ONS Figures Show the UK Economy Remains Healthy

Markus Kuger, Senior Economist, Dun & Bradstreet:

These latest figures show that the short-term impact of Brexit has not been as big as initially feared, and that the UK still boasts a healthy economy, despite the Brexit vote. However, although the figures provide positive relief for now, they do not clarify Brexit’s medium- to long-term impact. Indeed, recent PMI figures show that price pressures are slowly building in both the manufacturing and services sectors. As a consequence, and in line with other market watchers, Dun & Bradstreet expects a significant uptick in the harmonised CPI: after an expected inflation rate of 0.7% in 2016, our baseline scenario is that it will rise to 2.4% in 2017.

Until the post-Brexit implications become clear, businesses should adopt a calm and methodical approach, ensuring they can harness data and insights to manage business risks and identify smart opportunities to grow. We will have to wait many more quarters to assess the true impact of Brexit on the UK economy. We do not expect the UK economy to truly feel the reverberations of Brexit until negotiations with the EU are complete, a process that will start in early 2017 but which is unlikely to be completed until late 2018.

Author: Dylan Jones

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