January 22, 2020

Countdown to Brexit: U.K. Economic Indicators

by Tajinder Dhillon.

The United Kingdom plans on exiting the European Union by Jan. 31, 2020, which will be the third time Brexit has been delayed.

Uncertainty around Brexit has profoundly impacted business and consumer decisions and sentiment. The U.K. economy has slowed with 2020 real GDP growth expectations declining from 1.6% to 1.1%.  Manufacturing activity has declined as businesses adjusted to uncertain Brexit outcomes, while trade tensions between U.S. and China only further complicated future investment decisions.  Business sentiment in the U.K. has been on a secular decline with the latest index reading reaching lows not seen since the original referendum.

Sterling has been viewed as a barometer to sentiment around Brexit.  In 2019, sterling increased approximately 1% against the greenback. While seemingly insignificant, it suffered volatile moves throughout the year, declining almost 10% between March and August over fears of a “hard Brexit.”

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