The International Monetary Fund upgraded its UK growth forecast again this year by more than any other major G7 economy. The pound hit a four month high against the dollar when Theresa May announced a snap election, which will take place on 8 June.
The prime minister applauded the UK’s economic resilience as it defied claims throughout Brexit campaigns that divorcing the European Union would result in severe economic strain. ‘Despite predictions of immediate financial and economic danger, since the referendum we have seen consumer confidence remain high, record number of jobs, and economic growth that has exceeded all expectations,’ said Mrs. May.
The International Monetary Fund previously forewarned of a potential stock market collapse that would stunt UK growth, during the referendum campaign in 2016. Current predictions see the UK growth forecast increase by 2 percent for 2017, from its original prediction of 1.5 percent earlier this year in January. ‘The 0.9 percentage point upward revision to the 2017 forecast and the 0.2 percentage point downward revision to the 2018 forecast reflect the stronger-than expected performance of the UK economy since the June Brexit vote,’ said the International Monetary Fund, ‘which points to a more gradual materialisation than previously anticipated of the negative effects of the United Kingdom’s decision to leave the European Union.’
Chancellor Philip Hammond has long championed the strength of the UK’s economy, promising that government policymakers would ‘continue to invest in the skills needed for a stronger and fairer Britain,’ promoting UK growth post-Brexit and beyond.
The strength of the global economy is also set to improve. According to the International Monetary Fund’s World Economic Outlook report for April 2017, ‘world growth is expected to rise from 3.1 percent in 2016 to 3.5 percent in 2017 and 3.6 percent in 2018.’ The Fund expects there to be risks in the medium term, however, particularly as a result of ‘low productivity growth and high income inequality’, which could threaten global economic integration.