The United Kingdom is currently facing a period of uncertainty unlike any seen since the end of the Second World War. Considering Great Britain’s entirely uncertain position in Europe and the rest of the world over the coming years, it’s almost impossible to predict what’s to come next. Nevertheless, the latest figures have painted a less than reassuring picture about the country’s economic performance.
According to the latest figures from the Office for National Statistics, the United Kingdom economy experienced growth in May after a decline in April. However, not to such an extent as to quash widespread fears of a severe slowdown to come. Specifically, the economy experienced growth of 0.3% in May, following a decline of 0.5% in April. Total growth over the three months leading up to May came out at the same 0.3%.
This would appear to be a positive result, but experts are predicting further shrinkage in the months to come. The official figures for the second quarter are not scheduled to be released until August, though they are not expected to make a particularly reassuring reading.
Carmakers return to work
One of the key factors driving the temporary economic growth record in April was the partial return to production for several major carmakers. A series of temporary factory shutdowns ahead of a scheduled March Brexit inflicted enormous damage on the UK’s vehicle production output and the economy as a whole.
This partial recovery in car production contributed to the 0.3% economic growth recorded for May, which didn’t come close to making up for the decline in the previous month. Experts insist that all such monthly figures should be taken with a pinch of salt due to their volatility and unpredictability. Nevertheless, all signs indicate a further economic slowdown over the coming months in the run-up to another scheduled EU departure.
“We project UK growth to dip to 1.1% in 2019 and to strengthen only moderately, to 1.6% in 2020. Slow growth this year reflects the drag on business investment from ongoing economic and political uncertainty relating to the outcome of the Brexit process. Our main scenario assumes an orderly exit from the EU with a transition period, with business investment and GDP growth picking up later in 2019 and in 2020. But short-term risks are weighted to the downside due to the possibility of a more disorderly Brexit.” Price Waterhouse Coopers
The value of the pound has also plummeted more than 5% against the world’s three biggest currencies in recent weeks. A decline that is also predicted to continue for some time.
Growing brexit uncertainty
Had the government gotten its way, the United Kingdom would have already been outside the European Union for some time right now. As it stands, we’re no closer to knowing what’s ahead than we were at the time of the referendum. Uncertainty has had a more drastic and wide-reaching impact on the UK’s economic performance than anyone could have predicted.
As it stands, the United Kingdom is now scheduled to leave the European Union on or before October 31. Nevertheless, we’ve got no realistic way of even knowing who will be in power at the time. Or whether Brexit will actually go ahead or not. From the biggest businesses to the average UK household, nobody is willing to make any major financial decisions while such uncertainty continues. The result of this is the sluggish economic performance we’ve seen as of late, which isn’t likely to see a turnaround anytime soon.