(This bog was originally published in June, but for reasons best known to WordPress, has since disappeared.)
“UK Has the Fastest Growth in the G7.”—Prime Minister Boris Johnson
Brexit bred much uncertainty, adding to the constraints of life under lockdown. But Boris Johnson bounced with irrepressible vision of Churchillian sunlit uplands. However, in April, IMF projections already showed Britain facing slower growth and more persistent inflation than any other major economy next year. Russia’s invasion of Ukraine amplifies inflation pressures already present, squeezing living standards and growth. Subsequent inflation and energy figures show matters worsening.
“Consumption is projected to be weaker than expected as inflation erodes real disposable income, while tighter financial conditions are expected to cool investment”F)—International Monetary Fund
The IMF first cut its forecast for the UK’s GDP growth for 2022 to 3.7% from January’s forecast of 4.7%, while for 2023 the growth rate was first halved to 1.2% from 2.3% and finally in July to 0.5%.
The projected growth for Britain next year is lower than for any other major advanced economy and well below the 1.8% forecast by OBR. IMF chief economist Pierre-Olivier Gourinchas said:
“The downgrade reflects elevated inflation pressures and tighter monetary policy.”—IMF