Some peo­ple want to move on from Brexit

The Irish Times - Business - - BUSINESS NEWS -

While in­ter­pret­ing UK eco­nomic data, it is best to re­mem­ber one thing. Brexit has not hap­pened yet. Pretty much ev­ery­one had ex­pected a sig­nif­i­cant hit to con­fi­dence and thus growth after the UK voted to leave the EU. But the UK econ­omy has kept chug­ging along, even if weak ster­ling and higher in­fla­tion cut con­sumer spending last year and meant GDP growth, at 1.7 per cent, was the slow­est among ma­jor economies.

The lat­est fig­ures sug­gest a fur­ther slow­down in the first quar­ter of the year, though the weather, rather than Brexit, is be­ing blamed. Man­u­fac­tur­ing out­put fell 0.2 per cent in Fe­bru­ary com­pared to the pre­vi­ous month. Con­struc­tion out­put also de­clined in Fe­bru­ary, fall­ing 1.6 per cent after a big drop in Jan­uary. UK GDP growth fore­casts for the first quar­ter are now be­ing trimmed from 0.4 per cent to 0.3 per cent or even 0.2 per cent, though man­u­fac­tur­ers say that as the Beast from the East snow­storm was to blame, out­put may bounce back.

Against this back­drop, the Bank of Eng­land is still ex­pected to in­crease in­ter­est rates again next month, fol­low­ing on from the quar­ter point rise in base rates to 0.5 per cent last Novem­ber, the first in­crease in a decade. But the Fe­bru­ary warn­ing from the cen­tral bank that the pace of in­creases could be faster than ear­lier an­tic­i­pated will be ques­tioned if the weak run of data con­tin­ues.

And hang­ing over this is the un­cer­tainty of Brexit. As the talks head into an­other crunch pe­riod in May ahead of the June EU sum­mit, any sug­ges­tion of a no-deal Brexit could af­fect con­fi­dence and in­vest­ment, par­tic­u­larly as it would scup­per hopes of a tran­si­tion pe­riod last­ing un­til De­cem­ber 2020.

What­ever about the shape of the UK’s exit, Euro­stat, the EU sta­tis­ti­cal agency, is start­ing to pre­pare. Its main eco­nomic ag­gre­gates for the EU – for GDP growth, un­em­ploy­ment and the like – are now be­ing pub­lished with all 28 current mem­bers counted in, and also in a sep­a­rate se­ries, with the UK ex­cluded.

This, Euro­stat says, is a re­sponse to “strong de­mand for such data from in­sti­tu­tional users as well as the gen­eral pub­lic”. Clearly, some peo­ple want to move on al­ready. If only re­mov­ing the UK from the EU was as easy as sub­tract­ing it from sta­tis­ti­cal data.

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