1. Exquisite Tweets from @JohnSpringford

    PreoccupationsCollected by Preoccupations

    It's now 2 years since the Brexit vote, and we can tell what the Treasury's much-maligned short-term forecast got right. 1/

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    JohnSpringford

    John Springford

    It was too negative on output. According to our estimate, the economy is 2.5% smaller than it would have been if Britain had voted to Remain. The Treasury's 'shock' scenario had it at 3.5%. cer.eu/insights/cost-…

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    JohnSpringford

    John Springford

    It was a bit too negative about inflation. CPI peaked at 3.1% in 2017, which is about 1.5% higher than other advanced economies. It was far too negative about unemployment, underestimating the flexibility of the UK labour market.

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    JohnSpringford

    John Springford

    Real wages have flatlined since the Brexit vote. In Germany, real wages have grown by around 3% over that period. The Treasury got that about right.

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    JohnSpringford

    John Springford

    Sterling is down 9% from June 2016. Treasury said 10%.

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    JohnSpringford

    John Springford

    Our estimate of the hit to GDP translates into extra borrowing of £26bn. (That's according to the government's own estimates of the fiscal hit from weaker GDP growth.) The same as the Treasury forecast.

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    JohnSpringford

    John Springford

    Here's a podcast on our cost of Brexit estimate for those who don't want to move their eyeballs.
    Here's a podcast on our cost of Brexit research cer.eu/media/cer-podc… 7/7

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    JohnSpringford

    John Springford

    In short, The Treasury's 'shock' scenario got the path of GDP wrong - but not the cost. We have seen stagnation, not recession and bounceback. 8/7

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    JohnSpringford

    John Springford