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Can we call it a comeback? Growth forecasts for UK economy upgraded for second consecutive month

Jake Cordell
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St Paul's Cathedral view across Millennium Bridge
Pointing up: None of the 21 economic forecasts made in September predict the UK economy will shrink over the course of 2017 (Source: Getty)

Economists are more confident about the UK's growth prospects than at any point since the EU referendum.

Despite today's downgrade from the Organisation for Economic Cooperation and Development (OECD), investment banks and think tanks that produce regular updates on the UK economy have upgraded their outlook over the past month.

According to a collection of 21 new independent forecasts, published by the Treasury, economy watchers are predicting the UK will grow by 1.8 per cent this year, up from expectations of 1.5 per cent in August. That puts the outlook for this year bang in line with the predictions made before the referendum.

They also expect the UK will grow by 0.9 per cent next year, nearly double the 0.5 per cent suggested by those who crunched the numbers back in July.

It is the second successive upgrade to the numbers, as post-referendum economic data continues to arrive showing the UK has not yet suffered a dramatic hit from the vote to leave the EU on 23 June.

However, while growth forecasts have been upgraded, economists believe the government will struggle to translate that into an improvement for the public finances. Figures this morning showed public sector net borrowing has missed expectations, with the government needing to plug a £10.5bn hole in August.

Read more: The UK economy is now smaller than France's

Analysts expect the deficit to hit £65.7bn in the next financial year, up from £59.8bn in July and £45.5bn before the referendum.

However, there was a large degree of uncertainty in the forecasts, with estimates for next year's growth ranging from 0.2 per cent to 2.5 per cent among those who have published forecasts in September. Economists for Brexit founder Patrick Minford was the most optimistic, while Goldman Sachs was the most downbeat.

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