OBR upgrades 2017 growth forecast from 1.4% to 2.0%… Britain’s official economic forecaster was yesterday forced to admit it had been far too pessimistic about the effects of the Brexit vote. The Office for Budget Responsibility said it now expects the economy to grow by 2 per cent this year. That is far faster than the 1.4 per cent it pencilled in at the Autumn Statement in November, when it was accused of making ‘ridiculous’ assumptions about Brexit. With the economy growing faster than predicted, the OBR slashed its borrowing forecasts for the next five years, giving Philip Hammond a £24billion windfall… Economics professor Kevin Dowd, a member of the pro-Brexit group Economists for Free Trade, welcomed the OBR’s brighter outlook. ‘We are now seeing these establishment bodies finally catching up with the realities of our economic prospects following the Brexit vote,’ he said. – Daily Mail The OBR is still too pessimistic about UK growth this year – Graeme Leach for City A.M. Six reasons for UK resilience since Brexit vote – Chris Giles and George Parker for the FT (£) …with overseas shoppers giving a post-Brexit vote windfall to UK SMEs… British consumers’ spending habits have kept the UK economy growing since the Brexit referendum. But new data show shoppers from around the world have also contributed to Britain’s economic growth following the UK vote to leave the EU last June. There has been a surge in online shopping for UK goods after the Brexit vote sparked a sharp depreciation in the pound, according to PayPal, the payments company, with overseas consumers taking advantage of the fact that prices for many UK products have remained stable thanks to retailers and suppliers hedging their currency risk. Small and medium-sized businesses in the UK saw their international PayPal sales rise 34 per cent from July to December 2016, compared with the same period in 2015. – FT (£) …and a new study ranks the UK as the “third best country in the world”, after Switzerland and Canada A new study by the U.S. News & World Report questioned more than 21,000 global citizens about a number of different factors in 80 countries around the world, including quality of life, citizenship values and world power… In third place was the UK, despite the recent turmoil suffered by the country following the EU referendum. The country was praised for its contribution to the arts and sciences, which reflected in its high marks for ‘cultural influence’, scoring big points for being fashionable, prestigious, and influential. It also scored well in entrepreneurship, especially in its connectivity to the rest of the world, its well-developed legal framework and infrastructure. – The Sun Europhile Tories plot rebellion after Heseltine’s sacking Lord Heseltine’s sacking raises the stakes for next week’s House of Commons votes on Brexit, as Conservative rebels ponder whether to force a stand-off with the prime minister… One Tory MP considering rebelling said MPs were seeking assurances from Mrs May and David Davis, the Brexit secretary, that if the negotiations with the EU do not produce a deal, parliament will have a say on whether the UK leaves on World Trade Organisation terms. An undertaking from the prime minister would be sufficient to stave off rebellion, the potential rebel said, adding that MPs did not need such an undertaking to be written into the legislation itself… Anna Soubry, a pro-EU MP, has said she will vote against the government next week to try and obtain a “meaningful vote” for parliament before the UK leaves the EU. – FT (£) Michael Heseltine chastised after saying Brexit is ‘man-sized’ task for Theresa May – The Guardian Michael Heseltine sacking sharpens atmosphere at Westminster – Henry Mance and Kate Allen for the FT (£) The Guardian view on Michael Heseltine: he was right to rebel – The Guardian editorial So long Lord Heseltine, the Government is better off without your divaish dramatics – Charlotte Smith for the Daily Telegraph In sacking Lord Heseltine, Theresa May has missed an opportunity to show strength in magnanimity – Tom Harris for the Daily Telegraph (£) Liam Fox to meet dozens of Commonwealth ministers at international trade meeting in London Ministers from 34 Commonwealth countries will descend on London later as the Government hosts its biggest international trade meeting since the Brexit vote. International Trade Secretary Liam Fox hopes the event will boost relationships and open up talks for an African free trade zone. But some Whitehall officials fear the Government is placing too much expectation on countries that once belonged to the British Empire, and have mockingly dubbed the move “Empire 2.0″… There is nonetheless goodwill to the UK – and strength in long-standing relationships that predate its membership of the EU… Dr Fox will look to outline deals with a number of countries including Australia, New Zealand, India and Canada, who are all sending trade ministers to the meeting. – Sky News Theresa May to walk into ‘furious row’ over Tusk’s EU leadership at today’s EU summit… Theresa May will today walk into the middle of a furious row over the re-election of European Council president Donald Tusk, in what is set to be her final EU leaders’ summit before triggering Article 50… The summit may be overshadowed, however, by a diplomatic headache regarding Mr Tusk. Poland’s prime minister Beata Szydlo has written to Mrs May and other European leaders, seeking to oust Mr Tusk in a vote at the beginning of the summit… Mr Tusk, whose initial two-and-a-half-year term expires at the end of May, would be expected to play a key role in the Brexit negotiations and he believes he has the support of many EU leaders. But the bitter row between former Polish prime minister Mr Tusk and Ms Szydlo’s Law and Justice Party has led to Warsaw proposing a challenger for the job – Polish MEP Jacek Saryusz-Wolski. – Sky News Theresa May to blast Russia for plotting chaos in the Balkans as she urges EU leaders to take more action – The Sun EU leaders hoping to pledge “unequivocal support for the European perspective” for “fragile” Western Balkans – EUObserver (£) Europe divided: The maps which show how EU nations can’t agree on euro and defence – Daily Express …as Tusk pledges “fast and responsible” EU response to Brexit notification… European Council President Donald Tusk on Wednesday said EU leaders will respond to the British government within 48 hours of receiving official notification that the U.K is leaving the bloc. “When the U.K. notifies, it is our goal to react with the draft negotiation guidelines for the 27 Member States to consider. For this I think we need more or less 48 hours,” Tusk told a news conference in Brussels ahead of a European summit in Brussels on Thursday and Friday… “We are well prepared and our reaction after formal notification will be fast and responsible,” Tusk said. – Politico EU must avoid ‘suicidal’ trade strategy on Brexit, says Hungary’s top diplomat – Bloomberg Brexit talks are almost here. What do the EU nations really want? – Ian Wishart, Boris Groendahl and Zoltan Simon for Bloomberg …with the EU’s anniversary declaration is expected to warn of the “dangers of leaving” The EU plans to use its 60th anniversary celebrations in Rome to issue a warning that countries that leave the bloc will be “sidelined by global dynamics”, a leaked document reveals. According to a draft of what is set to become the Rome declaration, the 27 states remaining after the UK leaves will say that unity is essential in the face of unprecedented challenges. The EU does not plan to make a direct reference to the UK, but it will belittle the aspirations of those who believe there is a better future outside the union, according to the proposed wording. – The Guardian Draft Rome declaration softens reference to multi-speed Europe – EUObserver Britain faces £1.7bn EU fine over Chinese imports fraud The government faces a €2 billion bill from Europe for failing to prevent British ports being used as bases for fraud by Chinese gangs. The EU’s anti-fraud office has accused the government of ignoring repeated warnings that consignments of Chinese goods were being drastically undervalued, leading to the EU losing out on at least €2 billion (£1.7 billion) in customs duties in the past four years… [The anti-fraud body] Olaf said that the British frontier was responsible for nearly 80 per cent of the revenue lost to fraud in the EU last year… The accusation will put a dent in the reputation of Britain’s customs system, which is rated the fifth most efficient in the world and the third best in the EU by the World Bank. HM Revenue and Customs said it would challenge Olaf’s claims about the amount of lost revenues. A spokesman said: “This is not a bill, it is Olaf’s estimate of evaded duty, and not one that is recognised by our experts.” – The Times (£) EU loophole means children are denied life-saving drugs Children with cancer are being denied life-saving drugs because of a loophole in European Union rules, leading scientists have said. Dozens of medicines are never tested on children because regulations allow pharmaceutical companies to avoid costly trials, researchers said. They are urging ministers to help to reform the rules before Britain leaves the union… Paul Workman, [chief executive of the Institute of Cancer Research], said the EU must now take notice of a review that is being carried out. “This is a real chance for reform to prevent the current out-of-date approach from being cemented for a decade.” – The Times (£) Sturgeon says late 2018 would be ‘common sense’ time for second Scottish independence referendum The autumn of 2018 would be “the common sense time” for a second referendum if Theresa May rejects a bespoke Brexit deal for Scotland, Nicola Sturgeon has said. Echoing comments by her predecessor Alex Salmond, and going further than she has before on the potential timing of another vote, the First Minister suggested Scots could return to the polls just four years after rejecting independence in 2014. She and Mr Salmond both previously said it would be a “once in a generation” choice… SNP deputy leader Jim Sillars also warned this week: “I cannot conceive of the Yes movement winning in 2018 in the middle of [Brexit] negotiations. We would be subject to the cry from Westminster, ‘Why don’t you wait to see what the deal is?’” – The Herald ‘We have to see the final deal’: SNP MP says no independence referendum until after Brexit – Daily Express Iain Martin: An early election will help May deliver Brexit The reason she should take this most un-Mayish course of action is that she needs a robust mandate and could secure a thundering Commons majority to deliver Brexit and prevent future ambushes. Recent rebellions underscore that she is badly exposed with a small majority, just when the government is moving from the calm waters of the referendum aftermath, when the political mood was for tranquility, into the rough seas of the years of hard bargaining with Europe over our terms of departure… If the anti-Brexit forces want to blow up the process, then they must be blown up, at the ballot box. The best way to do that is for Mrs May to call an election this spring under a “back me to deliver Brexit” banner. – Iain Martin for The Times (£) Daily Telegraph: We still await a Budget for Brexit For a Chancellor whose overriding ambition is to equip the nation for life outside the EU, Philip Hammond’s first Budget was a missed opportunity… Mr Hammond was able to point to a much more resilient economy than the basket case foreshadowed by George Osborne a year ago in the event of a Brexit vote. Now the Chancellor needs to build the competitive and dynamic Britain that is able to flourish outside the EU. He can start in earnest with his next Budget in the autumn. – Daily Telegraph editorial Careful investment in preparation for Brexit – Daily Express editorial Brexit in brief The House of Lords can help Labour recover its voice on Brexit – Denis MacShane for The Independent EU citizens have a right to live in the UK – let’s keep it that way – Harriet Harman MP for The Guardian How not to negotiate Brexit — the essential guide – Philip Stephens for the FT (£) The 40 MEPs who matter in 2017: Syed Kamall MEP – Politico Four things you need to know about the Dutch elections – Pieter Cleppe for Open Europe Geert Wilders’s strength in the Dutch elections is greatly exaggerated – for now – Garvan Walshe for ConservativeHome How Fillon could still win over France – Pierre Briançon for Politico Eurocrats attack Britain’s flagship counter-extremism programmes – Daily Mail Net migration set to be almost double the Government’s target by 2020, warn experts – The Sun Pret a Manger: just one in 50 job applicants is British, says HR boss – The Guardian And finally… Jeremy Corbyn becomes the latest politician to confuse “Brexit” with “breakfast” We all know that Brexit means Brexit – but not if you’re Jeremy Corbyn, it seems… “Our economy is not prepared for breakfast,” Corbyn told the Commons – before quickly correcting himself… Corbyn can be reassured that his shadow chancellor John McDonnell also had trouble with the difference between breakfast and Brexit. – Steerpike for The Spectator Coffee House