November 1, 2016

GDP figures prove the naysayers wrong

GDP figures prove the naysayers wrong

The latest UK economic growth figures are forcing the big investment banks and official bodies to rewrite their 2016 economic forecasts.

So now it’s official. The UK grew at 2.3 per cent in the year to end September. Growth continued at a good pace in the three months after the EU vote, contrary to most official forecasts and many private sector estimates. I am enjoying watching all those big Investment Banks and official bodies having to admit they got their 2016 forecasts very wrong. They are now writing the immediate sharp shock and recession out of their scripts, and accepting that the UK is likely to be the fastest growing advanced country economy this year. I stuck with the Treasury March budget 2% forecast, which looks pretty good now. The growth rate can tail off a bit in Q4 and my forecast will still be hit, and the UK will still be the fastest growing G7 economy.

The economic good news keeps coming in. This week I noticed the consultation from Hammerson for a £4.5bn investment in Brent Cross and Cricklewood. This will include a £1.4bn expansion of the Brent Cross shopping Centre, adding 1.4 million square feet of retail space to what they already have. This comes after the development of the two large Westfield London shopping centres in recent years. The plans have not yet been passed, but they are a big statement of confidence in the economy. I also caught up with the news that there is a contested planning application to put major concrete and concrete bloc capacity into the Bow East Goodyards site, to keep up with burgeoning demand for building materials. Southampton Port is seeking permission for a major expansion of their facilities at Dibsen.

The latest earnings figures show good growth in earnings around the whole country, with people on the lowest incomes getting the biggest percentage boost in recent months. This will help the retail sales and service sector figures. Nissan yesterday confirmed it will put two new models into its brilliant and highly competitive Sunderland plant.

Some of the forecasters want to remain pessimistic about next year, now shifting the bad news from this year. It is difficult to see why there should suddenly be a sharp downturn next year, given the growth in jobs, income, credit and money this year. Unless the UK authorities behave in a particularly damaging way to arrest the upwards progress of the economy, it looks as if there will be more growth next year. It could even be the case that construction, which was weak in the latest figures, picks up on the back of the various housebuilding and commercial development schemes now being examined by the main property investors and developers.

5.00 avg. rating (98% score) - 7 votes
John Redwood MP
John Redwood MP
John Redwood is the Member of Parliament for Wokingham in Berkshire. He was formerly Secretary of State for Wales in Prime Minister John Major's Cabinet. He is currently Co-Chairman of the Conservative Party's Policy Review Group on Economic Competitiveness.
  • digitaurus

    We have just had a 20% currency devaluation. 2017 will either see a big overshoot in inflation if we keep interest rates too low or a big reduction in growth if we push up interest rates to quell it. We have abandoned any ambition to bring government non-infrastructure spending into line with its tax take (and you’re all HAPPY about this???!!??) even in the medium-term future. We’ve promised Nissan that we will keep the UK in the European customs union (you’re all happy about this too?) – though I guess we can renege on that one. Our balance-of-payments deficit has grown to the largest on record with not much sign that currency devaluation is going to improve that. Happy days as you say.

  • ratcatcher11

    Basically Project Fear in all its manifestations has literally crashed and burned and those protagonists who pronounced on this misbegotten policy are furiously back peddling and trying to deflect their predictions to a date sometime in the distant future as all failed economists do.

  • MrVeryAngry

    Yup. Standard bureaucratic tactic. Where there isn’t a problem, create one. And then lie about the cause. Carney & Co. are world champions at that.

  • ScaryBiscuits

    The Remoaners now have a new ‘line to take’: predicting a recession at some stage in the future. In this they cannot possibly be wrong as there is always a recession sooner or later, except this time they will blame it on Brexit even though the ultra-loose monetary policies (i.e. money printing) of Carney and Hammond are more likely to be the cause.

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