The new Treasury-led Brexit forecasts have to be read in the context of their record at predicting what would happen in the immediate aftermath of a Leave vote.
The HMT prediction for GDP 3 months after the referendum was that “the UK economy would fall into recession” and contract up to -1%. It grew +0.5% in this period.
The Treasury told us: “The analysis shows that immediately following a vote to leave the EU, the economy would be pushed into a recession, with four quarters of negative growth.” The reality has been positive growth every single quarter since.
HMT forecast that in the two years following a Leave vote GDP would fall between -3% and -6%. GDP grew by 1.9% in 2016 and 1.8% in 2017, with better than expected growth in the final quarter. There is now no recession forecast.
On unemployment, they infamously said it would rise by between 500,000 and 820,000 in the immediate aftermath of the referendum. Unemployment fell again last week to a four-decade low.
And the Treasury said government borrowing would rise by up to £39 billion immediately after the vote. Instead borrowing for the financial year to date is down 12% on the same period last year. That’s the lowest year-to-date total since 2007.
Why would anyone believe the people who predicted this nonsense ever again?