RAPIDLY approaching six weeks after the Brexit vote and, excepting musical chairs in the cabinet office, little has changed on the ground. In the ethereal world of financial forecasts, however, analysis has seemingly taken on a gloomier tint with each passing day.
The latest nihilistic Nostradamus to emerge from the shadows of a poky London office, shuffling a report sheet of impending doom, destruction and dismay, is the National Institute of Economic and Social Research (NIESR), who have now estimated that the UK stands a 50 per cent chance of blundering into recession by 2018.
One of many ‘thinktanks’ to have been made to feel somewhat worthwhile since the Brexit vote, temporarily basking in the warm glow of raw bewilderment, the NIESR claims that more than 300,000 jobs will be flushed down the drain by the third quarter of 2017, that inflation will rise above three per cent, and the government will be forced to borrow £47 billion on top of all its other expenses.
The economy is expected to slowly grind to a standstill, plodding along at 0.2 per cent this quarter, and struggling to hit even that depressing target throughout the remainder of the year.
“We expect the UK to experience a marked economic slowdown in the second half of this year and throughout 2017. There is an even chance of a technical recession in the next 18 months while there is an elevated risk of further deterioration in the near term,” said principal research fellow at NIESR, Simon Kirby.
His colleague Jack Meaning advised monetary policymakers to take a ‘sledgehammer’ approach in their fiscal response to the growing crisis, and the NIESR suggested that government intervention will be necessary to stimulate the economy through tax cuts or spending increases as higher unemployment and lower wages muffle consumerism.