The UK economy is picking up at speed. Incredibly, we’re beating the rest of the developed world, too. It’s a stunning turnaround.
Big global institutions didn’t predict it. They were too busy bemoaning Brexit. Mired in wrong-headed group think, they called the UK economy wrong again and again.
In May 2020, the Bank of England predicted the worst recession UK in 300 years. The BoE calmed down a little in 2022, claiming it would only be the worst recession in 100 years.
Last year was undeniably tough. We entered a brief technical recession in the second half of 2023. Over the year, GDP grew a meagre 0.1%. That’s still far better than the BoE’s forecast historic meltdown.
The International Monetary Fund (IMF) got it wrong too. It originally predicted the UK economy would grow just 0.5% this year, slower than everyone else.
We smashed that in three months, growing 0.7% in the first quarter of 2024, with the usually sober Office for National Statistics (ONS) saying we’re going “gangbusters”.
Yesterday’s ONS update showed the UK grew another 0.6% in the three months to June, which respected economist Yael Selfin of KPMG hailed as “another gangbusters quarter”.
Combined it’s a brilliant start to 2024 with total growth of 1.3% and more to come.
Last year’s brief recession is now a shrinking dot in the rearview mirror. And it all happened on former PM Tory Rishi Sunak’s watch, not that it’s done him any good.
Labour have inherited a far healthier economy than it’s let on, as we’ve grown faster than any other country in the G7 over the last six months.
Over the same period France grew just 0.6%, Italy climbed 0.5% and the German powerhouse edged up a pitiful 0.1%.
We even beat the supposedly booming US, which grew 1.1%.
This morning, Bank of America also raised its 2024 economic growth forecasts for the UK, from 0.8% to 1.1%.
Wake up! We’ve already beaten that with half the year still ahead of us.
Despite the good news, Reeves remains hellbent on hiking taxes. We know the official reason. She claims to have uncovered a £22billion black hole in the economy, bequeathed by those useless Tories.
Yesterday’s GDP data blows a hole in that.
As the economy grows, tax revenues will start pouring into Treasury coffers. Especially with income tax and national insurance thresholds frozen all the way to 2028.
That black hole could vanish without Reeves doing anything.
Unfortunately, she’s going to do an awful lot when she delivers her Budget on October 30.
Reeves looks set to hike capital gains tax, make inheritance tax more punitive and slash tax relief on pension contributions.
Rather than an essential emergency measure, Labour’s autumn tax raid is starting to look like an ideological assault, as it targets older people who have built up wealth over a working lifetime and typically vote Conservative.
Labour is doing four things that could crush the recovery: hiking taxes, scrapping infrastructure projects, scaring off wealthy entrepreneurs and appeasing the unions. If it does, then it will only have itself to blame.