British growth is lagging behind Financial

But British businesses and consumers have no idea where they will be soon. And that puts pressure on the economy.

Turbulence in financial markets, capital flight, even recession: before the June 2016 referendum, it was assumed that the choice of a Brexit would result in an economic calamity for the British. 19659002] But last year, the British economy grew by 1.7% and unemployment dropped to 4%, its lowest level since 1974. Although it was not there still do not agree, there seems to be little inconvenience in the UK.

Less optimistic

However, one who only looks at the British results misses the picture. Compared to the rest of the euro area, the numbers are much less encouraging. For example, the eurozone rose by 2.5% in 2017. "For the Brexit referendum, the UK has been one of the fastest growing developed economies, but now the country is one of the fastest growing countries in the world. "Collapsed to become one of the weakest producers," says economist Alexandra Dumitru of Rabobank.

The UBS business bank calculated that Brexit, although not yet done, already cost 2.1% of economic growth. The Swiss bank cited a study by the University of Bonn. The researchers built data from different countries that were not affected by Brexit as a "duper" of the British economy. "This model shows that not only is GDP growth lower, investments are also 4% lower, inflation 1.5% and consumption 1.7% lower than without Brexit," writes UBS [19659003] Knauw

. According to Dumitru, uncertainty is mainly about the economy. around the British departure, which weighs heavily on confidence. "Not only among consumers, but especially among companies, morale is at the rendezvous."

"Investments have a major impact," says Bill Diviney, a macro economics economist at ABN Amro. "In the two years preceding the referendum, investments increased by 0.9% from one quarter to the next.After the referendum, this percentage dropped to 0.4%. investments throughout Europe were increasing. "

In the first half of this year, British investment even fell, Dumitru found. "The British economy is at the peak of the economic cycle, the unemployment rate is low, the labor market is tight and the economy is running at full speed." Normally, investment is increasing, so the but companies do not know where they are, so they do not dare to do it. "

The climate has deteriorated

Another effect is the sharp decline in the pound sterling after the referendum. It has lost 16% against the euro in three months and nearly 20% against the dollar. As a result, inflation has increased and the purchasing power has decreased.

The cheap pound was good news for British exports, although this effect was short-lived. Bill Diviney: "Last year, exporters took advantage of the weakness of the currency, but in the meantime, the global business climate has deteriorated and this advantage has also been lost."

cheaper currency also meant that fewer migrant workers had come to the UK. Many of them send a portion of their income home, but because of the decline in the pound, it has been less profitable. Dumitru: "Since the referendum, fewer and fewer European citizens are coming to the UK In 2018, the number of foreigners working in the UK decreased for the first time in many years"

if the Brexiteers will not regret it immediately. The migration of the workforce and the restriction of the free movement of people were only one reason why many Britons voted for Brexit.

In the meantime, time is starting to get longer, and an agreement has not been signed this year. Only then will all EU Member States and the UK Parliament have time to decide. And a transition period applies only for an agreement, in order to implement all the new rules. No agreement means that after March 29 a difficult Brexit is a fact. Dumitru: "And we are still expecting a recession."