Brexit triumph: Chart shows UK GDP growth forecast to beat Germany and USA by 2023

Brexit: UK has put itself in a strong position says Tim Groser

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GDP – the total market value of all goods and services produced within a country in a year – is used to gauge the economic strength of a country. In 2021, the UK’s GDP grew more than expected, despite low projections due to the coronavirus pandemic and Brexit knock-on effects, and this positive upward trend is forecast to continue.

A study, published by Statista, forecasts British GDP to grow by 1.65 percent in 2023.

The US is forecast for 1.39 percent growth for the same period, followed by Germany on 1.21 percent.

The chart shows the UK behind the collections Western European nations, on 1.74 percent, but remains leagues ahead as a standalone economy.

Forecasts such as this rely on a number of factors, including past performance, global trends and inflation – and they aren’t always correct.

For example, the UK proved in the second quarter of 2021 that GDP estimates can sometimes be too conservative.

In Q2 of 2021, UK GDP grew by 5.5 percent, the Office For National Statistics (ONS) said – when economists had forecast 4.8 percent as lockdown eased.

The same quarter saw the Eurozone GDP increase by 2.2 percent, compared to the United States’ 1.6 percent growth.

The ONS said the data had been adjusted to take account of more complete data from the health sector as well as an update of its sources and methodology for calculating output.

The revision means Britain was no longer the worst-performing economy among Group of Seven developed countries, when comparing GDP in the summer of 2021 with its level at the end of 2019.

The UK is now tied with Germany and above Italy for Q2.

The figures serve to provide a more complete picture of Britain’s swift economic bounce-back from its coronavirus lockdown earlier this year.

However, there are now signs of a loss of momentum, and while the 2023 forecast looks to keep the UK level with global competitors, it is still a notable reduction.

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Ruth Gregory, an economist at Capital Economics, said: “While the upward revisions to GDP are clearly welcome, Q2 was three months ago, and the recovery appears to have stagnated since.

“Even so, given that there is now thought to be less spare capacity in the economy that will only encourage the Bank of England to hike rates in the not too distant future.”

Last month, Bank of England (BoE) Governor Andrew Bailey said he thought the economy would regain its pre-pandemic level of output in early 2022 – a month or two later than the BoE had forecast in August.

Despite the slowdown, the British central bank has signalled that it is moving towards a first interest rate hike since the pandemic as warned inflation could reach five percent.

Last week, the PMI index rose to a three-month high of 56.8 in October, up from 54.9 the previous month.

The increase was driven by the services sector, which accounts for about 80 percent of the economy, with a corresponding index rising to a three-month high of 58.

The reading, based on interviews carried out between October 12 and 22, surpassed the 54 forecast by economists polled by Reuters.

The index, published by the research group IHS Markit and the Chartered Institute of Procurement and Supply, provides a measure of the health of the services and manufacturing sectors.

Chris Williamson, chief business economist at IHS Markit said the UK economy had “picked up speed again”.

But he added: “The record readings . . . will inevitably pour further fuel on these inflation worries and add to the case for higher interest rates.”

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