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IMF and Treasury Predict WTO Brexit will be Fine!

Summary:
The IMF and Treasury produced reports in 2016 that closely analysed the UK and international economy.  The results of these reports should be read by everyone who is opposed to a No Deal Brexit.The IMF Country Report 16 on the United Kindom has this graph on p31 showing the process of Brexit. Fortunately the disastrous recession that the IMF predicted for 2017 did not happen. Notice that in the "Adverse Scenario" - the No Deal Scenario - the IMF calculated good growth after Brexit actually happens.The HM Treasury Analysis: The immediate economic impact of leaving the EU has a similar outlook to the IMF:  Notice that neither of these documents predicted a disaster after the UK actually leaves the EU.  In fact the IMF predicted good growth.Of course, we now know that both of these

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The IMF and Treasury produced reports in 2016 that closely analysed the UK and international economy.  The results of these reports should be read by everyone who is opposed to a No Deal Brexit.

The IMF Country Report 16 on the United Kindom has this graph on p31 showing the process of Brexit.

Fortunately the disastrous recession that the IMF predicted for 2017 did not happen.

Notice that in the "Adverse Scenario" - the No Deal Scenario - the IMF calculated good growth after Brexit actually happens.

The HM Treasury Analysis: The immediate economic impact of leaving the EU has a similar outlook to the IMF:

IMF and Treasury Predict WTO Brexit will be Fine!
 Notice that neither of these documents predicted a disaster after the UK actually leaves the EU.  In fact the IMF predicted good growth.

Of course, we now know that both of these documents were entirely incorrect. They do provide a good test of how indoctrinated you are.  Both documents are crystal clear that their predictions apply to the period between the referendum and actual Brexit.  If you are shrugging your shoulders and believing that the predictions actually applied to after Brexit happens you are indoctrinated.

If you believe that the Bank of England rescued the economy by printing money then firstly you should ask why the Treasury did not factor such a miracle into their predictions, secondly you should wonder why we ever have recessions if we can just print our way out and lastly both the IMF and Treasury predict a recovery just before and after a WTO Brexit (No Deal).  They do not predict that Brexit itself will cause an economic apocalypse.  They explicitly predict that as we get to actually leaving the EU we have little to worry about.

IMF and Treasury Predict WTO Brexit will be Fine!
 The graph above is a refresher of what actually happened after the Referendum - very little! Certainly no major recession.

OK, thpredictions described above are what is known as Project Fear Mk1. In Project Fear Mk1 the Treasury and its International pals attempted to terrify the population into voting Remain in the EU Referendum.  I am sure they believed that their bluff would never be called and the UK would vote Remain.

Howver, even though the IMF and Treasury predictions were badly wrong the broadcast media have scarcely covered this story of the "experts" being wrong about the EU Referendum.  This has encouraged the Treasury to have another go at Project Fear.

In 2016 the IMF, Treasury, Price Waterhouse Coopers and all the other pundits were saying that actually leaving the EU would have little effect on the economy (see graphs above).  Now that we have actually got to the moment when we should be leaving the EU they are relying on two factors to fool you again: firstly the suppression of how Project Fear Mk1 was totally wrong has worked with indoctrinated Remainers, secondly Remain Journalists and Economics Editors are such loathesome scum that they will not mention that the Treasury has completely blown its credibility.  You may think that "loathesome scum" is strong language but the failure to report the truth on such an important issue as the credibility of the Treasury on Brexit forecasting goes beyond mere mean bias.

Project Fear Mk2 has serious problems because none of the annual figures sound scary enough.  To generate fear the Treasury and others have had to assume that they can predict economic events accurately for 15 years.  On this basis it is possible to make a reduction in growth of, say, 0.3% a year into a 5% loss.

That no economist can predict GDP for 15 years into the future is not allowed to spoil a good story and confounding factors such as changes in population growth are just glossed over.  This is the imaginary picture that is being used to condemn a No Deal brexit:

IMF and Treasury Predict WTO Brexit will be Fine!
Most of the 5% imagined fall in GDP over 15 years is actually due to the population growing more slowly as the 600,000 immigrants  (1% of UK population) every year is reduced. This population effect does not make you or me poorer.

The use of Rabobank - a rabidly anti-brexit Dutch bank and the LSE CEP Dynamic model make it look like a No Deal Brexit could be awful. No-one believes these sources and they are seldom quoted elsewhere. Take them out of the reckoning and the worst that can be said about No Deal is that it might  slightly reduce GDP once population effects are subtracted.  Or it might not.  The predicted changes are so small at less than 0.3 per cent a year and extended over such a long period that they are absurd. ( See  GDP predictions are reliable only in the short term (Economist Dec 15th 2018) .


Project Fear Mk2 does not predict any major recession so why MPs are screaming that it will be an apocalypse is a mystery.

Perhaps they saw the Bank of England scenarios for a No Deal Brexit and failed to read the text accompanying the graphs that explained that they were not predictions:

“.. a worst-case scenario that could be associated with a ‘no deal no transition’ Brexit. The “disruptive” and the “disorderly” Brexit scenarios are therefore not forecasts for the economy in the event that the UK leaves the EU with no deal and no transition period.” (EU withdrawal scenarios and monetary and financial stability page 6).

They were actually stress testing scenarios and the Brexit No Deal scenario was less extreme than the usual annual scenarios used by the Bank.

So here we are. The BBC and other broadcasters are screaming that a No Deal Brexit must be avoided at all costs on the basis of no reliable economic data at all.  They are hoping that if they repeat the message enough they will make the impressionable believe it.

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