Commentators were quick to leap on the IMF's latest report
Almost seven years on from the EU referendum and our tedious, unending national row over Brexit continues unabated, each side just as bad as they were during the campaign itself. Today’s gloomy report from the IMF is just the latest shot of vodka sustaining this now slurring debate, which has somehow never quite found a way to sober up long after everyone else has got up from the table and gone to bed.
Britain will have the worst economic growth in the developed world this year, according to the IMF, contracting by 0.9% while much of the rest of Europe pulls away. To many, it’s all Brexit’s fault, of course. Is anything not?
Yet at the same time, the very same IMF believes that Britain’s medium-term prospects are, well, fine — albeit distinctly mediocre. According to the body, British growth will likely stabilise at 1.5% by 2027, which is higher than that of Italy, Germany and the wider eurozone in general. Should we put much stock in this number? Probably not, but still, our national debate over Brexit should not bounce from hysteria over one set of forecasts from an organisation while ignoring another.
None of this means Brexit was a good idea, or indeed a bad one. That is a different question. Most economists believe Britain’s economic growth would have been stronger had the country voted to remain in 2016. But it didn’t. The banal reality is that since 2016 Britain’s growth has been mediocre and will likely continue to be mediocre for some time to come. But in this respect, Britain is not so different from most of its European peers. According to the OECD, between 2016 and 2024, Britain’s economy will have grown at almost exactly the same rate as Germany’s.
No serious economist believes Britain is going into recession this year because of — or even mainly because of — Brexit. Those who do are obviously doing so in bad faith. Economically, Britain was hit harder than most by the pandemic, just as it was hit far harder than most by the global financial crisis of 2007/08. It is worth pausing to ask why. Since then, Britain has gone through a series of rolling political crises in which one prime minister was removed in favour of another. The last then immediately sparked a currency and debt crisis by announcing sweeping tax cuts and spending pledges without any indication of how to pay for it. In response, a third prime minister came in and, in effect, promised even more austerity which the IMF now cites as a reason for its downgrade of Britain’s growth prospects.
What is so odd is that there are plenty of perfectly reasonable arguments with which to criticise Brexit. But it is plainly dishonest to take one year’s growth forecast and blame it on leaving the EU. Britain has had deep structural economic challenges for some time and will continue to do so. Like lots of other countries, Britain has lots of self-inflicted problems, whether you believe Brexit to be one or not.
But one of these self-inflicted problems, it seems to me, is that we are incapable of talking about them in a sober and dignified manner. Easier just to get another shot at the bar and hope the morning never comes.