Initial post-referendum data pointed towards a recession, as consumer and business confidence plummeted in July. But the August and September purchasing managers’ indices—surveys of companies’ output, sales, orders, and employment levels, which offer speedy (but incomplete) evidence of economic activity—bounced back, Aspen Review published by the Aspen Institute Prague says.
...The fall in the value of sterling will make British exports more price competitive, which will partly offset higher prices for consumers as food, fuel, and clothing prices rise. So the near-term reaction to the vote will probably be an economic slowdown while Brexit is negotiated, largely caused by declining investment, with macroeconomic policy and the exchange rate providing some stimulus to help the economy cope with the divorce. That is not to say that Brexit will not be costly in the long run. But the pain will be more chronic than acute, the author John Springford says.
Oxford Economics, a consultancy, reckons replacing single market membership with a trade agreement would cost the UK between 0.75 and 3 percent of GDP, depending on how comprehensive the trade deal is and how open Britain remains to immigration. Read full article (in English).
Meanwhile, the International Monetary Fund has upgraded its economic forecasts for the eurozone and the UK this year, but said British growth would slow down in 2018.
29th March 2021
21st January 2021