.3% the next.

Britain at the Bottom of G7 Wealthy Nations

Economists had warned that Brexit would create uncertainty, which reduces investment, and that a big fall in the exchange rate would lead to higher inflation. Now all of those things have come true

Britain at the Bottom of G7 Wealthy Nations

British economic growth will remain tepid over the coming few years, lagging well behind its peers, and could even be worse than economists polled by Reuters currently predict, as most say risks to their forecasts are to the downside.
These findings are in stark contrast to a Reuters poll also taken Nov. 13-16 on the eurozone, which found economists at their most optimistic about economic performance on the continent since the financial crisis, news outlets reported.
Bank of England Governor Mark Carney said the Brexit vote has slowed the UK economy and pointed out that the country was the best performing in the G7 prior to the referendum but is now among the worst.
“We have not done as well in the short term as we would have done if the vote had gone the other way,” Carney said on Thursday. We’ve gone from being the fastest growing economy in the G7 to one of the slowest.
The UK economy slipped to the bottom of the league of G7 leading economies in June but has since overtaken Japan after registering 0.4% growth for the latest quarter.
That leaves the UK trailing Germany, France, Italy, the US and Canada. On the eve of the Brexit vote the UK economy was expanding faster than all of those nations.
“We will do whatever we can to support the economy during the transition—whether there is no deal or a comprehensive deal,” Carney told ITV's Good Morning Britain.
“We can provide support by keeping prices low and stable and by making sure banks can withstand whatever shock that might come whatever deal we have. People shouldn’t have to worry about inflation and financial stability. We’ll make sure inflation stays low and the banks stay strong.”

Slower Growth
Median forecasts in the poll of nearly 80 economists, taken this week, was for the British economy to expand just 0.3-0.4% per quarter through to June 2018, with growth of 1.5% this year and 1.3% the next. That is significantly slower than annual growth rates of 2.2% and 1.9% predicted for the eurozone economy, which over the past decade has tended to underperform in Britain.
While the poll found only a median 20% chance of a UK recession in the coming year, 60% of economists who answered an extra question said the risk to their forecasts was to the downside.
“Risks to our main scenario for UK growth in 2018 are weighted somewhat to the downside due in large part to the risk of adverse political shocks, particularly around the Brexit negotiations,” noted John Hawksworth, chief economist at PricewaterhouseCoopers.
Britain is scheduled to leave the EU by the end of March 2019 when two years of negotiations over the divorce settlement and future relationship come to a close.

Brexit Damaging Productivity
Earlier this month, the bank’s monetary policy committee hiked interest rates for the first time in more than a decade, lifting its benchmark rate from 0.25% to 0.5%.
Carney’s comments come a day after his deputy, Ben Broadbent, said Brexit was likely to damage the UK’s productivity and could force a more rapid rise in interest rates.
In a speech on Wednesday, Broadbent said that it was wrong to assume that the impact of leaving the European Union would negatively impact national productivity (or output per hour worked) only gradually or in the longer term.
Instead, the former Goldman Sachs economist warned that the damage could be done relatively soon and might force a monetary policy response from the BoE to keep inflation under control.
Economists warned that Brexit would create uncertainty, which reduces investment, and that a big fall in the exchange rate would lead to higher inflation. All of those things have come true.

Inflation
Foreign exchange strategists in a recent Reuters poll said progress in the divorce talks would give the biggest boost to sterling in the coming year.
British inflation soared after sterling plummeted in the aftermath of the Brexit vote—it registered 3% in October. But it is likely to drift lower in coming years.
The poll predicted average consumer prices will rise an average of 2.7% this year, 2.5% next and 2.2% in 2019—all above the central bank’s 2% target. A plurality of economists said forecast risks were skewed to the upside.

Short URL : https://goo.gl/J5LjHm
  1. https://goo.gl/7sySX6
  • https://goo.gl/jKPWov
  • https://goo.gl/JS8BTu
  • https://goo.gl/R38Pkj
  • https://goo.gl/YBBdWF

You can also read ...

Qatar Capable of Overcoming Siege Challenges
Qatar affirmed its ability to overcome the challenges of the...
Apple Inc won guarantees from the Trump administration that its lucrative iPhones would ship from China  without being subject to tariffs.
Big companies in the United States from Amazon.com Inc to...
State-Actors Likely Behind Singapore Cyberattack
State-actors were likely behind Singapore’s biggest ever...
Japan Inflation Inches Higher
Japan’s inflation picked up slightly in June, largely because...
S&P Affirms Russia’s Stable Outlook
Standard & Poor’s said in a statement on Friday that it...
Today, income inequality in the US is greatest among Asians. Asians displaced blacks as the most economically divided racial or ethnic group in the US.
The rich are getting richer and the poor are getting poorer in...
Argentina Making Fiscal Progress
Argentina is “unequivocally” making progress on its goals to...
US Tariffs to Cost Germans $23b
US President Donald Trump’s tariffs will lead to a drop in...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus