The outlook is better, but Britain is still bottom of the economic class

The good news is that the UK economy is now predicted to shrink by a mere 0.3% this year, according to the IMF. The bad news is that this is still the worst performance in the G7.

The latest forecasts from the International Monetary Fund show that the UK economy is no longer expected to fall by 0.6% this year, but only by 0.3%. This is a sharp improvement, and makes it almost certain that despite the energy and commodities shock from the war in Ukraine, the UK economy will merely scrape along the bottom for a year or so, rather than actually fall into a recession. In 2024 it is expected to only manage growth of 1%, which is anaemic to say the best.

Yet there is little to cheer about in these forecasts. The UK’s weakness is sharply contrasted by the performance of Russia, which despite a massive war and crippling sanctions is thought likely to manage to grow by 0.7% this year and by 1.3% next.

When you can’t outperform Russia, in the middle of an international boycott of it and its exports, it is hard to put much of a positive gloss on things.

But it gets worse.

In fact, all the other countries in the G7 are expected to do better than the UK. The US will grow by some 1.6% this year, the IMF says, and by 1.1% next.

But the really interesting comparison is between the UK and Europe. We did, after all, decide to burn our bridges and our boats with regard to the EU. So we are surely due to boom as the continent slips into a slough of despond, bereft as it is of the benefits of Brexit which we shall shortly reap?

Er, no. According to the IMF, the Eurozone – known by Brexiteers as the corpse to which the UK is no longer shackled – will expand by 0.8% this year, or almost three times the UK’s rate and will do better than the UK next year as well.

Germany will shrink slightly this year but bounce back next , and France will manage to grow this year and next. Spain and Italy will also outperform the UK, over the next two years.

Some of the reasons for this are, of course, nothing to do with Brexit but it is a huge contributing factor. The loss of investment, the shortages of labour that almost every sector is complaining of, the red tape and costs at the border, the huge collapse in the UK’s trade, the uncertainty surrounding the UK’s future direction and its rules and regulations, these all add to the mess that this government has created.

But on top of all that, the paralysis and incompetence that Brexit has created at the very top of the UK’s government is making things worse.

Where is the new industrial policy, the investment by government in infrastructure, the new green technologies, the respected leaders, the big thinkers, the well-run departments?

Does pumping excrement into our rivers and seas, eviscerating HS2, chaos at our borders, threatening to break international and human rights laws and a collapsing NHS make people think, “This is somewhere I want to do business?”

The evidence suggests not.