RETAIL THERAPY
Shoppers helpt to keep the economy thriving despite the Brexit decision
BRITAIN’S HIGH streets are heaving with shoppers despite June’s shock vote to leave the European Union, big companies have reported few signs of distress and some tabloid newspapers are even talking about a post-Brexit economic boom.
The overwhelming view from economists is that it is too early to know how Britain will cope with years of Brexit uncertainty, but there is a growing belief the country can avoid a recession that only weeks ago was regarded as likely.
Retail sales in August reversed much of an immediate postBrexit vote fall, with retailers reporting their strongest sales in six months, industry data showed, partly due to a weaker pound attracting overseas buyers.
Official figures out last week showed the number of people
The fact the UK avoided a crisis does not tell us much about the future. Holger Schmieding, economist at Berenberg Bank
claiming unemployment benefit fell unexpectedly in July.
Before the referendum, the Government warned a Brexit vote would mean homeowners facing higher borrowing costs, pushing the economy into a ‘DIY recession’, and that equity prices were likely to fall.
However, nearly half of mortgage borrowers look set to gain from the Bank of England’s interest rate cut on August 4, while British equity markets have risen.
But most economists do not share this jubilance and caution these positive signals may have little bearing on the long-term outlook for the economy, which must contend with years of uncertainty as Britain extricates itself from the EU.
“The fact that the UK avoided an immediate crisis does not tell us much about the future,” said Holger Schmieding, chief economist at Berenberg Bank, adding he thought Britain would probably avoid a technical recession.