Contrary to popular belief, it seems that the British economy isn’t performing too badly since the results of the EU referendum were announced back in June.
In fact, official figures released this week show that our economy is growing at a faster rate than many experts had predicted at this stage of the year. Third quarter growth currently stands at +0.5%, nearly double the +0.3% majority forecast.
By far the most dominant sector, the services sector – which includes transport, storage and communications – grew by +0.8% in the third quarter.
However, this is largely isolated growth that compensates for the fact that nearly all other major sectors shrank in Q3. As expected, construction fell sharply by -1.4%as we enter the winter season, while manufacturing and agriculture also contracted.
Transport was a major contributor to growth in the UK services sector
Although no official figures have been released on consumer spending, it’s highly likely that incredibly low interest rates and a weakened pound went some way to encourage overseas spending and investment for UK goods and services.
It’s still far too early to tell. Both ‘Leave’ and ‘Remain’ voters will argue that these findings support their respective points of view.
Of course, Brexit supporters are likely to view these figures as a sign that any warnings about a potential economic downturn were largely unfounded, and that Britain is in fact, benefitting from the decision to leave the EU.
However, those who voted to remain in the EU would argue that it is the drastic action taken by the Bank of England to encourage spending that has salvaged economic growth – and that any promises of sustained growth will soon be dampened as we enter 2017.
For the time being, both opinions are somewhat speculative and, given the fact that many economic experts failed to predict the current level of growth, we still cannot be sure of either the long-term or the short-term impact economic consequences of the Brexit vote.
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