Summary
In
the aftermath of the shock win for leave in the UK's referendum on EU
membership, there has been considerable uncertainty over the short- and
long-term impacts on the UK economy.
This
report provides an overview of the impact Brexit has had on key economic
indicators such as GDP, interest rates, unemployment and the housing market,
and the subsequent impact on consumer confidence and retail growth and
projections.
Synopsis
“Economic
and Retail Update H2 2016”, an Economic Report by Verdict Retail, provides an
executive-level overview of the economic environment following Brexit, with
forecasts of key economic indicators and the various retail sectors.
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It provides
in-depth analysis of the following:
-
Market size and forecast; a look at the total market size and forecast size
both annual and quarterly for the key retail sectors.
-
Economic forecasts for the key economic indicators including GDP, interest
rates, unemployment, savings ration, consumer confidence and housing
transactions.
-
Summary of main influences; an overview on the factors driving the evolution of
the economy and retail sectors in the five years to 2021.
Key Findings
-
GDP growth knocked sideways in 2017, but momentum regains to 2021 In the short
term, uncertainty over the final outcome of negotiations will cause businesses
to postpone hiring and investment decisions, while consumers will delay
purchases of property and rein in discretionary spend particularly on big
ticket items, thus depressing GDP growth. In the longer term, reduced trade is
likely to negatively affect GDP as lower returns to capital lead to reduced
foreign direct investment (FDI), and stagnating wages lead to reduced
consumption.
-
Interest rates cut, but further cuts unlikely The widely expected interest rate
cut by the Bank of England in August 2016 is unlikely to stimulate a flurry of
retail spending. With the immediate impact of the interest rate cut being a
drop in the value of the pound, this move is hardly likely to boost flagging
consumer confidence, which is a major factor in driving spend.
-
Unemployment stable for now, but likely to inch up towards 2021 Unemployment is
forecast to slowly inch up towards 2021 as reduced foreign investment and low
organic GDP growth reduces opportunities for new job creation, while limiting
job progression in current roles with many having to remain in low paid/minimal
hours contracts.
