By Jamie Barrie M any Economists say the U.K. economy will be feeling the effects of the vote to leave the European Union which will limit the U.K.’s economic expansion. The vote was not the economic end that was the consensus among economists, but it is easy to speculate that it will have a prolonged effect. However, for now the U.K. economy continues to grow with recent figures showing a 0.7 percent increase in the fourth quarter of 2016. With Prime Minister, Theresa May still pushing for a hard Brexit, analysts still speculate scenarios with higher economic costs, but they will need to review the long term effects of mixed issues ranging from the fallout on trade with other countries, investments and London’s financial district will have on hiring, the country`s inflation rate and
demand for goods to have a better idea of the total impact.
Given all the doubt and speculation about Brexit, Price Waterhouse Coopers predict the U.K. will still outperform most other major euro-zone economies. Others are even more optimistic, with the Economists for Free Trade group seeing a boost from an “optimal” policy of scrapping import tariffs. How this will all play out will also influence Bank of England policy with Governor, Mark Carney saying recently that the various Brexit sce- narios with varying effects and potential outcomes from leaving the EU and losing free access to the world’s largest open trading bloc and these will be used to determine the U.K.’s potential growth, if and when interest rates rise and how fast.
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SPOTLIGHT ON BUSINESS MAGAZINE • MARCH 2017
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