The European Commission (EC) has revised its economic growth forecast for the UK. In November 2016, the EC predicted a 1% growth in GDP, now it’s 1.6%. The EC claims, however, it was not wrong in claiming the post-Brexit horror scenario. It’s just that the impact “has yet to be felt”. The effects will now, presumably, be postponed until 2018.
Interestingly, this is not the first major opponent of Brexit to revise its scenario for the UK. The Bank of England (BoE) also was somewhat gloomy when its Governer, Mark Carney, stated the referendum “could possibly include a technical recession”. The BoE has been apologising numerous times now for the negative outlook on its own economy.
The same goes for the International Monetary Fund when Chief economist Obstfeld said in July 2016 “Brexit has thrown a spanner in the works,” with regards to economic growth in the world. Only three months later the IMF predicted the UK to experience the largest growth in GDP. In January 2017 the forecasts were again revised in a positive direction. These three institutions, EC, BoE, and IMF, are by far not the only ones revising their gloomy predictions on Brexit.
These revisions do not mean all uncertainty concerning Brexit is over. That much is stated by these institutions as well. Much is dependent on the manner in which the Brexit negotiations are conducted. If the remarks of the EU chief negotiator Verhofstadt are any indication, the source of this uncertainty might come from outside the UK. After all, it was Verhofstadt who stated that May had:
“announced a very radical Brexit because she knows that the European Union will never accept a situation in which the status of a country outside the union is more favorable than to be a member of the European Union,”
Sure, Verhofstadt is not openly out to punish the UK for quitting on his dream of a federal EU. However, making sure no one is better off outside the EU does sound like it. In that sense, the source of uncertainty mentioned by all these institutions is not coming from the UK. It would be coming from the Brussels bureaucrats who didn’t want to face reality. Now, with the revised numbers on UK economic growth, they will have to.