Brexit Update: BOE Finds Few Near-Term Impacts of Brexit

July 21st, 2016

BOE Finds Few Near-Term Impacts of Brexit

Contrary to the recent media coverage, the Bank of England (BOE) has asserted, “there was no clear evidence of a sharp general slowing in activity” in the United Kingdom’s (UK) economy following June’s referendum.  Despite a spike in uncertainty, property markets in free-fall, negative growth projections and a weakened British Pound, Phillip Hammond, Chancellor of the Exchequer, said the report results show “proof that the fundamentals of the British economy are strong.”  Most of businesses surveyed by the BOE’s regional agents said they did not plan to reduce investment or hiring. The report said, “the majority of firms spoken with did not expect a near-term impact.”

The long-term outcomes, however, may not be so optimistic, as other analysts predict a looming recession for the UK. The report found that one-third of respondents “expected some negative effects over the next twelve months, with reports of a ‘risk off’ approach to expenditures and some imminent plans for spending slipping.” The BOE is also expected to announce stimulus measures in August to prop up economic growth.

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Brexit Update

Exchange Rates

£1 GBP = $1.32 USD

€1 EUR = $1.10 USD

£1 GBP = €1.20 EUR

(as of 9:30 AM EST, 7/21/2016)

Top Stories:

France Rushes BrexitFrench President Francios Hollande is expected to tell German Chancellor Angela Merkel that his country would like to expedite the UK’s departure from the European Union (EU) in an upcoming meeting.

ECB Refrains from Further StimulusAs expected, the European Central Bank (ECB) said today it would refrain from cutting interest rates citing “encouraging resilience” in the EU’s economy despite the Brexit decision.

Retail Sales FallA GfK survey found retail sales fell about one percent in the UK in June. The decline was larger than expected and marked the biggest drop in six months.

Brexit Could Disrupt Digital StrategyThe UK government had announced earlier this year plans to release a new digital strategy. However, that strategy is likely to be delayed by the regulatory upheaval caused by Brexit.

Ireland Supports Speedy BrexitIreland joins fellow EU members, such as France, in calling on the UK to begin the Brexit process. In a joint statement with Hollande, Irish Prime Minister Enda Kenny said, “they look forward to the notification as soon as possible by the new British government of the UK’s intention to withdraw from the Union.”