BRITAIN’S economy is now on course to beat Germany’s, despite German Chancellor Olaf Sholz and pro-EU campaigners and politicians claiming that Brexit would send Britain into a downward spiral.
The German economy unexpectedly contracted in the first three months of this year, marking the country’s second quarter of contraction, which is one definition of recession.
Remainers who predicted doom and gloom for the British economy were embarrassed this week when new data revealed that Germany, the EU’s largest economy, is on the edge of recession.
Britain, dubbed the “sick man of Europe,” slapped anti-Brexit protesters in the face when the IMF declared London will outperform Berlin this quarter.
According to IMF Managing Director Kristalina Georgieva, “we’re likely to see the UK performing better than Germany, for example.”
According to data issued Thursday by the Federal Statistical Office, Germany’s gross domestic product, or GDP, fell by 0.3 percent from January to March. This follows a 0.5 percent dip in Europe’s largest economy in the fourth quarter of 2022.
A traditional definition of recession is two consecutive quarters of contraction, but economists on the eurozone business cycle timing committee utilize a broader collection of statistics, including employment figures. Germany is one of the eurozone’s 20 member countries.
The country’s employment increased in the first quarter, and inflation has slowed, but rising interest rates will continue to impact on consumption and investment, according to Franziska Palmas, senior Europe economist at Capital Economics.
In the Daily Telegraph, economist Julian Jessop commented on the statistics, saying, “The failure of their predictions means that Remainer doomsayers have had to fall back on three other types of evidence.” Instead, compare the performance of the UK with other major European economies in terms of goods trade, business investment, or inflation. It is feasible to paint a bearish picture by carefully selecting the figures and time frames.
But there are alternative explanations (such as the different impacts of Covid and the energy crisis in each country) that have little to do with Brexit.
“The second trick is to rely on forecasts from bodies such as the IMF and OECD. There are many problems here. One is that these like-minded organisations have a negative view of Brexit, so this is bound to be reflected in their projections. It is also telling that the IMF has already had to revise up its 2023 growth forecasts for the UK by a full percentage point – and is now predicting that the UK economy will grow faster over the next five years than those of Germany, France or Italy.
The news comes after the first batch of post-Brexit trade deals kicked in.
UK businesses will be able to sell to Australia and New Zealand more easily as the UK’s trade deals with the countries, the first negotiated from scratch since we left the EU, come into force.
Under the deals’ beneficial terms tariffs on all UK goods exports to Australia and New Zealand will be removed, unprecedented access to these markets for services unlocked, and red tape slashed for digital trade and work visas.
Each region and nation of the UK is expected to benefit. Tailored to the UK’s strengths, the deals are set to deliver an economic boost by driving bilateral trade up by 53% with Australia and 59% with New Zealand.
The agreements could also mean reduced prices for UK consumers on favourites such as wine, Tim Tams and kiwi fruit and lowered costs on machinery parts for UK manufacturers.
The announcement comes after the UK, Australia and New Zealand completed their domestic ratification processes, allowing the deals to enter into force. In the UK this required primary legislation in the form of the Trade (Australia and New Zealand) Bill.
Business and Trade Secretary Kemi Badenoch said:
Today is a historic moment as our first trade deals to be negotiated post-Brexit come into effect.
Businesses up and down the country will now be able to reap the rewards of our status as an independent trading nation and seize new opportunities, driving economic growth, innovation and higher wages.
International Trade Minister Nigel Huddleston will tour DHL’s Southern Distribution Centre near Heathrow to see off two handpicked consignments of UK goods, some of the first to be sent to Australia and New Zealand under the new deals.
Iconic British goods from across the country including signed Beano comics, Penderyn Single Malt Welsh Whisky, Brighton Gin, The Cambridge Satchel Co. bags and Fever-Tree mixers are all among the items which will be sent from the UK government to the Australian and New Zealand trade ministers. Many of the items included will benefit from the removal of tariffs under the deals.
The parcels will also include an England cricket top signed by James Anderson and Emma Lamb, a Wales rugby shirt signed by the men’s team and a real tennis racket from Gray’s of Cambridge.
Minister for International Trade, Nigel Huddleston, said:
It is incredibly exciting to be visiting DHL to see some of the first shipments leave the UK, knowing that when they arrive Down Under they will benefit from our brand new deals.
Australia and New Zealand are two of our closest friends and likeminded partners and our trade deals secure favourable terms for British exporters, removing tariffs on all UK goods and slashing red tape.
Alongside the new trade agreement with Australia, more young Brits will benefit from life-changing opportunities Down Under thanks to the expansion of our shared Youth Mobility and Working Holiday Maker visa schemes. On 1 July 2023 the age limit for UK applicants going to Australia will go from 30 to 35 years old, and from 1 July 2024 Brits will be able to stay in Australia for up to three years without having to meet specified work requirements.
The consignments will be sent via express air freight with DHL, which is accelerating to low carbon operations with a commitment to reach zero emissions logistics by 2050 globally. Moving more than 100,000 shipments per day for UK businesses, Australia, New Zealand and other CPTPP countries are popular markets, with expectations for continued growth.