Gloomy Brexit forecasts for Britain HAVE come true, insists IMF chief
IMF Chief, Ms Lagarde branded the figures “disappointing” compared to other advanced economies
GLOOMY Brexit economic forecasts for Britain have come true, IMF chief Christine Lagarde claimed last night - as its experts cut their growth outlook for the UK.
The International Monetary Fund issued a bleak prediction for Britain’s growth prospects yesterday and warned of potential Government spending cuts.
It forecast GDP as set to expand by only 1.6 per cent this year - lower than its previous estimate of 1.7 per cent.
And experts stood by previous forecasts for GDP to slow to 1.5 per cent in 2018, as Brexit uncertainty and the inflationary squeeze on household spending power put the brakes on the UK economy.
Ms Lagarde branded the figures “disappointing” compared to other advanced economies.
And she yesterday hit back at claims by Brexiteers that the IMF misjudged the impact of the referendum vote.
She said: “Since the start of this year, growth has slowed notably. The significant depreciation of sterling that followed the referendum has pushed inflation over three per cent squeezing real incomes and private consumption.
“Companies are also delaying some investment decisions until they have greater clarity about post-Brexit trade rules.”
She added: “Regrettably, the numbers that we are seeing the economy deliver today are actually proving the point we made a year and a half ago when people said you are too gloomy and you are one of those ‘experts’.
“Unfortunately we were not too gloomy – we were on pretty much on the mark.”
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But critics slammed the verdict – pointing out the IMF had in fact predicted Britain would be plunged into recession as a result of Brexit.
Leading Tory backbencher Jacob Rees-Mogg blasted: “The IMF’s forecasting record for the UK is hopeless and I suspect politically motivated by an arch French bureaucrat.”
Separately the IMF also welcomed “recent progress” in the Brexit negoitations but said ministers faced tough choices ahead if there was a loss of tax revenues from the financial sector coupled with slower productivity growth.