The UK has voted last June 23 to leave the EU, but it is still unclear how the Brexit has affected the country. Most economists have predicted that there will be an immediate impact on the UK economy, as well as consumer confidence right after the exit from the EU. However, these predictions have not come true a couple of months after leaving the EU.
Economy after Brexit
According to statistics, the UK economy grew by 0.5 percent in the first three months after the vote. The main contributor was the services sector of the country. However, the growth rate was slower compared to the 0.7 percent experience during the previous quarter. However, it was still better than the around 0.3 percent predicted by analysts.
However, not everything is bright when it comes to confidence in the small business sector. According to the survey made by the Federation of Small Businesses, small and medium sized businesses were pessimistic about their future. This was the first time it happened in the last four years.
But when it comes to consumer confidence, it has returned to pre-Brexit levels last September. It went up six points, which was the highest increase since June of 2015. As consumer spending continues to increase, sales also increase. They were up 6.2 percent in August compared to the same month last year. There are no indicators that consumer confidence will drop any time soon.
Effects on the Currency
The pound took a beating since the Brexit vote. It dropped to a three-year low against the euro right after the UK announced the start of the formal negotiations on the Brexit by the end of March. It has dropped around 19 per cent against the US dollar since the vote. In the last week of October, the pound is worth around $1.22.
The currency continues to show weakness, and the cut in interest rates doesn’t help the cause of the pound. While the fall of the currency has helped exporters, overseas holidays have become more expensive. Import costs for manufacturers have also increased.
A cheaper currency has boosted the tourism sector of the country. The weaker pound has made the UK a cheaper destination for visitors from overseas. Flights to the UK have increased by 7.1 percent since the Brexit. Some of the popular destinations in the UK include London, Liverpool, Scotland, Leeds, and Manchester.
These are some of the effects of the Brexit vote to the economy of the United Kingdom. As you can see, there are some good and bad results after the country voted to leave the European Union. While analysts have failed to get their predictions right, it looks like the UK is still on the right track after the Brexit referendum.