Brexit

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U.K. consumer confidence plunged the most in 21 years, the latest sign that Britons’ vote to leave the European Union is harming the nation’s outlook. Gfk’s core index slid to minus 9 in a special post-referendum survey conducted from June 30 to July 5, from minus 1 earlier in June. That’s the biggest slide since December 1994 when increases in tax, interest rates and job insecurity weighed on spending. While confidence among respondents who said they voted to remain in the EU dropped to minus 13, the decline was tempered by a lesser slide of minus 5 among those who said they opted to leave.

U.K. Consumer Sentiment Dives Most Since 1994 on Brexit Effect - Bloomberg

There was also cause for concern in the FTSE 250 index of medium-sized firms, which stood at 17333 before the vote and finished last week at 16198, down almost 10%. The FTSE 250 is almost quaintly British, with most making sales in sterling. For these companies the fall in the currency means they become less valuable whereas the generally larger, multinational firms in the FTSE 100, which earn most of their revenues abroad in dollars, climb in value.

Sterling’s down, sales are falling, shoppers anxious: gloom gathers over the UK economy | Business | The Guardian

UK business confidence has fallen sharply in the aftermath of the vote to leave the EU, research suggests. The share of businesses that reported feeling pessimistic about the UK economy doubled in the week after the Brexit vote. The figure jumped from 25% the week before the referendum to 49%, according to YouGov and the Centre for Economics and Business Research.

Business pessimism 'doubles after Brexit vote' - BBC News

Part of the problem with the Treasury analysis of the immediate impact of leaving the EU – which in effect forecast a shallow recession and drew heavy fire from the Leave campaign – was that it assumed no policy response. In fact, there now seems to be every possibility of a triple stimulus  – monetary and fiscal on top of the devaluation dividend already bestowed by markets. The Crabb plan to boost infrastructure spending, if adopted, would provide longer term fiscal support on top. Again, this is a relatively sound idea, which frankly should have been tried a long time ago.

We’re all Keynesians now, but a hard reality awaits our brave new world

We were told that the UK must vote to “take back control”, that quitting the EU would increase our diplomatic power in the world, that we could reduce immigration and boost the economy, that we would be able to maintain access to the single market and restrict the free movement of labour, and that – a real doozy this one – the only way to save the European Union was by breaking it up. These are all clever arguments – beautifully crafted paradoxes designed to mist up the windows. Subject any of them to a modicum of scrutiny, however, and they fast disappear up their own conclusions.

The paradoxes at the heart of the Brexit campaign make planning impossible