The Telegraph is reporting (HERE) that the Ernst & Young ITEM (Independent Treasury Economic Model) Club is to release today the first economic forecast following the Brexit vote. It downgrades growth this year to 1.9% (was 2.3%) and for 2017 it says we will grow by just 0.4% (was 2.6%).
So next year they expect to see a big hit to the economy with unemployment beginning to rise towards 7.1% by 2019. Each 1% is equivalent to 300,000 people. At present unemployment is around 5% so an extra 630,000 will be out of work by 2019. The Telegraph says we will "skirt" recession but meanwhile, Bloomberg, quoting the same piece of work by EY says we face a "short" recession with house prices declining by 4% as Brexit "hammers" consumer spending (HERE).
The Guardian (HERE) are reporting Mr Richard Buxton, the chief executive and head of UK equities at Old Mutual Global Investors (OMGI), which manages £26bn of funds on behalf of individual investors and institutions, saying warnings from the pro-EU campaign about the impact of Brexit before the referendum were well placed, “I don’t think there was doom-mongering, because it is absolutely going to be horrible,”
Compare this to an article in Conservative Home from Mark Wallace (HERE), a leave campaigner who claims job numbers are up and countries are lining up to do trade deals with us, "For a long time, Eurosceptics were accused of being fantasists – wildly over-optimistic about the prospects of an independent Britain. Now it seems that the opposite was in fact the case: those who advocated staying in the EU on the basis that Britain could not manage its own affairs were being unrealistically negative".
Who is right? Time will tell.
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