That Immediate Brexit Recession - UK GDP Growth 0.6%, Best In Developed World

Tim Worstall  

British Prime Minister Theresa May. (Credit: Leon Neal/AFP/Getty Images)

We can all cast our memories back that 9 months to the Treasury's report about the horrors that awaited us if we had the temerity to vote to leave the European Union. We'd have an immediate recession of course. George Osborne promised us instant tax rises and spending cuts. The actual result has been somewhat different. In 2016 the British economy did best among the developed nations:

Kathleen Brooks, of City Index, explains why today's GDP report is "significant":
Although the UK economy may have been the best performer in the developed world last year, 2017 is a new epoch, and Brexit risks to the economy are likely to materialise in the coming months.

Sure, the future might still be terrifying but we have seen through several cries of "Wolf!" already, haven't we? And we've fourth quarter GDP growth from the Office for National Statistics today:

Strong consumer spending helped the UK's economy to grow faster than expected at the end of last year.
The economy grew by 0.6% in the October-to-December period, the same rate as in the previous two quarters, according to an initial estimate from the Office for National Statistics.
The figure indicates that the feared economic slowdown following the Brexit vote has not materialised.

Not just not materialised, growth has accelerated since the vote.
Note, as always, that European GDP numbers are on a quarterly basis, not annualised as those in the US are. This one quarter figure therefore translates into 2.4% growth as the Americans would put it.

In 2016 as a whole, the economy grew by 2%, down from 2.2% growth in 2015 and 3.1% in 2014.

But note that if fourth quarter growth is 2.4% at an annualised rate and the rate for the year as a whole was 2% then the growth rate is accelerating toward the end of the year.
That is, the economic effect of the Brexit vote was exactly and precisely the opposite of what we were told it was going to be. How interesting is that? It's almost as if that Treasury report and associated statements from Osborne et al were merely policy based evidence making. Perish the very thought.