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Brexit latest: How is the UK economy doing? Brexit latest: How is the UK economy doing?
(about 20 hours later)
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.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: Here we highlight the latest developments following the vote.
EconomyEconomy
The Bank of England has cut interest rates from 0.5% to a record low of 0.25% amid uncertainty over the Brexit process and worries about productivity and economic growth. It's the first cut since 2009. The Bank has also announced a range of measures to stimulate the economy and made the biggest cut to growth forecasts since it started making them in 1992. 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%, in the British Retail Consortium (BRC) and KPMG's latest survey. Helen Dickinson, the BRC chief executive, said the rise was not surprising, given that "little has materially changed" for most UK households since the referendum.
The UK's tourism sector has seen a boost since the vote, says travel analytics firm ForwardKeys. Flight bookings to the UK rose 7.1% in the four weeks after the vote, with higher demand from the US and Asia, as a weaker pound made Britain a cheaper destination for overseas tourists. And 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 vote.
Consumer confidence in the UK saw its sharpest monthly fall in July for 26 years, according to the market research group GfK. 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 the vote, with higher demand from the US and Asia, as a weaker pound has made Britain a cheaper destination for overseas tourists.
The UK has a 50/50 chance of falling into recession within the next 18 months, going through a "marked economic slowdown", says the leading economic forecaster, the National Institute of Economic and Social Research (Niesr). Last week, the Bank of England cut interest rates from 0.5% to a record low of 0.25% amid uncertainty over Brexit and worries about productivity and economic growth - the first rates cut since 2009.
Activity among UK manufacturers contracted at its fastest pace for three years in July, says the Markit/CIPS manufacturing purchasing managers' index. It showed a fall to 48.2 - a reading above 50 indicates expansion, below 50 indicates contraction.
HousingHousing
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.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".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.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.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.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.
JobsJobs
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.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."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.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.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.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.