Carney upbeat over post-Brexit economy

BRITAIN’S economy is set to improve once Brexit is finally delivered, according to forecasts from the Bank of England.

In an election boost for Boris Johnson, Bank governor Mark Carney said yesterday that there could be a ‘pick-up in UK growth’ now that a withdrawal agreement has been hammered out with the EU.

Bank officials, who have previously been labelled ‘gloomsters’ by the Prime Minister, predicted that economic growth would rise from 1.4 per cent this year to 2 per cent by 2022 if the UK pulls out of the EU in January.

However, growth in 2020 and 2021 will be more muted under the new forecasts than the Bank had predicted in August.

It believes the economy will expand by 1.2 per cent next year and 1.8 per cent in 2021, down from its previous estimates of 1.3 per cent and 2.3 per cent respectively. And Britain’s economy will be approximately 1 per cent smaller by 2022 than it was under the August projections.

But rather than blaming Brexit for this, Mr Carney said most of the dip was due to a blanket of gloom settling over the world economy, which is expanding at its slowest pace since 2009.

But he said there was light on the horizon for Britain, amid hopes that the protracted period of uncertainty which has been holding back business investment and spending might finally be coming to an end.

He added: ‘Now it’s become possible that the picture in the UK could change, with the recent UK-EU withdrawal agreement creating the prospects for a pick-up in UK growth.’

Mr Johnson welcomed the Bank’s forecasts. ‘What the governor of the Bank of England said, quite rightly, was that when we get Brexit done it will immediately unleash investment and confidence in the UK economy,’ he told ITV News.