LONDON (Reuters) – Britain’s economic system is more likely to do higher in 2018 than many forecasts counsel and the advantages of global development within the coming years will “easily dwarf” any hit from leaving the European Union, former Goldman Sachs economist Jim O‘Neill stated.
O‘Neill, a former Treasury minister who backed staying within the EU earlier than the 2016 referendum, informed BBC radio that Brexit was a “weird thing for the UK to impose on itself” but it surely was not the nation’s largest situation.
“I certainly wouldn’t have thought the UK economy would be as robust as it currently seems,” O‘Neill, who additionally beforehand labored for Goldman Sachs, informed the BBC.
”That is as a result of it seems to me some elements of the nation, led by the northwest (of England), are literally doing approach higher than individuals appear to grasp or admire.
“As well as this crucial fact, the rest of the world is doing way better than many people would have thought a year ago, so it makes it easier for the UK.”
Britain’s economic system, the world’s sixth-biggest, seems set to have slowed solely barely in 2017 when it most likely grew round 1.eight p.c, in line with economists.
Higher inflation attributable to the pound’s fall after the Brexit vote has pinched client spending energy and plenty of companies are cautious about what Brexit means for them.
While development has been much less impacted by Brexit than many economists forecast, Britain has grown extra slowly than different wealthy nations.
The Bank of England has forecast development for the UK of 1.6 p.c in 2018, however O‘Neill predicted stronger enlargement as he anticipated global GDP development of no less than four p.c.
A report this month by Cambridge Econometrics, an economics consultancy, steered Britain’s economic system could possibly be as a lot as three p.c smaller by 2030 than it might be if Britain left the EU with no transition or commerce deal.
“If that’s the worst that Brexit will deliver, then I wouldn’t worry about it,” O‘Neill informed the BBC in an interview aired on Monday.
”Now, my very own view is that if we go for a extremely arduous Brexit or a no-deal Brexit, we’ll most likely undergo greater than that three p.c.
“But if it is only 3 percent, what’s going on with the rest of the world – helping us – and with productivity improving, that will easily dwarf a 3 percent hit over 13 years, easily.”
He stated key sectors similar to automotive manufacturing and prescribed drugs nonetheless confronted threats due to the government’s plan to depart the customs union and the only market.
Reporting by Michael Holden; Editing by William Schomberg