IT’S OFFICIAL: Brexit Britain WILL thrive out of EU as our economy SURGES ahead

Investment bank UBS, which was not part of the Treasury survey, also raised its forecasts as “the economy is proving resilient”.

Dean Turner, an economist in the bank’s chief investment office, said: “Following the leave vote, the economy appears to be performing better than feared thanks to a resilient consumer.

“Domestic sentiment has also been boosted by the swift appointment of Theresa May as Prime Minister, which prevented a prolonged political vacuum.

“Forceful intervention from the Bank of England, which unleashed a comprehensive monetary easing package, should also help.”

In the longer-term “many opportunities beckon in markets outside the EU, but negotiating favourable access to them and reorienting the economy to take advantage of them will take years. In the meantime, such significant change is likely to prove disruptive,” said the UBS economist.

Experts believe that the current optimism among businesses may partly be down to exporters already benefitting from the fall in value of the pound following the Brexit vote while importers have yet to pass on the extra costs to consumers.

Jonathan Loynes, at Capital Economics, said: “One possibility is that the economy is currently in a temporary ‘sweet spot’ in which some of the positive developments which we expected to cushion the impact of the referendum have been felt before the major adverse consequences.

“But that does not mean that the economy’s health is certain to deteriorate dramatically from here. For a start, while inflation is going to rise, we continue to think that the magnitude and duration of the increase will be relatively limited.”

Mr Loynes also predicted that exports will keep on picking up.

And he thought the Chancellor may try to simulate the economy with extra borrowing and spending on infrastructure projects.

Those factors should mean next year’s slowdown “should be limited and soon followed by a renewed recovery,” said Mr Loynes.

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