Brexit supporters round on gloomy UK forecasts

Brexit supporters round on gloomy UK forecasts

Former cabinet minister Iain Duncan Smith said the predictions from the government's budget watchdog, the independent Office for Budget Responsibility, had offered "another utter doom and gloom scenario" in its latest update on Wednesday.

LONDON: Official forecasts that Brexit will blow a £59-billion (S$105 billion) hole in the British government's budget drew fire from eurosceptics on Thursday (Nov 24), and even finance minister Philip Hammond said there was a "high degree of uncertainty" about the numbers.

Former cabinet minister Iain Duncan Smith said the predictions from the government's budget watchdog, the independent Office for Budget Responsibility, had offered "another utter doom and gloom scenario" in its latest update on Wednesday.

"The key thing is that the OBR has been wrong in every single forecast they've made so far. On the deficit, on growth, on jobs, they've pretty much been wrong on everything," Duncan Smith told the Daily Telegraph newspaper.

His criticism followed that of another eurosceptic lawmaker in Prime Minister Theresa May's Conservative party, Jacob Rees-Mogg, who told BBC television that "experts, soothsayers, astrologers are all in much the same category".

Hammond delivered his regular autumn mini-budget on Wednesday, presenting OBR forecasts for significantly slower growth and an extra £122 billion (US$152 billion) in borrowing in the period to 2021.

About half of that - £58.7 billion - is a direct consequence of Britain's decision to leave the European Union, according to the OBR, which blamed factors including lower migration, slower productivity growth and higher inflation.

In a round of broadcast media interviews on Thursday, Hammond said there was uncertainty over the figures given that negotiations on how Britain would leave had not even begun yet.

"The OBR itself makes the point very clearly in its report that there is a very high degree of uncertainty around the report they issued yesterday because of the circumstances we are in," he said.

"We should look at what the report is projecting, we should certainly not ignore that, we should look at it as one of the possible range of outcomes that we need to plan for," he told BBC radio.

Wednesday's figures outlined better-than-expected growth of 2.1 per cent this year, falling to just 1.4 per cent in 2017, and returning to 2.1 per cent in 2019.

Eurosceptic Conservative lawmaker John Redwood said they proved there was no post-referendum recession, as had been forecast by some during the campaign.

But he said the OBR was "probably still quite wrong about 2017", insisting that Britain would grow more strongly.

Much of the uncertainty surrounds Britain's future trading relationship with the EU, in particular whether it maintains access to the single market - something that EU leaders say cannot happen unless London gives up demands to control immigration.

Source: AFP

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