17 February 2017
Another strong week for the UK economy as growth forecasts were boosted and the labour market showed signs of continued good health.
Even the European Commission has backtracked on Brexit scaremongering, upping its growth forecast for the UK in 2017 as the Eurozone was found to grow at a mere 0.4% in the fourth quarter of 2017; there was good financial news as the FTSE continued to surge, investor confidence continued to grow, and finance firms refused to move staff to the EU; the labour market enjoyed record employment as wage growth was found to outpace inflation, employers expressed confidence about post-Brexit hiring, and the tech sector posted a record number of jobs after Brexit; a new report highlighted the huge cost of unskilled migration to the UK; and one of the UK’s biggest motor dealers eased concerns about price rises.
The European Commission were left red-faced this week when they admitted that the UK would grow faster than they expected in 2017, hiking their growth forecast for the coming year from 1% to 1.5%. They are the latest in a long line of bodies to perform an embarrassing U-turn on Brexit following the IMF and the Bank of England. It comes as the Eurozone was shown to grow at a mere 0.4% during the final quarter of 2016, being outpaced by the UK economy despite the supposed economic turmoil that should have been caused by our brave vote for national independence.
The stock market continued to enjoy the fruits of Brexit this month as it emerged that a whopping £400bn had been added to the value of the country’s 100 biggest businesses since our vote for Leave. The FTSE250 surged to a new record finish of 18,827.20 on Wednesday.
With so much happening in financial markets, it will come as no shock that Remain scare stories about job losses in financial services have been slapped down this week with EY’s financial services Brexit tracker showing only minor staffing changes in the sector. 10 percent of firms have gone so far as to re-affirm their commitment to the UK while most remain silent. “The number of financial services companies who have publicly said that they are making wholesale changes to their London operations is relatively small given the huge number of firms that comprise the sector” said Omar Ali from EY.
No wonder that investors are now at their most confident since June, with a new Lloyds Bank survey showing net investor sentiment at 6.1 percent, a 0.4 percent leap from January and a massive 3 percent leap since last February
Labour market figures have also shown UK employment hitting yet another record high. So much for those worries about 3 million jobs evaporating after Brexit. But while the number of people in work rose, the stats hid another story – the replacement of British-born workers by migrant labour, with the number of Brits in work on the downswing. The need for serious reform of our immigration system has never been felt more keenly, especially with a new report from Economists for Free Trade exposing the huge £3,500 cost of every unskilled migrant in the country.
A poll of 500 big names in business also showed positive signs for future recruitment too, pointing forward to a healthy future for the labour market. Two-fifths of those polled thought Brexit would be a boon for recruitment, with a further 26 percent predicting it will make no difference. With the IT industry posting 1.3m jobs in the sector last year – more than in any previous year – it’s no wonder that people are looking forward to what Brexit will bring.
Remainers were left on the back foot with inflation figures too. Expecting to see big rises in the cost of living, they were instead confronted stats showing wage growth outpacing inflation. The ONS reported that wages grew by 2.6% in the three months to December while inflation on the Consumer Price Index trailed at a mere 1.6% in the last month of 2016.
Remoaner hopes that Brexit would put a squeeze on people’s pay through price hikes would also have been upset by remarks by the boss of one of the UK’s biggest car dealers. Trevor Finn of Pendragon quashed rumours that car prices would rise this year by pointing out that “if they decide to put prices up they’ll sell fewer cars. We are finding that they are actually choosing to maintain volumes and we have no reason to see that changing.”
10 February 2017
New data showed big confidence in Brexit Britain’s economy this week.
Numerous surveys have shown huge confidence in the British economy, including from small businesses, the manufacturing sector, and investors. A new study by PwC has predicted that the UK can outpace the rest of the G7 in economic growth over the next three decades if it gets trade deals right – it’s good, then, that South Africa joined the chorus of our international allies and vowed to start trade talks as soon as possible.
Consultancy firm Bain & Company spied a £200m Brexit boost for British pharma and aerospace as UK car sales grew at their fastest pace in over a decade and Apple’s Tim Cook hailed the UK’s future outside of the EU; and Bank of America warned clients of an upcoming rise in sterling as Brexit fears fade and the underlying strength of the British economy become more apparent.
This is Money – Confidence in the economy hits 18 month high as businesses shrug off their Brexit fears
New data from the research group IHS Markit shows business confidence surging as we entered 2017, booming to 71.1 in January from 68.9 in December 2016 – where any value over 50 indicates rising optimism. The score is the strongest in eighteen months, showing faster growth in optimism than every month since August 2015. And additional data from the lender Hitachi Capital points to major small business confidence in the UK compared to their more pessimistic view of Europe’s future. 59% of small businesses surveyed saw opportunity in the UK, with only 20 percent seeing opportunity in Europe.
Manufacturing confidence sits at a near two-year high too according to new data from the BDO monthly trends report, and Institute of Chartered Accountants quarterly business confidence monitor. The BDO Optimism Index shows manufacturing confidence at 103.7 in January, up from 102.2 in December and well above the long-term trend. And a new poll of investors from IW Capital has revealed that nearly half expect Brexit to be positive for them in 2017. 44% believed that our vote for national independence will do well by them this year despite the horrific campaign of scare stories peddled by the Remainer media.
Telegraph – Top of the world: Britain to outpace G7 for ‘next three decades’
A new report from the huge professional services giant PwC has hailed Brexit Britain’s growth potential, forecasting that it could outpace the growth of the rest of the G7 for the next three decades if it gets post-Brexit trade deals right. They say Britain will grow at an average 1.9% a year between 2016 and 2050, more than the US and Canada and way ahead of Germany, France, Italy, and Japan – the last of which will see its growth rate doubled by Brexit Britain.
And it looks more and more like Britain will get post-Brexit trade right, with South Africa becoming the latest country to vow a deal as soon as Britain has left the EU. They’ve left Eurocrats flustered after promising to begin negotiations with the UK before we’ve even left the EU, regardless of mad EU rules that seek to block productive discussion.
The Times – ‘£200m boost’ for pharma and aerospace
We also learnt this week that two of Britain’s biggest export sectors – pharma and aerospace – could see a big boost from post-Brexit trading on WTO rules according to a new study from Bain & Co. Many have warned that a clean break from the EU without a bespoke trade deal with the failing bloc would be a disaster for the British economy, but the new study shows upsides for a reversion to WTO rules because key sectors of the economy will be protected by tariffs.
The motor industry enjoyed good news this week too as car sales grew at their fastest pace in over a decade. Car registrations in January were up 2.9% on December, driven by increased demand in the private sector – which saw a massive 5% rise.
Bloomberg – Apple Boss Tim Cook Optimistic About UK’s Future Outside EU
The CEO of tech giant Apple reaffirmed its commitment to Brexit Britain this week when Tim Cook visited Prime Minister Theresa May to discuss the future of the tech sector after our courageous vote for EU withdrawal. He reiterated his company’s plans to expand UK operations with a massive development at Battersea to which he intends to shift 1,600 staff – with room to grow in the future. “We’re a big believer in the UK” he said. “We think you’ll be just fine. Yes, there will be bumps in the road along the way but the UK’s going to be fine.”
Telegraph – Sterling may become ‘Swiss franc on steroids’
Bank of America has caused waves by forecasting big moves in the currency markets going forward as the false scares around Brexit evaporate and the underlying strength of the British economy once again comes to the fore. They believe the currency will dip to $1.15 against the dollar following Article 50 notice but will rebound to $1.35 – or possibly $1.40 – in the time that follows.
The new value of sterling has been a short-term boon for manufacturers who have seen foreign orders increase with the more competitive currency, but a revival in the exchange rate will prevent adverse effects such as cost increases across the supply chain.