Brexit effect (and Truss): UK is the only G7 economy to decline in 2023

All is well, says the International Monetary Fund. Except for Britain, which is expected to be the only major industrialized country to see its economy contract this year. It is the effect of the brief and disastrous premiership of Liz Truss and in general, the Brexit effect.

In addition to mounting political pressure on Prime Minister Rishi Sunak following the sacking of Conservative Party chairman Nadhim Zahawi, the Washington-based economic establishment today warned the UK: Expect, is the gist of its October World Economic Outlook update , that the British economy will contract by 0.6 percent this year. This would be a drop of almost a full percentage point less (0.9 to be exact) than forecasted just three months ago.

Despite the war in Ukraine and inflation, global economic prospects are less gloomy than a few months ago. “Global growth slows but is better than October forecasts.” Global GDP is expected to rise to 2.9 percent (a slowdown compared to 3.4 percent last year) this year to then increase to 3.1 percent in 2024. India confirms itself as the driving force of the world with a 2023 GDP of 6.1 percent and to 6.8 percent next year. China is doing well and Russia’s conditions under sanctions are even improving. In the G7, the United States and Japan are growing (growing by 1.8 per cent). As far as the Eurozone is concerned, the Fund expects growth of 0.7 percent this year (no exploits for Berlin alone: ​​Germany will be almost at a standstill this year and then accelerate in 2024). The only G7 nation not growing is Great Britain.

In its update to the WEO, a sort of six-monthly check of the “health” of the global economy, the IMF says its negative forecasts for London reflect higher taxes announced by Chancellor of the Exchequer Jeremy Hunt, the equivalent minister of the ‘economy, which replaced Kwasi Kwarteng (October’s Weo was written before the mini-budgets announced and then withdrawn by the then chancellor, which would have provided for a tax cut for the wealthiest); the interest rate hike by the Bank of England; tougher financial conditions for borrowers and still high energy prices.