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Optimism for growth in economy on the rise

By Ben Woods

Published 09/09/2016

PWC chief economist John Hawksworth
PWC chief economist John Hawksworth

Economists have brightened their outlook for the UK, upping their growth forecasts after Brexit uncertainty eased last month.

The shift in tone follows a resilient performance from gross domestic product (GDP) in the run-up to the Brexit vote, coupled with a string of surveys pointing to a rebound in activity following July's slump.

The Bank of America Merrill Lynch said Britain was on course to dodge a recession, as it raised its GDP estimates to 1.8% from 1.7% for this year and to 0.6% from 0.2% for 2017.

It said the UK economy had shown more resilience after a bad July, but warned that "better-than-expected data was not the same as strong data".

PwC has also revised up its projections to 1.8% from 1.6% for 2016 and to 0.7% from 0.6% for the year after.

It comes after Morgan Stanley and JP Morgan upgraded their economic expectations for the UK economy earlier this week, having cut their forecasts for Britain in the wake of the Brexit vote.

John Hawksworth, chief economist at PwC, said: "While we'll have to wait until late October for the first official GDP estimates for the third quarter, it's encouraging that indicators such as retail sales held up well in July and purchasing managers indices bounced back in August."

Economists slashed their growth expectations in the aftermath of the vote, while the Bank of England warned that a Brexit vote could cause a recession.

Belfast Telegraph

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