Some of the most die-hard City pessimists appear to be eating their words as the economy shows no sign of the collapse many forecast before the referendum.
And a survey of the financial industry issued last night indicated that bosses are broadly confident of weathering the post-Brexit storm.
The growth figures came as pharmaceutical giant GlaxoSmithKline announced that they want to invest a further in Britain following the decision to Leave the EU.
GlaxoSmithKline (GSK) brushed aside Project Fear claims and announced that it is pumping £275 million into its three UK manufacturing sites, dubbing the UK an “attractive location” since the Brexit vote.
Chief executive Andrew Witty, who backed Remain and warned that investment would be pulled with a Brexit vote, has also performed an about turn.
He said that the UK’s “competitive corporate tax system” and skilled workforce helped the pharmaceutical giant come to its decision
Analysis yesterday of the Treasury’s monthly compilation of published forecasts indicated an improved outlook among City and independent forecasters.
On average, the economists forecast growth this year of 1.6 per cent, up from 1.5 per cent in last month’s report.
They now predict 0.7 per cent in 2017, compared to 0.5 per cent which they forecast in July.
The rise in GDP for the second quarter came in above economists’ expectations of 0.5 per cent, with many predicting the economy.
Barclays’ 2016 forecast is up from 1.1. to 1.5 per cent and Citigroup’s has gone from 1.3 to 1.7 per cent.
Some of the forecasts predate last week’s strong figures for record high employment and for the unexpectedly high growth in retail sales, which were 5.9 per cent up in July on the same month last year.
Mr Hammond also announced the £344 million expansion of City Airport which is part of the moves to improve Britain’s international connectivity as it looks to the rest of the world for business and not just Europe.
The number of people claiming unemployment-related benefits dropped in July, falling 8,600 to 736,300.
Consumer spending: up
Britain’s shoppers went on a spending spree in July, sending retail sales up 5.9pc compared with the same month a year ago.
Sales of goods such as jewellery and watches jumped particularly sharply, as well as shoes and vintage goods.
Consumer prices increased by 0.6pc in the 12 months to July, staying well below the Bank of England’s 2pc target.
Forecasts: no recession
The latest economic forecast from credit ratings agency Moody’s predicts the UK will slow down modestly, but will not enter a recession.