What a joy it must have been to be a Remainer in January, when the IMF predicted that Britain would be the only G7 country to suffer a contraction in the economy in 2023. For a while it seemed that we would never hear the end of it. , as the British economy was expected to perform even worse than Russia’s. Layla Moran, former LibDem leadership candidate, said: “It’s not rocket science. The UK is the only developed country with the added pressures of Brexit where businesses face added costs, mountains of new red tape and amplified labor shortages.
She was right. Economic forecasts are not rocket science. Indeed, if IMF astronomers had been entrusted to Apollo 11, Neil Armstrong and Buzz Aldrin would have found themselves catapulted past the Moon and drifting in the wild blue there like Major Tom. The IMF scenario for 2023 has been turned upside down. The UK has so far escaped recession, while the Eurozone has been plunged into it.
Revised figures from Eurostat show that the euro zone has fallen by 0.1% in each of the last two quarters. Meanwhile, the UK economy grew by 0.1% in each of these periods. This morning KPMG became the latest forecaster to quash previous warnings of a UK recession and say it no longer expects economic growth in Britain to fall into negative territory this year. The Bank of England has already admitted its mistake.
It’s no coincidence that the Remain rearguard lobby seems to be momentarily silent. Before we get carried away, it’s true that the UK economy remains in a quagmire of mediocrity, driven by a working class culture, politically inspired strikes, high taxes and an attitude towards regulation that doesn’t seem to have changed much. since the European Commission was making our laws for us without our consent. We will not get richer as a country until we solve our problem of chronic lack of productivity.
But the fact is that the EU is no better. It seems to be rather worse. Germany, in particular, has been dragged down by a reckless energy policy that shut down reliable nuclear power plants and built an overreliance on Putin’s gas. As a result, German GDP growth over the past two quarters was minus 0.5% and minus 0.3% respectively.
There is nothing to be gained by imitating the euro zone. Nor can it reasonably be said that Brexit is holding Britain back. The only anchor of the UK economy at the moment is our failure to seize the opportunities offered by Brexit to become something different from the standard European social democratic model. It would be a start if we could have economic policy that focused unabashedly on creating the fiscal and regulatory conditions for growth, rather than promoting the lifestyles of favored white-collar groups.
Yet the endless predictions of a Brexit-induced recession that have been made since 2016 have once again been proven wrong. The only recession we have suffered since Britain voted for Brexit was the one caused by the worst pandemic in a century, exacerbated by a policy of panic aimed at locking us in. That won’t stop diehard Remainers from predicting one.
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