Officials in Brussels announced yesterday that the UK economy would grow by 1.5% this year forcing them to backtrack over their November forecast of a growth rate of only 1%. European economists also stated that the UK performed better last year than initially expected, with a growth of 2% as opposed to the projected 1.9%. The European Commission commented “given the lag between decisions to invest and actual investment, the impact of the result of the EU referendum is expected to become apparent later in 2017”. The European Commission also warned that the UK economy was too focused on domestic demand and leaving the economy “unbalanced”. Nevertheless, the upgrade in growth corresponds with the Bank of England’s revised projections, which raised its forecast to 2% growth this year and 1.6% next year. Responding to the European Commission’s claims of unbalanced growth, UK economists pointed to strong manufacturing results in December (up 2.1%) while the trade deficit also fell in the final quarter to £8.6 billion.
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