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Brexit Britain: What has actually happened so far? Brexit Britain: What has actually happened so far?
(8 days later)
The UK may have voted on 23 June to leave the European Union but it is not yet clear what the country's path to Brexit will actually mean.The UK may have voted on 23 June to leave the European Union but it is not yet clear what the country's path to Brexit will actually mean.
Here we highlight the latest developments following the vote.Here we highlight the latest developments following the vote.
EconomyEconomy
Many economists prior to the referendum had been predicting an immediate and significant impact on the UK economy and consumer confidence should the country vote to leave the EU. But there has been little impact of the Brexit vote so far, according to the Office for National Statistics (ONS). Many economists prior to the referendum had been predicting an immediate and significant impact on the UK economy and consumer confidence should the country vote to leave the EU. But so far these predictions have not come to pass.
Official figures have not yet reflected the collapse in confidence predicted by some surveys since the referendum, though the ONS warned that we have not yet had official figures for the service sector, which accounts for more than three-quarters of the economy. The UK services sector grew 0.4% in July, much more strongly than expected in the wake of June's vote to leave the European Union, showing that consumers carried on spending as normal after the Brexit vote.
However, figures from a Markit/CIPS survey in August showed a record rise in the UK's services sector, suggesting that as a nation of shoppers we seem to be keeping calm and carrying on spending. A Markit/CIPS survey of UK manufacturing showed the sector rebounded sharply in August. Other figures from the Office for National Statistics (ONS) show economic growth accelerated faster than thought in the run-up to the referendum. Gross Domestic Product (GDP) grew by 0.7% in the three months to the end of June, up from the 0.6% first estimated.
There does seem to have been a decline in confidence in the small business sector. The first survey by the Federation of Small Businesses (FSB) since the Brexit vote showed more small and medium-sized businesses were pessimistic about the future than positive for the first time in four years. However, there does seem to have been a decline in confidence in the small business sector. The first survey by the Federation of Small Businesses (FSB) since the Brexit vote showed more small and medium-sized businesses were pessimistic about the future than positive for the first time in four years.
Meanwhile, international body the OECD has revised its 2016 GDP growth forecasts for the UK slightly upwards from 1.7% to 1.8%. However, it has cut the forecast for next year from 2% to 1%, saying: "Uncertainty about the future path of policy and the reaction of the economy remains very high and risks remain to the downside." Meanwhile, international body the OECD has gone back on its warning that the UK would suffer immediately from a Brexit vote and has revised its 2016 GDP growth forecasts for the UK slightly upwards from 1.7% to 1.8%.
However, it has cut the forecast for next year from 2% to 1%, saying: "Uncertainty about the future path of policy and the reaction of the economy remains very high and risks remain to the downside."
And the heads of two major Wall Street companies have warned that the UK financial services industry could be damaged by Brexit. Rob Kapito, head of one of the world's largest investment houses Blackrock, said there was "a lot of concern" in the financial community, while the president of investment bank Morgan Stanley, Colm Kelleher, said is bank's immediate concern was over whether to invest further in the UK.And the heads of two major Wall Street companies have warned that the UK financial services industry could be damaged by Brexit. Rob Kapito, head of one of the world's largest investment houses Blackrock, said there was "a lot of concern" in the financial community, while the president of investment bank Morgan Stanley, Colm Kelleher, said is bank's immediate concern was over whether to invest further in the UK.
Confidence among UK consumers improved in August, though it remains below pre-Brexit vote levels. And this confidence is reflected in our spending patterns: UK consumers made 168 million purchases on credit cards in July - this was higher than in June and the average of the previous six months. Consumer confidence has returned to pre-referendum levels in September with shoppers shrugging off concerns and continuing to spend. They have been helped by higher wages, low inflation, and the Bank of England's record low interest rates, according to GfK.
Its consumer confidence index is back to its pre-Brexit vote levels in September, jumping six points in its biggest monthly rise since June 2015.
This continued consumer spending is also borne out by UK retail sales figures. Sales have generally been rising for the past three years, and in August they were up 6.2% from the same month last year. "Overall the figures do not suggest any major fall in post-referendum consumer confidence," the ONS said.This continued consumer spending is also borne out by UK retail sales figures. Sales have generally been rising for the past three years, and in August they were up 6.2% from the same month last year. "Overall the figures do not suggest any major fall in post-referendum consumer confidence," the ONS said.
Inflation has gone up, with the Consumer Prices Index (CPI) rising to 0.6% in July, a rate unchanged in August. Raw material prices have risen, partly as a result of the falling pound, but the ONS said there was "little sign of this feeding through to consumer prices yet".Inflation has gone up, with the Consumer Prices Index (CPI) rising to 0.6% in July, a rate unchanged in August. Raw material prices have risen, partly as a result of the falling pound, but the ONS said there was "little sign of this feeding through to consumer prices yet".
Elsewhere, the eurozone economy is still expanding despite the supposed shock of the UK's Brexit vote. Eurozone economic activity was at its highest for seven months in August, according to Markit.
New prime ministerNew prime minister
David Cameron - who had campaigned for Remain - announced his resignation the day after the referendum. He was replaced by Theresa May, who won the shorter-than-expected leadership contest when rival Andrea Leadsom pulled out. Boris Johnson, who led the campaign to leave the EU, was made foreign secretary with his own leadership ambitions having been thwarted by his former Vote Leave ally Michael Gove.David Cameron - who had campaigned for Remain - announced his resignation the day after the referendum. He was replaced by Theresa May, who won the shorter-than-expected leadership contest when rival Andrea Leadsom pulled out. Boris Johnson, who led the campaign to leave the EU, was made foreign secretary with his own leadership ambitions having been thwarted by his former Vote Leave ally Michael Gove.
Mrs May's new cabinet also includes a Secretary of State for Brexit, David Davis, and an International Trade Secretary, Liam Fox. Mr Davis, Mr Fox and Mr Johnson all campaigned for Brexit and have roles focusing on it, but are reported to have clashed over the extent of their new responsibilities.Mrs May's new cabinet also includes a Secretary of State for Brexit, David Davis, and an International Trade Secretary, Liam Fox. Mr Davis, Mr Fox and Mr Johnson all campaigned for Brexit and have roles focusing on it, but are reported to have clashed over the extent of their new responsibilities.
Interest ratesInterest rates
Since the vote the Bank of England has taken a number of steps to boost the UK economy. It cut interest rates from 0.5% to 0.25% in August - the first reduction in the cost of borrowing since 2009 and taking UK rates to a new record low.Since the vote the Bank of England has taken a number of steps to boost the UK economy. It cut interest rates from 0.5% to 0.25% in August - the first reduction in the cost of borrowing since 2009 and taking UK rates to a new record low.
The Bank left its main interest rate at 0.25% in September but said another cut is still a possibility.The Bank left its main interest rate at 0.25% in September but said another cut is still a possibility.
The Bank has also announced a huge extension of its quantitative easing programme by an extra £70bn, and a £100bn scheme to force banks to pass on the low interest rate to households and businesses.The Bank has also announced a huge extension of its quantitative easing programme by an extra £70bn, and a £100bn scheme to force banks to pass on the low interest rate to households and businesses.
One effect of the interest rate cut is that it has exacerbated the growing pension funds deficit because of falling bond yields. As yields fall it reduces the incomes pension funds get from their investments.One effect of the interest rate cut is that it has exacerbated the growing pension funds deficit because of falling bond yields. As yields fall it reduces the incomes pension funds get from their investments.
CurrencyCurrency
The pound plunged dramatically on 24 June, the day after the referendum. Since then it has remained at significantly lower levels because of uncertainty about the economic outlook and the UK's relationship with the EU, hitting a three-year low of $1.2869 on 15 August.The pound plunged dramatically on 24 June, the day after the referendum. Since then it has remained at significantly lower levels because of uncertainty about the economic outlook and the UK's relationship with the EU, hitting a three-year low of $1.2869 on 15 August.
By 22 September the pound had bounced back against the dollar after the US central bank held interest rates and signalled a less aggressive path for rate hikes in coming years. The pound did bounce back slightly against the dollar in September after the US central bank held interest rates and signalled a less aggressive path for rate hikes in coming years.
Sterling is currently 0.4% higher against the dollar at $1.307. However, a year ago it was worth $1.57. But sterling is currently trading against the dollar at $1.29 - a year ago it was worth $1.57.
The pound was flat against the euro at €1.165 as of 22 September. A year ago it was worth €1.35. The pound has also fallen significantly against the euro. It is currently worth about €1.15. A year ago it was worth €1.35.
The currency's continuing weakness has been accentuated by the cut in interest rates and the Bank of England's economic stimulus measures.The currency's continuing weakness has been accentuated by the cut in interest rates and the Bank of England's economic stimulus measures.
One of the most immediate consequences of this was that it made foreign holidays more expensive for British tourists, while it has also increased import costs for manufacturers (see Trade below).One of the most immediate consequences of this was that it made foreign holidays more expensive for British tourists, while it has also increased import costs for manufacturers (see Trade below).
However, one beneficiary of cheaper sterling has been the UK's own tourism sector, as a weaker pound makes Britain a cheaper destination for overseas tourists. The travel analytics firm ForwardKeys says flight bookings to the UK rose 7.1% after the vote.However, one beneficiary of cheaper sterling has been the UK's own tourism sector, as a weaker pound makes Britain a cheaper destination for overseas tourists. The travel analytics firm ForwardKeys says flight bookings to the UK rose 7.1% after the vote.
Caissa Touristic, a tour operator specialising in Chinese travel to Europe, says it's seen a 20% increase in enquiries and bookings for the UK this summer compared with the same period last year, while Irish no-frills airline Ryanair says it has seen a rise in overseas visitors travelling to London, Manchester, Liverpool, Leeds and Scotland.Caissa Touristic, a tour operator specialising in Chinese travel to Europe, says it's seen a 20% increase in enquiries and bookings for the UK this summer compared with the same period last year, while Irish no-frills airline Ryanair says it has seen a rise in overseas visitors travelling to London, Manchester, Liverpool, Leeds and Scotland.
NegotiationsNegotiations
Mrs May has met some other EU leaders including Germany's Angela Merkel and French president Francois Hollande, but formal negotiations on the UK's departure from, and its future relationship with, the EU have yet to start. EU leaders have said Article 50 of the Lisbon Treaty - which sets in place a two-year exit process - must be triggered before negotiations can begin.Mrs May has met some other EU leaders including Germany's Angela Merkel and French president Francois Hollande, but formal negotiations on the UK's departure from, and its future relationship with, the EU have yet to start. EU leaders have said Article 50 of the Lisbon Treaty - which sets in place a two-year exit process - must be triggered before negotiations can begin.
The government has not yet set out in detail what it wants from the talks, with reported differences between key figures on the balance between free trade and immigration curbs. Mrs May has said she will not trigger Article 50 before the start of 2017 at the earliest.The government has not yet set out in detail what it wants from the talks, with reported differences between key figures on the balance between free trade and immigration curbs. Mrs May has said she will not trigger Article 50 before the start of 2017 at the earliest.
Hate crimeHate crime
There's clear evidence of a spike in hate crime since the 23 June ballot. Reported hate crime rose by 57% in the four days after the referendum, police say.There's clear evidence of a spike in hate crime since the 23 June ballot. Reported hate crime rose by 57% in the four days after the referendum, police say.
Some 3,219 hate crimes and incidents - alleged to have taken place between 16-30 June - were reported to police forces across England, Wales and Northern Ireland, according to revised figures published by the National Police Chiefs' Council. This represented a 37% increase compared with the same period in 2015.Some 3,219 hate crimes and incidents - alleged to have taken place between 16-30 June - were reported to police forces across England, Wales and Northern Ireland, according to revised figures published by the National Police Chiefs' Council. This represented a 37% increase compared with the same period in 2015.
The next reporting period, from 1-14, July, saw 3,235 reports of hate crimes and incidents. This was up only 0.5% on the previous fortnight but it was still a 29% increase on the same period in 2015.The next reporting period, from 1-14, July, saw 3,235 reports of hate crimes and incidents. This was up only 0.5% on the previous fortnight but it was still a 29% increase on the same period in 2015.
And 15-28 July saw 3,236 reports - virtually unchanged on the previous fortnight and up 40% on the same period the previous year. Police Scotland, however, has said this rise in reports has not been witnessed north of the border.And 15-28 July saw 3,236 reports - virtually unchanged on the previous fortnight and up 40% on the same period the previous year. Police Scotland, however, has said this rise in reports has not been witnessed north of the border.
It's impossible to tell to what extent the spike was about a rise in reporting and to what extent it was about a rise in actual incidents. What we do know is that most hate crimes typically go unreported. The government has announced a plan to tackle hate crime in England and Wales and police handling of such incidents will be reviewed.It's impossible to tell to what extent the spike was about a rise in reporting and to what extent it was about a rise in actual incidents. What we do know is that most hate crimes typically go unreported. The government has announced a plan to tackle hate crime in England and Wales and police handling of such incidents will be reviewed.
House pricesHouse prices
Uncertainty surrounding the Brexit vote failed to hit house buying in the UK, figures suggest, with a slight rise in transactions in August.Uncertainty surrounding the Brexit vote failed to hit house buying in the UK, figures suggest, with a slight rise in transactions in August.
A total of 109,630 properties were bought in the UK during the month, a very slight rise on a year earlier, HM Revenue and Customs data showed.A total of 109,630 properties were bought in the UK during the month, a very slight rise on a year earlier, HM Revenue and Customs data showed.
The Nationwide said that its latest figures show that annual house price inflation has fallen, from 5.6% in August to 5.3% in September. Between August and September, prices rose by just 0.3%, half the 0.6% rise in the previous month.
However, the number of homes for sale is at near 30-year lows, which is why the pace of house price growth has remained broadly stable. It's a view backed up by Bank of England figures showing the number of new mortgages being approved by banks and building societies falling to its lowest for a year and a half in July.However, the number of homes for sale is at near 30-year lows, which is why the pace of house price growth has remained broadly stable. It's a view backed up by Bank of England figures showing the number of new mortgages being approved by banks and building societies falling to its lowest for a year and a half in July.
The Royal Institution of Chartered Surveyors (Rics) recently said that the UK housing market had "settled down" after the Brexit vote, with sales and prices expected to rise in the coming months.The Royal Institution of Chartered Surveyors (Rics) recently said that the UK housing market had "settled down" after the Brexit vote, with sales and prices expected to rise in the coming months.
The above chart from Rics shows that on balance their respondents expect prices to fall over the next three months, while they expect them to rise over a 12-month period.The above chart from Rics shows that on balance their respondents expect prices to fall over the next three months, while they expect them to rise over a 12-month period.
It's a clearer story when it comes to commercial property. Demand for London office space has bounced back from a pre-referendum dip, according to the commercial property firm CBRE. The amount of space being taken by firms in the capital rose to almost a million square feet in July, up 24% on June.
MigrationMigration
All the figures on numbers of people coming to the UK date from before the Brexit vote happened.All the figures on numbers of people coming to the UK date from before the Brexit vote happened.
In the year to March net migration - the difference between the number of people coming to the UK for at least a year and those leaving - remained at near record levels, at 327,000. But this was slightly down on the previous year.In the year to March net migration - the difference between the number of people coming to the UK for at least a year and those leaving - remained at near record levels, at 327,000. But this was slightly down on the previous year.
The figures showed a slowdown in the numbers settling in the UK from Poland and seven other Eastern European countries - but that was offset by an increase in net migration from Bulgaria and Romania, which hit record levels of 60,000.The figures showed a slowdown in the numbers settling in the UK from Poland and seven other Eastern European countries - but that was offset by an increase in net migration from Bulgaria and Romania, which hit record levels of 60,000.
TradeTrade
Figures from the ONS suggest inflationary pressures are building for businesses bringing in materials from abroad. Materials and fuels bought by UK manufacturers rose by 7.6% in price. That was the fastest rise since December 2011, and compared with a rise of 4.1% in the year to July.Figures from the ONS suggest inflationary pressures are building for businesses bringing in materials from abroad. Materials and fuels bought by UK manufacturers rose by 7.6% in price. That was the fastest rise since December 2011, and compared with a rise of 4.1% in the year to July.
The price of goods leaving the factory also rose 0.8% in August, compared with a rise of 0.3% the previous month.The price of goods leaving the factory also rose 0.8% in August, compared with a rise of 0.3% the previous month.
Britain has long been running a trade deficit, meaning that overall we import more than we export.Britain has long been running a trade deficit, meaning that overall we import more than we export.
The chart below shows that we do sell more services abroad than we import - but this is not enough to counter the bigger deficit in the value of the goods we sell abroad, compared to the value of the goods we import.The chart below shows that we do sell more services abroad than we import - but this is not enough to counter the bigger deficit in the value of the goods we sell abroad, compared to the value of the goods we import.
In the month of the referendum, Britain's trade deficit widened to £5.1bn after imports hit a new high.In the month of the referendum, Britain's trade deficit widened to £5.1bn after imports hit a new high.
A weaker pound may help exporters cut some of this deficit as their products will now be cheaper, but it could also cause continuing inflationary pressures in the UK as it will put up the costs of imports and raw materials.A weaker pound may help exporters cut some of this deficit as their products will now be cheaper, but it could also cause continuing inflationary pressures in the UK as it will put up the costs of imports and raw materials.
ConstructionConstruction
The UK's construction industry seems to have recovered in August from a downturn that started just before June's Brexit vote. The latest Markit/CIPS UK Construction Purchasing Managers' Index rose to 49.2 from 45.9 in July, although the figure is still below the 50 mark that divides expansion from contraction.The UK's construction industry seems to have recovered in August from a downturn that started just before June's Brexit vote. The latest Markit/CIPS UK Construction Purchasing Managers' Index rose to 49.2 from 45.9 in July, although the figure is still below the 50 mark that divides expansion from contraction.
The uncertainty over what happens next acted as a brake on the construction sector during August, especially in terms of house building, the survey suggests. However, a number of firms say that sales have held up better than had been expected.The uncertainty over what happens next acted as a brake on the construction sector during August, especially in terms of house building, the survey suggests. However, a number of firms say that sales have held up better than had been expected.
Significantly these figures also indicate the sector has seen a further steep rise in the cost of raw materials, with input costs now rising at their fastest pace since July 2011.Significantly these figures also indicate the sector has seen a further steep rise in the cost of raw materials, with input costs now rising at their fastest pace since July 2011.
The Mineral Products Association, which represents firms making products such as asphalt and cement, said its figures pointed to an upturn in the three months ahead of the referendum but that activity was expected to flatten over the next 18 months.
JobsJobs
There was a slight fall in UK unemployment to 1.63 million between May and July which shows there is yet to be a "Brexit effect" on the jobs market, according to economists.There was a slight fall in UK unemployment to 1.63 million between May and July which shows there is yet to be a "Brexit effect" on the jobs market, according to economists.
The unemployment rate was 4.9%, down from 5.5% a year ago and little changed from August's rate, Office for National Statistics (ONS) data shows.The unemployment rate was 4.9%, down from 5.5% a year ago and little changed from August's rate, Office for National Statistics (ONS) data shows.
Elsewhere, a Markit/REC survey suggested the jobs market suffered a dramatic slowdown in July, with permanent hiring dropping to levels not seen since the 2009 recession.Elsewhere, a Markit/REC survey suggested the jobs market suffered a dramatic slowdown in July, with permanent hiring dropping to levels not seen since the 2009 recession.
When it comes to individual firms the picture is mixed.When it comes to individual firms the picture is mixed.
Renault-Nissan boss Carlos Ghosn has told the BBC that its Sunderland plant would lose competitiveness if Brexit eventually means that the UK ends up trading with Europe under WTO rules - because this would effectively add 10% to the price of a UK-produced car, because of EU import tariffs.
The world's biggest security firm, G4S, warned that the UK's workforce and economic growth might shrink, and one of Britain's biggest banks, Lloyds, has accelerated its job cuts, axing a further 3,000 posts - although it said it had made this decision before the referendum.The world's biggest security firm, G4S, warned that the UK's workforce and economic growth might shrink, and one of Britain's biggest banks, Lloyds, has accelerated its job cuts, axing a further 3,000 posts - although it said it had made this decision before the referendum.
Elsewhere Japan's Softbank said it was buying the UK microchip-maker ARM Holdings for £24bn, and would double the number of staff in five years, pharmaceuticals firm GlaxoSmithKline is investing £275m in the UK, while McDonald's is creating 5,000 new jobs.Elsewhere Japan's Softbank said it was buying the UK microchip-maker ARM Holdings for £24bn, and would double the number of staff in five years, pharmaceuticals firm GlaxoSmithKline is investing £275m in the UK, while McDonald's is creating 5,000 new jobs.