Borrowing falls to its lowest level since before the financial crisis while growth forecasts go up
The economy is ending 2016 on a high following the Brexit vote, experts said yesterday.
The Treasury, Bank of England and Confederation of British Industry had warned that leaving the EU would trigger economic disaster.
But all three have conceded the UK was prospering after the June referendum, thanks partly to the slump in the pound.
In a further boost, figures yesterday showed official borrowing has fallen to its lowest level since before the financial crisis.
John Longworth, co-chairman of Leave Means Leave, said: ‘It is about time the Bank of England, CBI and others acknowledged they were wrong and set about talking up Britain and our bright economic future.’
Yesterday the Treasury said the outlook was far brighter than previously thought. It said a panel of independent economists it monitors expects growth of 2.1 per cent this year and 1.3 per cent next year. That compares with 1.5 per cent and 0.5 per cent predicted by the experts soon after the June referendum.
In a separate report, the Bank of England said ‘activity had edged up’ in recent months, although ‘business remained cautious’ about the future.
The Bank – whose Canadian governor Mark Carney faced calls to quit following his role in Project Fear – said the fall in sterling has boosted exports and tourism while foreign investment in the UK has also picked up.
Costs paid by companies for materials and imports are rising at the fastest pace for around five years following the fall in the pound, the report said.
But while inflation is set to rise next year, the Bank noted that shoppers are benefiting from a supermarket price war which has kept a lid on food costs.
This defies predictions that the falling pound would push up the cost of everything from meat and fish to fruit and vegetables.
The report added that some companies have switched from foreign to domestic suppliers to hold down costs.
Today, the CBI will admit that the economy is growing at the fastest pace for a year. The group, which is funded by Brussels and previously argued Britain should join the euro, says manufacturers ‘saw a strong rise in activity’ in the last three months while high street sales stayed ‘solid’.
CBI economist Alpesh Paleja said: ‘It’s great to see the economy end the year on the up.’
Yesterday the Office for National Statistics said Government borrowing was £12.6billion last month, the lowest November deficit since 2007.
A Treasury spokesman said ‘significant progress’ has been made but ‘our debt and deficit remain too high’.
December 21st, 2016: Daily Mail