UK economy is top of the league!

So, against all the dire predictions, Britain's economy grew the most of any G7 nation in 2016. We are top of the league for growth despite all the Brexit uncertainty. Indeed, growth accelerated after the referendum, contrary to Treasury forecasts and the economy hit a 17 month high. Remarkable and enough to make Andy Haldane, the Bank of England's chief economist, suggest that forecasters were facing a "Michael Fish moment" over their mistaken projections. Except that in this case it was the other way round: the storm didn't come and so they look more like the boy who cried wolf.

It is quite remarkable that the UK economy proved so resilient through the post-referendum uncertainty. The strength and momentum in the economy is encouraging. But going "half empty" for a moment, we all assume that many businesses have deferred investments while they wait to see how things are going to pan out, which will hit future growth. This may be a bit pessimistic as Nissan and other large businesses have maintained their commitment and I can imagine many others deciding that they can't wait for the government to eventually get round to negotiating with Brussels and that they need to get on with it and can't leave decisions hanging. I'm sure part of the post-referendum boom (a slight exaggeration maybe, but remember the figures get adjusted upwards more often than downwards in the fullness of time) has been due to businesses deciding that they have to make hay while the sun shines and go for it while the going remains good. And EU migrants seeking work have continued to use freedom of movement to come here, ensuring our companies aren't constrained for labour despite our high level of employment. Indeed, companies may well have pushed to get people in while they can do so without having to leap over hurdles of red tape.

So nothing has actually changed yet. We are still in the single market and can take advantage of trade deals the EU has with other countries. London remains a financial powerhouse - and probably will whatever is negotiated with Brussels because of the expertise that resides there.

But of course in Aesop's fable, the wolf did eventually come.....

Data from the Times: http://www.thetimes.co.uk/edition/news/britain-has-worlds-top-economy-after-brexit-rt7j9lccb