Occasional good news cannot disguise overall poor performanceby Alex Dean / January 29, 2018 / Leave a comment
What is the economic impact of Brexit? In the run-up to 23rd June 2016, economists the world over lined up to warn of the harm that a Brexit vote would inflict. Yet a year and a half on from that remarkable day there has been no apocalypse. Last week we learned that growth in the fourth quarter of 2017 surpassed expectations. The news followed an impressive few months for UK manufacturing. Some Leavers have claimed they were right all along. Remainers, of course, do not share the optimism, and point out that we have not yet left.
The latest news provides us with a good moment to take stock. How has the UK economy really performed since the vote? What are the signs? Are the Brexiteers right to celebrate?
Not quite. The weight of evidence suggests that Britain’s economy is falling behind. If it is not yet again the “sick man of Europe,” it is starting to feel rather under the weather.
The thing to focus on is not individual statistics but the overall trend. While some extreme Remainer predictions were flawed, and some parts of the economy are performing well, that does not mean that Remainers’ central message was wrong.
Britain has not yet left the European Union, but as a consequence of rising inflation triggered by the fall in the pound, real earnings have fallen for the past eight months. The pound looked to have recovered somewhat of late, but today, with the dollar stabilising, it has come back under pressure.
The weaker pound also partially explains that manufacturing boom, and it is worth noting that manufacturing accounts for just ten per cent of the UK economy….