Another boost for UK plc

BRITAIN’S economy will grow by more than previously expected this year as the squeeze on family finances ends, a report says today.

In another sign that the UK is defying warnings of a sharp Brexit slowdown, the Ernst & Young Item Club forecasting group now believes the economy will grow by 1.7 per cent this year. It predicted 1.4 per cent just four months ago.

In the report, it also admits it was too gloomy last year when it predicted 1.3 per cent growth – the actual figure was 1.8 per cent. The Item Club is just the latest forecaster to admit it was wrong to be so pessimistic about the outlook for Brexit Britain. Appearing to disown so-called ‘Project Fear’ last month, David Cameron described the vote to leave the EU as ‘a mistake not a disaster’ and added: ‘It’s turned out less badly than we had thought.’

Howard Archer, chief economic advisor to the Item Club, says in the report: ‘The near-term prospects for the UK economy appear brighter, with GDP growth in 2018 being helped by the squeeze on consumers easing as the year progresses.’ However, he added that ‘ Brexit uncertainties remain significant’.