Those hoping for some good post-Brexit news at the latest CESA Conference would have been disappointed, having heard BBC journalist and presenter Evan Davis’ predictions as part of his opening address.
Reporting that economists now feel investment growth will drop from last year’s 6.1% to an alarming 0.6%, he nevertheless advised delegates not to overreact to every bit of information, as it could be exaggerated.
But he also detailed that 2017’s economic forecasts make for grim reading too, with the 4.3% prediction of the pre-EU referendum period now downgraded to a contraction of -1.1%.
“Since WW2 the world has been moving towards globalisation, but has it now overreached itself?” Davis questioned. “Brexit is a pushback and Donald Trump does not like globalisation either.” He suggested that a reversal could adversely affect exporters and workers in poorer countries, while importers and blue collar workers in the west could benefit.
Nevertheless, he reassured the audience that: “Good economies have the ability to absorb shocks and adjust. The Pound has taken the strain from Brexit, so this means we need to be a bit cheaper if we are going to stay competitive.”
He also suggested: “Brexit could kill the City of London, however, in that scenario, manufacturing in the North would flourish. Or by being European we could say we have been tied to the world’s slowest growing economies. Why be a European hub when you could be a world hub?”
However, Davis revealed a very downbeat Treasury forecast for the UK’s fortunes, going forward – their best case scenario was that the economy would be 3.4% worse off, while the worst prediction suggested -9.5%.