The Bank of England (led by Governor Mark Carney, pictured) today upgraded it forecast for the British economy – saying they expected it to grow by more than expected next year.
The Bank of England today upgraded it growth forecast for the British economy next year – but warned borrowers to be braced for interest rate hikes.
Economists now believe that the economy will increase by 1.8 per cent next year – up from the 1.6 per cent they have previously predicted.
The Bank held interest crates at 0.5 per cent – but signalled borrowers should brace themselves for further and faster rate hikes after stronger-than-expected economic growth.
But it warned that earlier and fast interest rate hikes loom ahead as the economy performs better than gloomy Treasury predictions estimated.
The announcement is a boost for Theresa May and the Government who have hailed the economic strength of Brexit Britain.
And comes after a number of politicians admitted the official dire economic warnings about the economic impact of Brexit were far too gloomy.
David Cameron was last month caught on camera admitting that his doom-laden predictions about the impact of Brexit had been proved wrong.
The former prime minister appeared to disown Project Fear, saying that leaving the EU had not proved ‘a disaster’ and had ‘turned out less badly than we first thought’.
While former Treasury minister Lord O’Neill has also admitted he was wrong about how ‘robust’ the UK economy would be in the face of Brexit.
Lord O’Neill, who served under George Osborne and previously warned of serious damage from cutting ties with the EU, said he still believed it was a ‘weird thing for the UK to impose on itself’.
But he said Brexit was not the biggest challenge facing Britain, and he now believed the economy would perform better than expected over the coming years, helped by strong growth in China and the US.
The dire predictions of a housing crash and recession in the immediate aftermath of the historic vote have not materialised.
Speaking last month, he said: ‘I certainly wouldn’t have thought the UK economy would be as robust as it currently seems.’
‘That is because some parts of the country, led by the North West (of England), are actually doing way better than people seem to realise or appreciate.
‘As well as this crucial fact, the rest of the world is also doing way better than many people would have thought a year ago, so it makes it easier for the UK.’
The forecast is a boost for Theresa May (pictured outside No10 yesterday) and another blow to the economists behind Project fear at the Treasury who predicted Britain’s economy would take a battering after we voted to leave the EU