The 2023 IMF economic forecast is just a forecast but offers a reasonable average of those from other institutions.
Europe is hardly seeing a boom but on the data above and Office For Budget Responsibility (OBR) figures, the UK is lagging. The OBR also suggest that government debt could be 300% of GDP by 2070, the chancellor suggests this will fall below 100%.
Reality may turn out to be neither of those but this is a hard time to be in government. Pandemic recovery, the Ukraine invasion, inflation, an ageing population and long term sickness raising costs, yet reducing tax income.
You could add borrowing costs to the equation but our stagnant economy is the core issue, a factor which demonstrates the best way out.
Freeing Up Trade
Some people call for tax cuts, or borrowing to invest, the government state that reducing inflation is the best way to stimulate growth. A third option is to increase trade without significant cost.
Current new trade deals look unlikely to do so but we have a long standing opportunity. Europe is our nearest neighbour and the infrastructure for trade is in place, along with the will on both sides.
Surveys the EU run amongst citizens show their main concern is greater European defence cooperation and they are pleased the UK remains on side. There is little animosity, more puzzlement on why politicians can’t build a bridge.
At the end of the day, most EU companies don’t really care if we are EU members. Trade with the UK has happened for millennia, they simply want this to be hassle free and profitable, to be good business.
Postponed regulations on exports from the EU to UK will soon cut in and the trials in the opposite direction are well known. Not desirable for either side, when more practical options could be agreed.
A Rational Example
The ATA carnets we supply are designed to encourage trade by making temporary exports trouble free. They are a global initiative and have nothing to do with a UK-EU agreement, yet work better than much which was agreed.
There’s a cost and a little admin but mainly in preparation, in use they enhance free movement. The same ethos could apply to most permanent exports and services, if freedom of trade were the focus, rather than politics.
Not that we have needed to join the single market, or customs union to use carnets. There are no reported issues, sovereignty, or regulation are not overridden, by a system designed to ease trade once in motion.
Other European countries deal more easily with the EU without being members. Renewing that aim could see the position manifestly improve.
Shared Benefits
Economic growth is good for most people, there are more jobs, higher wages and better returns for shareholders. The government receives more in taxes, allowing them to spend on growing the economy further, or cut taxes if they wish.
Those tenets apply in the UK or EU and are what most citizens wish for. They appreciate that life after Brexit will be different and there are complications to overcome but want prosperity to be the guide, rather than political views.
From around a 50% level of UK business for a long time, UK-EU trade had already fallen before Brexit and again since. An understandable outcome in one sense but there is no need for this to be the case.