The Monday Briefing: Brexit Fears Ease

Last week two of the UK's leading economic forecasters concluded that Brexit is unlikely to cause a sharp slowdown in UK growth over the next three years. This is big news.

Last summer, in the weeks after the referendum, talk of the UK falling into recession was rife. Economists slashed their UK growth forecasts. By August economists expected GDP growth would fall away in the second half of 2016 as Brexit hit home. They saw the UK eking out meagre growth of 0.6% in 2017, the slowest since the recession in 2009.

Instead activity accelerated from the middle of last year and for 2016 as a whole GDP growth came in at 2.0%, the best of any major industrialised nation. Consumers kept spending and borrowing in the second half of 2016 and the services sector saw good growth.