The UK may have decided to leave the European Union on 23 June, but what this will actually mean for the country’s economy, housing and jobs markets will only become clear in the ensuing months.
Here we highlight the latest developments following the vote.
Keeping Britain’s membership of the EU single market could boost the country’s economy by an extra 4%, the Institute for Fiscal Studies (IFS) has said.
The think tank has weighed up the benefits of staying in the single market compared with membership of the World Trade Organization alone. While leaving the EU would free the UK from having to make a budgetary contribution of £8bn, loss of trade could depress tax receipts by a larger amount, it said.
Warmer weather helped Britain’s retailers sell more in July than during the same period last year, defying predictions of a post-Brexit slump, with total sales up by 1.9%, according to a survey from the British Retail Consortium (BRC) and KPMG.
Helen Dickinson, the BRC chief executive, said “little has materially changed” for most UK households since the vote, so the rise was not surprising.
UK industrial output grew at the fastest rate for 17 years in the April-to-June quarter, up 2.1% compared with the first quarter of the year. The Office for National Statistics said “very few” respondents had been affected by the uncertainty from the referendum.
The UK’s tourism sector has also seen a boost, says travel analytics firm ForwardKeys. Flight bookings to the UK rose 7.1% in the four weeks after 23 June, as a weaker pound has made Britain a cheaper destination for overseas tourists.
Last week, the Bank of England cut interest rates from 0.5% to a record low of 0.25% and also announced a new round of government bond buying, as part of its quantitative easing (QE) programme to boost the economy.
But the Bank has since revealed that it missed its bond-buying target as it failed to find enough sellers – resulting in the return on some UK government debt turning negative.
House prices in the UK fell by 1% in July compared with the previous month, but were still 8.4% higher than last year, the Halifax has said. It is too early to tell whether the Brexit vote has had an effect on the housing market, it added.
In its latest Inflation Report, the Bank of England suggested that uncertainty both ahead of and since the referendum had “probably weighed on activity” in the housing market and predicted house prices would “decline a little over the near term”.
Activity in the UK’s construction industry fell for the second month in July, according to the Markit/CIPS purchasing managers’ index (PMI), with output shrinking at the fastest pace since June 2009.
Building suppliers firm Travis Perkins says the vote has created “significant uncertainty” in the outlook for its business. And London estate agency Foxtons reported a 42% fall in six monthly profits, as Brexit concerns hit the capital’s already faltering property market.
However, the Mineral Products Association, which represents firms making products such as asphalt and cement, said its figures pointed to an upturn in the industry.
The world’s biggest security firm, G4S, has warned the UK’s workforce and economic growth may shrink as a result of Brexit.
“Depending on the nature of the terms of the UK’s exit from the EU around the free movement of capital and labour, this could result in a shortage of skills or workforce availability in the UK,” said chief executive Ashley Almanza, as the company announced its half-year results.
However, the company added that it is “relatively well positioned, with around 80% of revenues outside the UK”.
The UK jobs market suffered a dramatic freefall in July, with permanent hiring dropping to levels not seen since the recession of 2009, says the Markit/REC report on jobs.
“Demand for staff remains strong with vacancies continuing to rise, but the sharp fall in placements suggests that businesses are highly cautious,” commented REC chief executive Kevin Green.
One of Britain’s biggest banks, Lloyds, has accelerated its job-cutting scheme, axing a further 3,000 posts and has doubled its planned branch closures – but says this decision was taken before the referendum.
Meanwhile, other firms have announced new jobs since the vote. Pharmaceuticals firm GlaxoSmithKline is to invest £275m in the UK, saying the country remains “an attractive location” despite Brexit.
McDonald’s is to create 5,000 new jobs taking its total number of employees in the UK to 115,000, but says “challenging economic conditions” remain. And London financial services company Tullett Prebon is creating 300 new IT jobs in Belfast.
Enter your email address for unsubscription.
Newsletter subscription! Add your email address and your name, than click subscription button.