Published On: Sat, Nov 25th, 2017

'It's absurd' Fury over IFS 'gloomy' Brexit Britain economic forecast


Paul Johnson from the Institute for Fiscal Studies (IFS) used yesterday’s Budget response to speak on the “danger” of two decades without earnings growth as Britain’s productivity remains ponderous.

With GDP per capita predicted to be lower in 2021 that it was in 2016 the IFS claimed Britain’s “forecasts for productivity, earnings and economic growth make pretty grim reading”.

Professor Patrick Minford, Chair of Economists for Free Trade, who criticised Mr Hammond’s Budget for being in “denial” of Brexit’s economic benefits, told Express.co.uk: “The IFS is blindly following the OBR’s absurdly gloomy forecasts for the economy.

“The Government must take steps to capitalise on the benefits of Brexit.”

Professor Minford’s comments come in wake of his colleague David Paton, Professor at Nottingham University Business School, writing for BrexitCentral on the Chancellor’s change of mood and the end of “Project Fear”.

Professor Paton from Economists for Free Trade and Labour Leave, argues “the indications in the Budget that Mr Hammond is at least now thinking about the possible upside to Brexit are welcome”.

He said: “If we use the opportunity Brexit provides to move away from the cumbersome EU economic model and adopt instead a lighter touch, lower tax, lower spending approach, we can expect a much brighter economic outlook. 

“There is a huge challenge ahead for Britain to build a more competitive economy focused on low business taxation and upskilling the domestic workforce in which higher productivity is a central objective to ensure Britain becomes an even greater beacon for foreign direct investment and business growth.”

The key point for both Professors Paton and Minford remains the genuine risks that exist when leaving a large trading bloc such as the EU, are far outweighed by the potential benefits.

The problem for Mr Hammond, Professor Paton says, is that he is now working under a cloud of gloom from the Treasury.

He said: “Rather than being shamed by the failure of their pre-referendum forecasts, they continue to be in denial about the economic opportunities Brexit can give the UK.

“The medium-to long-term prospects for the economy are much brighter than indicated by the Treasury and the Office for Budget Responsibility.

Professor Paton calls the Chancellor’s allocation of £3 billion for Brexit preparations, as “a serious and important signal of intent”, and a chance to, “break free from EU control and protectionism and embrace a bright future for a newly-independent UK economy”.


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