Boris Johnson: Lord Heseltine discusses future of Brexit
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Mr Jessop dismissed the “Brexit disaster” and “Tory catastrophe” narratives derived by pessimistic analyses on the economic future of the UK. The British economist argued, however, that the UK economy has actually grown more than any other G7 economy, bar Canada, in the first quarter of this year.
“The real sick man of Europe”, he argued, is Germany, as he pointed to a potential recession caused by Russia’s war on Ukraine.
Writing for the Daily Telegraph, he added: “Admittedly, the more timely monthly data show that the UK economy stalled in the spring. But other indicators suggest that, if we did have monthly GDP data for other countries, their figures would be at least as bad and in many cases a lot worse.
“For example, the latest purchasing managers’ surveys, published by S&P Global, suggest that output grew more quickly in June in the UK than in any other major advanced economy.
“The real sick man of Europe was Germany. Indeed, manufacturing order books and output expectations are relatively weak across the whole euro area.
“The latest numbers on inflation do not support the narrative that the UK is suffering more than other countries, either.
“Our headline rates are not much different from the average in the rest of Europe, or the US. Food price inflation is actually lower in the UK than in many other countries, notably Germany and the Netherlands (where it is already well into double figures).
“Producer price inflation is higher in the euro area than the UK too.
“Brexit pessimists therefore have to fall back on ‘core’ measures of inflation, stripping out both food and energy.
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“These measures have risen further in the UK than in the rest of Europe.
“But this can partly be explained by the relative strength of the economy here, and by the UK Government’s focus on helping households by topping up incomes rather than intervening to lower prices.”
Germany reported its first monthly trade deficit in three decades after the value of the country’s exports unexpectedly fell in May.
The EU biggest economy’s downfall risks the collapse of the entire eurozone.
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Daily Telegraph associate editor Ben Wright pointed out: “The trouble is, Germany is the only major eurozone country that has consistently run a current account surplus.
“The longer it continues to post deficits, the greater the strain on the currency, which is already approaching parity with the dollar.
“The UK and German economies might both be unwell.
“But the British malaise appears easier to cure. What’s more, the eurozone’s shared currency means Germany’s sickness could be contagious.”
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