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The damage to the UK economy by Brexit has so far cost £ 66 billion, leaving the UK on the verge of recession, according to economic data released last week.
An badysis by Boris Glbad, an badyst at S & P Global Ratings, revealed that the decline in the pound sterling, the rise in inflation, the erosion of household purchasing power , falling real estate prices and weak exports led to a 3% reduction in GDP. "This translates into a loss of average economic activity of £ 6.6 billion (at 2016 prices) in each of the ten quarters since the referendum," Glbad said in a research note.
The graph shows the results of Glbad calculations. He took real data (yellow line) and compared them to a statistical economy of "doppelganger" (dashed line). Doppelganger consisted of a weighted basket of countries whose economies are comparable to those of the United Kingdom. For example, the United States represents 28.4% of the model, Hungary 24.1%, Canada 21.3%, etc. This mix has resulted in a GDP growth trend almost identical to that of Britain – until the end of 2016, when the Brexit effect came into effect.
At that time, after the EU referendum, UK GDP slowed as Doppelganger continued its growth trend.
The 66 billion pounds lost imply that the country is on average poorer at £ 1,000 per person than it would have been if the vote had never taken place.
The decline is also reflected in the actual data. A weighted average of data from the Purchasing Managers Index – which is closely related to GDP growth – implies that UK GDP was exactly zero in the first quarter, according to Samuel Tombs, an badyst at the Macroeconomics Hall of Fame.
"On the past, the weighted average PMI for the first quarter overall indicates that quarter-on-quarter GDP growth has fallen to zero, after 0.2% in the fourth quarter," he told his clients. "These surveys have tended to be too disappointing in previous periods of great economic uncertainty," he said, as they do not capture all the economic data.
In global PMI data, a rank of 50 means that growth is stable. Below that, there is a decline, over growth. At the present time, the UK is exactly on the line at 50, according to PMI data. Here is a comparative map of HSBC badysts James Pomeroy and Vardhan Bhatia.
"As one might expect, Brexit concerns have been cited as" the main cause ", which explains the general level of economic weakness, as companies delay spending," they told their customers. "The labor market has experienced only one respite because it is the only constant force sector of the British economy in recent months."
"PMI surveys disappointing indicate that the British economy is losing momentum in the first quarter and may sink into a recession that will worsen in the coming months," warned Chris Williamson of IHS Markit, the company that publishes the PMI data.
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