Forecasters got it wrong in some respects—but the economy could still take a beating over the coming yearsby George Magnus / January 9, 2017 / Leave a comment
Discussing the UK economic outlook in a TV studio interview recently, the economist I was debating turned to me at one point and said “Look, the economy’s fine, you should cheer up.” In one respect, of course, she was right. As the Bank of England’s Chief Economist Andy Haldane acknowledged last week, the pre-referendum warnings from the Bank, Treasury and others about a post-referendum “technical recession” proved to be way off the mark.
In another respect, though, she was, as the Americans say, whistling Dixie. She meant that I should cheer up about the economic prospects for the UK outside the EU over the next few years. To do that, though, you either have to have belief, which belongs in your preferred place of worship, or you have to have an idea about what drives growth, productivity and living standards. Belief may make you feel better, but won’t make things happen.
In the interim, what is the basis for reasons to be cheerful, and what, if anything, does it portend?
Evidence is good, as things stand