Economy - - Nov 17,2016
After the Brexit vote, the British’s economy, contrary to projections, has witnessed an increase of 0.5%. In the previous quarter, the Gross Domestic Product (GDP) growth was 0.7%, but the growth in this quarter assumes significance as a majority of analysts had predicted that the growth will be 0.3%. UK’s service division has played a key role in helping the UK economy grow in the three months from July to September after the dramatic Brexit voting in UK. A widespread worry among economists was that Brexit will seriously weaken trading relationships and growth while isolating the UK from international growth agreements and pacts that the EU is part of.
Although these are still early days to measure the impact of Brexit on the UK economy, the 0.5% growth in economy is symbolic for Brexit supporters. It also augurs well for investor sentiment, with some analysts making references to the classic British resilience. The growth in the first quarter after Brexit was supported by some solid performance in the service sector. The Bank of England (BoE) assumes UK economic growth to slow to 0.8% in the year of 2017, down from 2% this year.
UK’s Prime Minster Theresa May has said that she plans to launch formal Brexit talks between the UK and the EU before the end of March, and the negotiation process of two-year may discourage many companies from investing. President of the Exchequer Mr. Philip Hammond is ready to ease economic strategy next month in November. The UK government is in the initial stage of discussing the separation from the EU.
After the Brexit voting in June this year, many economist fully anticipated that it would push the UK into recession, however fresh retail trades and employment statistics have fostered a positive sentiment about the economy.