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Will Britain Experience a Brexit Slowdown?

13 April 2017 by FC Exchange

There’s been plenty of speculation as to whether the UK economy will decelerate following last June’s monumental vote to leave the EU. Some banking giants and industry forecasters suggested that the British economy would even be suffering a slowdown to the point of recession.

However, UK economic data has remained quite resilient and headlines in the media have highlighted growth, rather than the initially expected contraction. What’s more, there’s been a definite upswing in forecasts for 2017 from a lot of major institutions.

Forecasting group, the EY ITEM Club, has recently changed its expectations and economists have suggested growth in 2017 will match that of 2016, growing by 1.8% – much more positive than the 1.3% forecast.

Chief economic advisor at the EY ITEM Club Peter Spencer commented: ‘The UK economy has been adjusting to life outside the EU since the referendum. Recent data suggest that the pound’s depreciation has boosted manufacturing, while inflation has subdued retail sales growth. Unlike 2008 when the pound last had a big fall, we are now selling into buoyant markets. Growth in world trade, which has been in the doldrums for several years, is now stronger than at any time since the initial bounce-back from the recession in 2010. This will be a big help in offsetting the headwinds from weaker consumer spending.’

Meanwhile, JP Morgan has also upped its forecast for UK growth in 2017, to 1.9%.

Disclaimer: This economic update is provided by FC Exchange a Global Reach Group Company, industry leaders in foreign exchange. Authorised affiliates are permitted to reuse content.

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