The International Monetary Fund reported yesterday that the UK is set to the be fastest growing major economy this year, backtracking on its pessimistic predictions of a post-Brexit recession.
When the referendum date was announced, the IMF initially made long-term forecasts, predicting that investment and trade would eventually be weaker, were the UK to leave the EU. However as the referendum date loomed, the IMF ramped up its predictions of the dire outcomes of a Brexit vote, warning that the UK would immediately plunge into a recession, and the stocks and housing markets would crash.
The IMF now predicts that growth of the UK’s GDP will reach 1.8% by the end of this year; by comparison, Germany, Europe’s largest economy, is expected to grow by 1.7% this year.
However, the IMF did stick to its original long-term predictions and cut the UK’s 2017 growth forecast to 1.1%, repeating its warnings that Brexit will result in a decline in the long term growth of the UK.