UK firms cautious on jobs, house prices down after Brexit vote
"British employers have turned more cautious about hiring and the price of homes for sale fell by the most since late 2015, according to surveys that added to signs the economy has stumbled since the Brexit referendum.
But shoppers seem to have brushed off the shock of the June vote to leave the European Union, another survey showed, suggesting consumer spending will soften the hit.
Many economists believe Britain is heading for a recession followed by years of slow growth because of uncertainty about its future trading relationship with the EU.
Earlier this month, the Bank of England cut interest rates and took other measures to soften the impact of Brexit, which it believes will push up the unemployment rate sharply.
One of Monday's surveys showed the proportion of employers expecting to increase staffing over the next three months dropped from 40 percent before the vote to 36 percent after it.
The CIPD, a human resources group, and staffing firm Adecco Group UK & Ireland, also said one in five employers expected to reduce investment in training and skills as a result of Brexit, which will push up the cost of imports because of the fall in the value of the pound. Seven percent planned to invest more."
The falling pound pushed up import prices in July, which may herald a broader acceleration in inflation in Britain
"LONDON—A sharp fall in the pound since the U.K. voted to leave the European Union pushed up import prices in July at the fastest pace in five years, which may foreshadow a broader acceleration in inflation in Britain following June’s Brexit vote.
Import prices rose 6.5% on the year in July, the Office for National Statistics said Tuesday, the fastest annual rate of growth since 2011. That pushed up companies’ overall raw material costs by 4.3%, the quickest increase since 2013.
The acceleration in companies’ costs suggests price increases for consumers may be coming. Consumer-price inflation rose 0.6% on the year in July, up from 0.5% in June. That is still well below the Bank of England’s 2% target, but central-bank officials expect inflation to accelerate this year and next as sterling’s slide works its way through the economy. "
Dive in sterling after Brexit vote gave a strong boost to exports of manufactured goods this month, according to survey
Manufacturers have reported a fall in orders this month, but the slide has been less than expected after exports rose to their highest level in two years.
A survey by the business lobby group the CBI found that the dive in sterling, prompted by the vote to leave the EU, gave a strong boost to exports of manufactured goods that offset uncertainty in the domestic market.
The survey found that total order books were slightly weaker than in the three months to July, down from a balance of -4 in the three months to July to -5 in August.
But the overall picture was of an industry with orders that remained “comfortably above the long-run average” and with output growth “at a healthy pace”.
The sharp costs of Brexit will be felt soon enough
With apologies for asking the question yet again, what will the economic effects of the UK leaving the EU be? In the past fortnight, Brexit supporters have started to claim their optimism is being justified by a buoyant stock market and strong figures for jobs and shop sales.
If Britain in August participated in anything resembling political debate, “What was all the fuss about?” would probably have been the prevailing argument. The only honest answer to the question of Brexit’s effects is “Don’t know”, at least with any precision.
But the strongest clue has not come from the stock market or July’s unemployment and retail sales but from the currency markets. There, the message has been consistent and its implications have still to sink in.
On June 23, the day of the referendum, sterling reached a high of $1.50 and €1.31 shortly after polls closed. It then plummeted, and has since averaged at about $1.30 and €1.18. In trade-weighted terms, the pound is down more than 15 per cent from its level a year ago, when David Cameron, then prime minister, started the renegotiations that would lead to the referendum.
The foreign exchange markets are not always a reliable witness. They can be skittish, and their daily movements are sometimes impenetrable. But when rates move sharply and then settle for more than a month without second thoughts, their judgment shouldn’t be ignored. It is backed not by punditry but by many billions of dollars from in and outside the UK, so deserves more attention than it has been getting.
A lower trade-weighted currency has always been the UK's traditional escape route from a crisis, no change there. Surprise-free zone really, as our currency, like all others of the air-based variety, has always been overvalued. Once Fiat escaped Gold, rather like Volkswagen escaped emissions standards, the only measure of a currency has been what its government could get away with. As such, the freedom for Starlings to drop from the sky is as much a safety-net net-advantage as it is a handicap. It's also hard fitting a 'B' into PIGS.
The poor and the desperate, as well as the hard-working and naive, will continue to suffer in ignorance for as long as the elite can get freshly-minted earlier than most. But what else was Hadrian's Wall built from? I remain conflicted in extrēmīs. Affordable morality (like infrastructure, manufacturing bases and family capital) is so passé, especially in front of either an AK47 or the Welfare State.
Have a good bank-holiday weekend, for surely they will (end) someday - but we are currently unable to count (down).
(at least 15% grimmer wine tonight..)
Last edited by ratfink; August 26th, 2016 at 07:39 PM.
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Post-Brexit Britain to seek ‘unique’ model as great trading state
After leaving the EU, Britain will seek a “unique” model that will confirm its place as “one of the great trading nations in the world”, the government declared after ministers met to thrash out what Theresa May’s statement that “Brexit means Brexit” would mean.
The UK would seek “controls on the numbers of people who come to Britain from Europe” but also “a positive outcome for those who wish to trade goods and services”, Mrs May’s spokeswoman said after the cabinet had gathered for its first meeting after the summer break.
But tensions are already growing among ministers about the precise form Brexit will eventually take. The biggest divisions are over the balance between market access — through the EU customs union and the single market — and immigration, which is still at near-record levels.
Mrs May aims to invoke Article 50, the formal mechanism that triggers a negotiation period of up to two years, early in the new year and without a parliamentary vote. She has dismissed the prospect of holding a second referendum and intends to press ahead with Britain’s exit from the EU.
UK services sector rebounded strongly in August – Markit
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Britain’s dominant services sector recovered strongly in August after slumping to a seven-year low in the first full month following Britain’s vote to leave the EU, a closely-watched survey of activity suggests.
The services purchasing managers’ index (PMI) bounced back in August well above the crucial 50 mark that divides contraction and growth, recording a reading of 52.9. The index had slumped to an 88-month low of 47.4 in July, as investors and customers took a pause for breath to digest the result of the EU membership referendum.
Economists had expected the services PMI to recover to a reading of 50 for August. The month-on-month gain in the survey last month, at 5.5 points, was the largest observed over the 20-year history of the survey, according to IHS Markit which compiles the PMI.
Similar surveys for the construction and manufacturing industries also showed an improvement last month.