Brexit’s Impact On The UK So Far
It’s now been precisely 109 days since Brexit officially came into effect, so how has the UK fared? We’ll take a quick look; then we’ll dig into the markets and see what’s coming up this week.
How has Brexit affected the UK economy?
The impact has clearly been felt by both people and businesses, although the pandemic has muddied the waters slightly- it’s hard to separate the Brexit impact from the covid impact on the economy.
New border formalities have impacted British exports pretty badly, yet things have improved slightly from the near disastrous scenes we saw in January.
Last month, official UK figures showed a record fall in trade with the EU in January. Goods exports dropped by a jumbo 41% and imports were slashed by 29% as the additional bureaucracy and sometimes unexpected costs and taxes took affect on businesses and individuals.
Figures released by Ireland’s Central Statistics Office showed that imports from GB fell by 65% in January compared to a year earlier. Recent German figures showed imports from the UK dropped by 56%, while exports were down by nearly a third.
Time to jump ship?
And things don’t look like improving any time soon, either. Just last week, Bloomberg revealed that over 440 finance firms — including 126 asset management firms, 81 banks and 65 insurers — have already shifted at least some of their business from the UK to Europe.
This shift has already amounted to roughly 7,400 job relocations and ca. 900 billion GBP of asset sales. Ouch.
It’s not all doom and gloom
Believe it or not, the UK economy returned to growth in February, even against the backdrop of Brexit and covid19.
The Office for National Statistics recently revealed that the UK’s GDP rose by 0.4% in February as the economy showed some nice signs of improvement following the 2.2% blip in January.
Retailers recorded a pickup in sales, while growth in car production fuelled a rise in manufacturing activity. Construction also grew pretty well.
Not only that, but according to a poll by research firm Ipsos MORI, it seems that the British public have seen no negative impact on their daily lives since Brexit came into effect, with 6/10 not noticing any difference.
Source: Ipsos MORI
So maybe things aren’t so bad after all?
Time will tell how heavy Brexit’s impact on the UK economy has been. One thing is undeniable, regardless of whether you’re the most ardent Brexiteer or a raging Europhile, surely all of us agree that the timing of Brexit couldn’t have been worse!
What’s going on in the markets this week?
Another interest-ing week in the markets ahead (you’ll get the joke in a minute). Here’s everything you need to watch out for.
Monday 19th April
● No major events are scheduled.
Tuesday 20th April
● GBP — Employment Change (JAN)
Wednesday 21st April
● NZD — Inflation rate YoY (Q1)
● GBP — Inflation rate YoY (MAR)
● CAD — Inflation rate YoY (MAR) + BoC Interest Rate Decision
Thursday 22nd April
● EUR — ECB Interest Rate Decision + ECB Press Conference
Friday 23rd April
● JPY — Inflation Rate YoY (MAR)
● USD — Markit Manufacturing PMI Flash (APR)
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