Report: Predictions of Post-BREXIT Economic Doom Vastly Overstated

Report: Predictions of Post-BREXIT Economic Doom Vastly Overstated

Prior to the Brexit vote, the Centre for Economics and Business Research (CEBR) lent fuel to the “remain” proponents’ “Project Fear” by predicting economic gloom for the UK should voters choose “leave.”  Their doom and gloom report assured the world that leaving the EU would plunge the UK into economic decline.

Indeed, the Bank of England predicted, incorrectly as it’s turned out, that a UK vote to leave the EU would lead to recession.  This didn’t happen, and as I noted in 2016, the UK has no problem reaching trade agreements on its own.  Unfettered by the EU albatross, the UK economy is now expected—by the CEBR no less—to flourish.

The CEBR admits that it was wrong in its early predictions and that the UK’s economy is expected to exceed that of France by 2020.

The Daily Mail reports:

Britain’s economy is now predicted to overtake France’s in 2020 as experts admitted they had been too gloomy over Brexit.

The Centre for Economics and Business Research (CEBR) had claimed the economy would slow down because of a drop in consumer spending and investment.

But last night the think-tank admitted it had got this wrong, saying: ‘In practice this has not happened.’

Its economists accepted the fears they expressed last year that Brexit would leave the UK behind the French economy for five years were exaggerated.

They concluded that, despite fears of a ‘Brexodus’ of financiers, the City has actually increased its lead as the world’s financial centre since the referendum.

The CEBR said that a trade deal with Brussels looked more likely after Theresa May agreed a transitional deal with the EU earlier this month.

It said Britons should expect lower inflation and higher wages over the next few months, easing pressure on family finances. And the think-tank predicted the UK – now the world’s sixth-largest economy – will overtake France in 2020, a year earlier than it originally forecast.

The new report has apparently prompted the architect of the “remain” camp’s “Project Fear,” former Treasury head Lord Macpherson, to acknowledge that the economic impact of Brexit should be “limited.”

The Business Insider reports:

Lord Macpherson, the civil servant dubbed “The Architect of Project Fear,” believes Brexit’s negative impact on the British economy will be limited if it is handled correctly.

Macpherson was the Tresury’s most senior civil servant before the Brexit referendum, and was responsible for the forecasts that suggested Britain striking a Canada style deal after a Brexit vote could lower long-term economic output by as much as 6%.

Those forecasts — as well as predictions of a possible Brexit induced recession — were held up by many on the Leave side of the referendum campaign as the cornerstones of so-called “Project Fear.” “Project Fear” was essentially an unproven Brexiteer belief that the pro-Remain establishment was deliberately trying to scare the British people into voting to stay in the EU with unnecessarily downbeat predictions of the post-Brexit future.

Despite having been at the heart of the Treasury’s gloomy predictions about the impact Brexit could have on the British economy, Macpherson is now a little more upbeat.

“Brexit is a risk but its economic impact should be limited provided [the government] seizes policy opportunity and looks forward not back,” he said in a tweet a few days before Christmas.

Also of note in the CEBR report are India’s and China’s economic booms.  India is projected to bypass the UK and France next year, and China is predicted to surpass the U. S. by 2032, becoming the world’s number one economy.

Reuters reports:

India looks set to leapfrog Britain and France next year to become the world’s fifth-largest economy in dollar terms, a report showed on Tuesday.

The Centre for Economics and Business Research (Cebr) consultancy’s 2018 World Economic League Table painted an upbeat view of the global economy, boosted by cheap energy and technology prices.

India’s ascent is part of a trend that will see Asian economies increasingly dominate the top 10 largest economies over the next 15 years.

“Despite temporary setbacks … India’s economy has still caught up with that of France and the UK and in 2018 will have overtaken them both to become the world’s fifth largest economy in dollar terms,” said Douglas McWilliams, Cebr deputy chairman.

McWilliams said India’s growth had been slowed by restrictions on high-value banknotes and a new sales tax, a view shared by economists polled by Reuters.

China is likely to overtake the United States as the world’s No.1 economy in 2032, Cebr said.

“Because the impact of President Trump on trade has been less severe than expected, the USA will retain its global crown a year longer than we anticipated in the last report,” the report said.

Color me optimistic, but I suspect that President Trump is being as vastly underestimated by the CEBR as was the post-Brexit UK.

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