The British economy "Brexit dividend" is difficult to last

Posted by qianjiu on May 27th, 2019

Although all sectors are worried that the uncertainty brought about by "Brexit" will cause serious damage to the British economy, the data prove that the UK economy performed well in the first three months of this year.

According to figures released by the National Bureau of Statistics, the UK's GDP grew by 0.5% in the first quarter of this year, far exceeding the 0.2% in the fourth quarter of last year and 1.8% year-on-year, the highest growth rate since the third quarter of 2017.

In the "Brexit" puzzle, the growth rate of the UK economy has not fallen, but it is actually the dividend brought about by "Brexit" itself. Analysts believe that companies in the UK and continental Europe have increased their inventory reserves before the scheduled “Brexit” deadline of March 29, which has led to an increase in supply, and manufacturers have delivered orders before the “Brexit” date. Stimulated the UK's economic growth in the first quarter.

Specific to the manufacturing sector, the UK's manufacturing output rose 2.2% in the first quarter, the biggest contribution of manufacturing to the UK's economic growth in the past 20 years. Because of the fear that the UK and Europe could not reach the "Brexit Agreement", "hard Brexit" caused the two sides to increase tariffs and customs procedures became complicated, reducing logistics speed and increasing import costs. Many enterprises have increased their inventory, just in case. Some retail companies have also begun to stock up, including food, medicine, clothing, etc. In some parts of the UK, even storage warehouses are expected to be full, and it is difficult to have empty warehouses until Christmas.

The official "Brexit" date of the UK is still pending. There are already too many British people complaining that "Brexit" has been dragging on for too long and has consumed too much public resources. "Now, no matter how it ends, as long as it ends."

However, the "Brexit dividend" is obviously difficult to last. A number of institutions have predicted that the growth of the UK economy is unlikely to continue. It is expected that the UK economy will slow down to 0.2% in the second quarter.

Judging from the general trend of the UK's economic development after the "Brexit" referendum in 2016, the economic and trade relations between the UK and Europe in the "post-Brex" era have not yet been determined, and the "Brexit" uncertainty has led investors in British and foreign companies. The game is uncertain, which continues to drag down the UK economy. Since 2016, the UK's economic growth has slowed down, with annual growth rates dropping from more than 2% before the referendum to 1.4% last year.

Philip Hammond, the finance minister in charge of the British government's "money bag", has clearly seen that this unexpected "Brexit dividend" is difficult to continue to promote the UK's economic growth. He said that relative to economic data, he would rather see investors' increased confidence in the UK economy and hope to see an increase in investment data. But Hammond is also very clear, I am afraid that only the United Kingdom will pass a "de-European agreement", investors will move in time.

From the perspective of ordinary British people, the impact of “Brexit” is still limited. Although the media reported that individual families began to hoard their daily necessities because they were worried about the impact of “hard Brexit” on British imports, such cases are still cases. The price of the Camden area in the northwest of London, where I live, is stable, and few people are preparing to prepare for Brexit.

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