To help you understand the implications of doing business with the UK since the recent EU Referendum, we’re offering our customers a complementary UK Country Insight Snapshot report. Read on below for the introductory text, or submit the form to download your free copy.
On the economic front, post-Brexit referendum data coverage is still poor, making it next to impossible to predict the vote's short-term fallout. Preliminary consumer confidence figures show a significant drop (albeit less pronounced than during the start of financial crisis in 2008), while retail turnover data for certain stores is still relatively sound (although down on pre-23 June values). On the FX markets, the pound has recovered some of its losses against the euro and the dollar but is still significantly down compared with pre-referendum exchange rates; we expect it to remain weak throughout 2016-17. On the stock markets, the FTSE 100 (and the FTSE 250, which includes more medium-sized British companies) also saw upward movement in the first half of July; however, bank shares in particular are still below the values recorded on 23 June. All in all, we expect the country to enter a technical recession (defined as two consecutive quarters of real GDP contraction) in H2 2016. For the year as a whole, we predict real GDP to expand by 1.3%, followed by 0.4% in 2017, as uncertainty about the UK's Brexit decision will by then have fully fed through, especially to investment activity.