A leading City lawyer believes that the IMF has unfairly blamed Brexit for a slowdown in global growth predictions.
This week, the International Monetary Fund (IMF) ditched its original forecasts for an upturn in global growth this year, citing the fallout from Brexit as one of the main reasons.
As it stands, the IMF still expects the British economy to grow 1.7% this year, down from a projection of 1.9% in April. The IMF cut its forecast for British growth in 2017 by 0.9% point to 1.3%.
According to Rufus Ballaster, a partner who leads City-based Carter Lemon Camerons LLP’s commercial property team, growth forecasts are more often wrong than right and he argues that Brexit cannot be blamed for everything.
“We... could sense a slow down before the Referendum result,” he said: “The IMF is looking at data rather than making political comment and it may genuinely accidentally be indulging in a bit of self-fulfilling prophesy. The reduction of growth prediction worldwide cannot be entirely due to fallout from Brexit. The UK is part of the EU and will remain so for at least 24 more months on current expectation. The growth prediction changes fall within that period.
“What the IMF is saying is that the sort of mind-set that leads the UK to have a 52% leave outcome to a referendum “in or out” has wider application and there is a very real risk of business being less global, less adventurous and more insular, resulting in more slow and steady growth.”
Mr Ballaster added: “Then again, Aesop has something to say about slow and steady as a good thing in his famous fable, The Hare and the Tortoise.
“Perhaps a global slow recovery with growth albeit near zero growth over a period is what the world needs in order to steady itself and reduce the risk of a crashing downward adjustment. Lawyers like things to be predictable and boring. Maybe that is why I’m not too worried about the idea of modest growth rather than a meteoric rise in the economy of the UK in the short-term - not that a drop from almost 2% to something closer to 1.5% is really the difference between a meteor and a geostationary satellite.”
He also applauds recent efforts to remind the whole world that London remains open for business and joins Sadiq Khan and others in promoting the reality that – in or out of the EU – this is a great country with amazing opportunities for those who do business from here or who chose to invest here from outside #LondonIsOpen
Mr Ballaster said: “Maybe we are hunting for bad news rather than enjoying the very real opportunities we have. Perhaps more people, especially those of us who work in SMEs, should work on #LondonIsOpen, rather than bewailing the end of the world as we know it."