What effect has Brexit had on the UK economy?

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What effect has Brexit had on the UK economy? Empty What effect has Brexit had on the UK economy?

Post by phildidge on Sun Feb 10, 2019 9:20 pm

There may still be more than a month to go until Brexit is scheduled to happen, but there has already been some fallout from the decision to leave.

Most recently, the prolonged uncertainty - what the governor of the Bank of England refers to as the "Brexit fog" - appears to be leaving some potentially worrying scars on prosperity.

What is clear, however, is that two-and-a-half years after the referendum, the most dire predictions about what could have happened to financial wellbeing have failed to transpire.

Rewind to May 2016. The then chancellor, George Osborne, warned of what he said would happen over the immediate period of two years following a vote to leave the EU.

He said: "A vote to leave would represent an immediate and profound shock to our economy. That shock would push our economy into a recession and lead to an increase in unemployment of around 500,000,

"GDP would be 3.6% smaller, average real wages would be lower, inflation higher, sterling weaker, house prices would be hit and public borrowing would rise compared with a vote to remain."

He was assuming Article 50, the process by which the UK leaves, would be triggered immediately after the vote; in the event, it was nine months later. But the warning stands.

Project Fear? Well, the economy hasn't contracted, and the level of unemployment is actually the lowest on record. But that's not to say that the economy's path hasn't deviated from what had earlier been expected.

Of course, there are other issues that will have influenced our economy's path - but the anticipation of the UK leaving the EU is far from insignificant.



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