Ernst & Young ITEM Club says leaving the EU will benefit people as companies will have access to cheaper international markets
AN EXPORT boom triggered by the plunging Pound will stop Britain falling into recession next year, an economic think tank declared last night.
Trade with the rest of the world will account for almost ALL of the 0.8 per cent growth in the UK economy in 2017, the Ernst & Young ITEM Club said.
Exports will rise at the fastest rate for nearly a decade.
But the experts warned Brits they face a tough two years as inflation triples and unemployment jumps by 400,000 to 2 million people.
E&Y chief economic advisor Peter Spencer told the Sun: “The odds are that we will avoid a recession.
“The Pound is acting as a cushion, a shock absorber and will see exports account for almost all the economy’s expected growth.
“But the uncertainty about our exit from the EU means a lot of businesses are unsure of their position. “That will hit investment and it’s also likely to curb hiring as well.”
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The forecast GDP growth of 0.8 per cent is HALF the 1.9 per cent likely for 2016.
It comes just days after Bank of England governor Mark Carney said the low Pound would send food prices higher – because imports are more expensive.
High street chiefs warn the price of beauty and cosmetic products could also soar in the run up to Christmas.
E&Y predict inflation will hit 2.6 per cent in 2017, from the current 0.7 per cent, before easing back down again in 2018.
Exports are tipped to rise by 4.5 next year and 5.6 per cent in 2018.
The think tank adds: “Once the UK has left the EU, making use of the UK’s new found freedoms to access cheaper international markets will benefit consumers.”
But Mr Spencer warned: “Trade performance in 2020 and beyond will depend critically upon the terms that can be agreed with the EU27 and other countries.
“If the UK is not going to get unfettered access to the EU market, it is vital that we get unfettered access to cheap world markets in food and manufactures.”