Spare us the foolishly pessimistic forecasts

Today the Treasury will throw in the towel over its stupidly pessimistic forecasts for the UK economy this year. I expect them to come  round to my view-and their view in March – that the UK econony will grow at least 2% this year, the fastest of the G7.

They should also recognise that next year the UK is likely to grow by at least 2% in line with their forecast of 2.2% in March.

If they persevere in wanting to be wrong, and slash their March forecast, the Chancellor should ignore the bad figures for tax and the deficit that results from any such forecast. The media should ask why the Treasury wants to compound their errors for this year with another foolish forecast.

 

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21 Comments

  1. SM
    Posted November 23, 2016 at 7:42 am | Permalink

    As I was half-listening to BBC1 tv news at 7am today, the commentator (standing in the cold outside No11 for added veracity) said something about the Treasury forecasting doom and despondency (my words) and mentioned Mr Hammond’s quote about the UK’s eye-watering debt.

    I’m looking forward to a thrillingly colourful day of facts, figures and opinions re the Autumn Statement.

  2. am
    Posted November 23, 2016 at 7:44 am | Permalink

    Foolishly pessimistic could be described as motivated reasoning a la Krugman. But admissions of mistakes are a rare thing. The spin on the good borrowing figures continues the Leave spin since the vote.

    • am
      Posted November 23, 2016 at 7:45 am | Permalink

      Sorry, should be remain spin.

  3. Ian Wragg
    Posted November 23, 2016 at 8:37 am | Permalink

    Really John. How naive of you. The whole remainiac playbook is centred around talking the country down.
    Today the BBC is endlessly pushing the economic downturn narrative.
    IDS wrote a good article yesterday about their tactics and I fear they will win.
    It’s only about 180 weeks till a general election and if we haven’t left the EU there will be a massive backlash.

  4. MickN
    Posted November 23, 2016 at 9:03 am | Permalink

    Can I just say that I hark back to a time when I looked forward to what the Chancellor was going to announce in budget statements. I deplore the way that now before he steps up to the dispatch box we all know what is coming via announcements in the media over preceding days.

  5. Denis Cooper
    Posted November 23, 2016 at 9:05 am | Permalink

    We’ll see. But if the Treasury forecasts are close to media expectations then I’m afraid we’ll just have to grit our teeth and accept that thanks to the disaster of Brexit it may take the government an extra year to balance its books. Yes, it might be a delay of a whole year, maybe even fifteen or eighteen months, before the Chancellor could announce that the government had finally achieved a small budget surplus. Of course that happy day has already been postponed at least once – maybe twice? – which was nothing at all to do with Brexit, and most people haven’t really noticed that making a huge difference to their lives; but this additional postponement will be quite different, this will be part of the economic catastrophe we are bringing on ourselves by voting the wrong way on June 23rd.

    #irony #sarcasm #satire

    • ian wragg
      Posted November 23, 2016 at 11:30 am | Permalink

      Denis, I’ve been married over 30 years and my wife is still promising to balance the budget.
      I think she may be a Tory.

    • Denis Cooper
      Posted November 23, 2016 at 3:08 pm | Permalink

      I find it difficult to know exactly what to make of this:

      http://news.sky.com/story/live-hammond-to-deliver-first-autumn-statement-10668467

      “The Government will have to borrow £58.7bn extra by 2020 because of the Brexit vote, the Chief Secretary to the Treasury says.”

      “Government puts Brexit hit at £58.7bn

      The Chief Secretary to the Treasury David Gauke tells Sky News that the Brexit-related extra borrowing is £58bn.

      Figures from the OBR put the blackhole in the nation’s finances at £122bn, but not all of that is Brexit-related of course.

      The OBR says that £58.7bn of that borrowing is Brexit-related.”

      So it will delay the balancing of the government’s books by a year or less.

      • zorro
        Posted November 23, 2016 at 6:51 pm | Permalink

        £58.7bn Brexit related? – what ridiculous nonsense from the swamp media….

        zorro

  6. MarvintheRobot
    Posted November 23, 2016 at 10:02 am | Permalink

    Various newspaper reviews over the past week on TV suggest most if not all of Mr Hammond’s statement to Parliament today has been not so much leaked but given to the media in advance.One ex-Minister on such a programme nearly shushed a journalist for nearly letting that particular cat out of the bag.So Mr Hammond could very well be wasting time of all concerned when he speaks to Parliament.

    # He’ll give more money in effect to the lowest earners.
    # Make ineffectual proposals to do with housing lettings which buy-to-let companies withstock prices up over 2% just today in anticipation like Pavlov’s dogs
    #Be mournful, gloomy, sad, glum, almost a-suicide-on-legs about the prospects for the economy except with a small glimmer of light at the end of a tunnel going to the centre of the earth only if Odin, Thor, the Lord Buddha and God intervene and his lottery ticket and that of is dog wins the jackpot.
    # His “nothing” speech will nevertheless create hysterics on the Labour front bench on top of their normal oscillating states of mind. Don’t talk to them about Life.Nor Mr Hammond

  7. Antisthenes
    Posted November 23, 2016 at 10:06 am | Permalink

    It is as if the Treasury are deliberately producing false forecasts to wreak Brexit. Either that or they cannot accept that their economic modelling programs are rubbish. Bureaucratic thinking, rigid, uncompromising and self serving, the bane of our society.

  8. Peter Martin
    Posted November 23, 2016 at 10:38 am | Permalink

    These forecasts may turn out to be less foolish that is being supposed. The recent run of relatively good growth forecasts has been achieved on the back of high levels of private borrowing. We know from previous experience that a credit crunch can result when the banks get nervous, slow down their lending and then bring about the collapse they feared in the first place!

    Inevitably this will all be blamed on Brexit but really, it will have had to have happened anyway at some point. If the UK is running a current account deficit then someone in the UK has to fund that deficit by borrowing. The Govt hasn’t wanted to do the borrowing so it has pushed that responsibility on to you and I. The end result of all that is that we’ve priced the younger generation out of the housing market.

    So things do need to change but it won’t be a painless process.

  9. Statingthe Obvious
    Posted November 23, 2016 at 10:46 am | Permalink

    Chuka Umunna has already given his response to the statement not read yet to Parliament when he featured on CNBC this morning. It was elliptically stated by the journalists to him that his views were not those of what is predominantly Labour policy to which he gave his customary grin without answering directly to what he knew they meant.He ( Mr Ummuna ) will speak of the decline in the Pound and how this affects Vauxhall in particular as a counter to the notion that the declining Pound is good for exports.So, anyone wishing to counter-counter Mr Ummuna can now read-up on Vauxhall vis-a-vis export-import advantages and whether Vauxhall ( GM ) is likely to cut its investment in the UK as a result; forewarned is forearmed; like getting a statement in advance.
    If only the nation as a whole could get the Chancellor’s statement a week in advance like the Press and leading politicians.. We could use the information to buy stocks or sell them.Everyone in the nation, ever-y-one , every-one, as they say on the Hamilton play recently seen by Vice-present-Elect Pence , could advance in wealth. Be in the IN crowd instead of the OUT crowd.

  10. WordUpdate
    Posted November 23, 2016 at 11:46 am | Permalink

    22/11/2016: Mr Stephen Moore, Senior Advisor to Trump, was interviewed via video link by Sky News journalist Mr Dermot Murnaghan at 7.35pm onwards.

    He was asked about the alleged intervention by Mr Trump…his alleged suggestion that Farage should be Ambassador to the USA. Mr Moore laughed.

    He gave a parallel answer, openly not answering.

    Well, he could not of course answer without placing “British” “analysis” into embarrassing question…especially when that “analysis” and “understanding” goes right into the centre of Mrs May’s Cabinet team.

    Perhaps Mrs May should employ a few Americans ( not ones with political bias, to listen and read American statements with especial emphasis in this day and age of the possible particular role of a full-stop ( a period ) in tweets which, has already been indicated for years,can be problematic for a reader as it can impart at least cognitively within the framework of a tweet the complete end to a sentence ( noting journalistic sentences do not necessarily use it this way, always.)But, can indicate a colon or indeed an end to a cognitive paragraph or even the beginning of a new “chapter”, as it were, but related nevertheless to the preceding sentence.
    It all springs with brevity and that Twitter is for “friends” who… anticipate….in a kind of predictive-thought the meaning of necessarily incompletely typed thoughts of the sender of the message. A Prime Minister should not need this explaining to her.Certainly not by the likes of moi. See how far she has sunk!

    We can expect as a nation now,being humoured by American spokespeople who will speak, if necessary with us,- and kinda acknowledge Trump in his idiomatic way actually wrote what we think he wrote. Americans do that humouring of us more often than we would wish. They have to. Unfortunately.

  11. Muddle
    Posted November 23, 2016 at 2:40 pm | Permalink

    Mr Miliband’s contribution to the Chancellor’s Autumn Statement was not , in my opinion, wholly without merit. Some time ago when Mr Miliband was LP Leader as I recall, he was laughed at in Parliament for indicating, quite properly as a general view, that borrowing to make an investment in infrastructure is not a sin.

    Mr Osborne had the right idea to reduce the deficit and pay off debt. Though it also would have been a good idea if money now announced for provision of infrastructure had been done more in his term of office. Of course Mr Osborne never thought there would be Brexit. Nor did he make provision for it. Well it was a 50-50 toss of the coin: his usual method of determining what to do for the nation. He landed Tails on June 23rd. Perhaps like many Remainers he is now plumping for Best-out-of-three.

    It was right for Mr Hammond to politely commend the work of his predecessor Mr Osborne; yet, if Osborne had been right, he would still be Chancellor. If Osborne’s policies were good in their entirety Mr Hammond would not be now adopting Mr Miliband’s policies at least in part. One notices Mr Hammond did not exactly give a stinging retort to Mr. Miliband’s question. For that he should be praised.

  12. Quick
    Posted November 23, 2016 at 2:54 pm | Permalink

    Only bilateral agreements for EU countries under the Republican win in the USA are now available. The EU forbids it. We should Brexit as soon as possible and even pay the EU a fine for leaving the EU much earlier than possible under their rules. Negotiations may persuade them to do this as the EU will be short of funding for countries, small ones, like Estonia which depends on EU support ( 10% of which support and more at the moment comes from the UK ) We need to tap into the goodwill of the new Republican administration and make trade agreements asap. They will now, and are now, setting their stall out for world trade. They will not wait while the EU and the UK engages in sabre-rattling and nicey-nicey protocols with “complicated trade negotiations”. It is not the American way. We should know that. Leaving the EU fast will compel the EU to act rather more quickly than their free lunches dictate.
    I’ve recently read an article in some magazine that the UK does not actually need to sign an Article 50 to leave. All we need to do legally, is merely notify them. So let the judges and the Remainers play about. Let’s get the hell out of the EU double-quick time!

  13. Roy Grainger
    Posted November 23, 2016 at 3:55 pm | Permalink

    The usual dismal forecasts and gloomy words from Hammond I see, trying to talk down the economy to make the forecasts right and scupper any Brexit that involves leaving the single market. Really the tactics are so obvious as to be laughable. The next step will be to induce one of the Brexit ministers to resign.

  14. 2017 UK Democracy
    Posted November 23, 2016 at 4:55 pm | Permalink

    Mr Chris Green, Tory MP for Bolton West, after the Chancellor’s Statement, used the Ten Minute Bill. He proposed that people should be required to furnish some form of ID before voting in a Polling Station. He indicated this was not a backdoor way of introducing IDs and, he stated his opinion as to why he thought it generally a good idea.

    I was very interested on who and why and if anyone would oppose it. Mr John Spellar, Labour MP for Warley gave many reasons he thought it bad including that he thought it an American idea; a Trump “Conspiracy Theory” and some other reason in relation to Mr Trump who championed the idea unsuccessfully for voter ID in the US Election.

    I shall not list all the reasons given for and against as this can be seen in good time in Hansard online. It is only fair both MPs are given the courtesy of having their views expressed in their own words or, more correctly in the edit of their words by Hansard with which they can no doubt formally agree or disagree as to the accuracy or otherwise.

    Anyway, the proposal of the Bill was carried and it will receive a Reading in the House on Friday 20th January 2017.

    Reply It is unlikely to become law

  15. MikeP
    Posted November 23, 2016 at 9:49 pm | Permalink

    Sadly the main TV News networks have headlined the extra debt, borrowing and lower growth as entirely down to Brexit, as though to underline their Guardianista view that older, uneducated, ill-informed and unsophisticated Brexiteers have delivered all these financial woes on the nation, and we haven’t even got through Article 50 yet !

  16. a-tracy
    Posted November 24, 2016 at 2:30 pm | Permalink

    What did the IMF and the OBR predict for the ten years from 2006 to 2016 how accurate were they?

  17. Oliver Bennett
    Posted November 26, 2016 at 9:41 am | Permalink

    So Redwood: you always denigrate reports that undermine the UK leaving the EU. Is there anything of disadvantage to the UK leaving the EU, i.e. the counterfactual being, if the UK stays in the EU, is there any advantage gained or retained by the UK? Your answer will be the same: no. It follows that your desire to leave the EU is founded on an unreasonable proposition: it must happen regardless of whether or not it is in the best interests of the people of the UK.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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